Union Budget 2017: A push and a shove for Start-ups, Technology and Innovation could have done wonders

Overall I would give a thumbs up for the budget, however, due consideration towards the few ‘missing’ links could have made me happier.

Overall I would give a thumbs up for the budget, however, due consideration towards the few ‘missing’ links could have made me happier.

One page tax form, bringing down personal income tax by 5 per cent for a section of salaried class, trimming the corporate tax slab to 25 per cent for Micro, Small and Medium Enterprises (MSMEs) has caught the imagination of a segment of the population in the Union Budget 2017-18 but for the startup and Tech Innovation world it has next to nothing.

Science & Technology, Innovation and Startups are the one who build the ‘future’ of the society. The investment in the mighty three is high and yield slow results, but once the results starts coming the impact is huge. Take an example of investment in space technology program few decades back, now India is among leaders in the world.

If there was a time ever for the startups to be given a push it is now, for one has witnessed a drop in startups, money drying up in venture capital and a few going back to taking up jobs. A clear policy on issues besieging the startup world would have given a spring it its feet as the verve that one witnessed in the startup sphere a few years ago has weaned a bit.

Clarity on three fronts namely; innovation, Science & Technology and startups is lacking in the budget. The trio can create a platform and leapfrog in the future. There is nothing much for the entrepreneurial eco-system in the budget.

What was expected in the budget was a fillip to the start-ups by way of clarity in rules and most importantly how to handle losses. Few start-ups are making profit and the tax holiday is valid to only those start-ups who are recognised by Department of Industrial Policy & Promotion (DIPP).

That there is a world of talent out there waiting in the wings to fly with ideas is a foregone conclusion. Youngsters in their teens to 25-somethings are raring to go. If only the budget had something on the Angel tax, it could have done a world of good for the start-ups.

The innovation and startup ecosystem needs a push, handholding and direction. The small businesses will become competitive in the global market ie the MSME sector. Similarly, if there was a rethinking on issues plaguing the startup community such as taxes on early stage investment, ease of doing business and a more comprehensive long term plan for the community to grow, the 2017 budget would have boosted the morale.

The entrepreneurial ecosystem badly needs a push and that should precede with a robust long-term policy on innovation, Science & Technology and Startups. It is never too late; a meeting with all the stake holders on envisaging a plan is all that is needed. Anyone ready? I am.

(The article has been written by Nikhil Agarwal, Chief Executive Officer, AP Innovation Society, Government of Andhra Pradesh. All the views expressed are personal)

NRI- a metaphor for change

What can an NRI do? A lot for the Indian growth story

If there was a time ever a time for the Indian diaspora to play a major role it is now. Indians who were taken as indentured labour to sugar plantations in Mauritius, West Indies, Kenya, Mozambique, Zambia, Zanzibar, Fiji and beyond  from 1833 onwards were essentially a part of the system that transported Indians to different colonies of European powers. Cut to 2017: Global Indians form a formidable 30 million spread across 200 nations and have tremendous political and economic clout.

The forlorn Indian worker in some remote sugar plantation is replaced by a highly skilled worker who is most sought after by fortune 5000 companies, universities, research institutes and countries who badly need expertise.

The Indian diaspora is shining brightly but is India leveraging their expertise and acumen? Not enough. A lot has been written on the $69 billion remittances received in 2015 and not to forget the large chunk of the Kerala economy depends on foreign remittances.

Remittances apart, a strategy to make Global Indians invest in India, collaborate with scientific institutions and see a potential in the India growth story is what is needed.

“World’s keenness to engage with India has risen. Our diaspora can play a vital role in furthering India’s engagement with the world”

– PM Narendra Modi

A mere one per cent of Non-Resident Indians contribute to 3.4 per cent of India’s GDP without even living in India. If even a part of the one per cent invests in India, they would do a world of good. Most NRIs have an ineffable emotion with India and most want to do something. Some do not know where to start and how to go about, while others fear going through mundane Indian government offices and few more need a push.

What is needed is a strategy to woo these emotionally bonded NRIs to come back and invest. Invest in not just run-of-the-mill businesses but in state-of-the-art technological services, IT, hardcore research, medical research and space sciences.

Another segment of investors who have made money but are not in the fields of science and technology could be made to invest in healthcare, tourism, clothing and hospitality. There are at least close to a few lakhs of Indians who visit India regularly. Even a simple survey of what India needs in terms of development in hospitality sector can throw multiple business ideas.

Some 150 plus years ago, impoverished Indians were huddled in ships and sent to work as slaves, their progeny today are calling the shots in Fiji, Caribbean Islands, Malaysia, Mauritius and other countries. Many have outgrown the yoke of the colonisers. The ineffable emotion of the Indian diaspora just needs to be kindled for a fillip to Indian growth story.

Why India needs to look beyond frugal innovation

While frugal innovation has put India on the world map, the flip side India as a nation has come to be known more for its spartan innovations notwithstanding the Indian space programme. There is nothing wrong in being frugal especially for a country as large as India with its myriad problems but if she has to be known as a leader in the comity of nations, it is time to look beyond.

The recent Global Innovation Index 2016 (GII) report puts India at 66th position and placed China among the top 25 countries. The need of the hour is to invest in innovation and look at it not just as another obligation among the many schemes but as a long-term economic growth plan. India’s spending on science is not relative to its GDP. It spends slightly less than 0.9 per cent of its GDP on R&D. Francis Curry, director general, World Intellectual Property Organization (WIPO) says, “Investing in innovation is critical to raising long-term economic growth.” The sooner India realizes this the better it would be.

Innovation requires continuous investment. GII data indicates that global R&D grew by only 4 % in 2014. Experts often ask why India is not coming up with path breaking research and the answer to a great extent lies in the budget allocation for R&D and to a lesser extent the education system which is predominantly rote learning.

The image of India as nation that excels in jugaad (of overcoming constraints and finding solutions, of course by using minimum resources) has to be broken. Every now and then one hears of ordinary people coming out with extraordinary solutions such as a dhaba owner using a washing machine to churn out lassi, connecting a diesel engine to a cart and a barber using a vaccum cleaner to suck up fallen strands of hair after a haircut.

India is a growing economic power and apart from frugal innovation, solid path breaking innovation backed by state-of-the-art technology is what would propel it.

This piece is not against frugal innovation, frugal innovations have an overpowering and explicit social mission and they will keep happening as long as we have inventive, enthusiastic individuals. Being thrifty is in our DNA and people would anyway come up with innovations that make a difference.

Undermining frugal innovation is not the purpose and one cannot forget the efforts of Dr Devi Shetty in delivering affordable heart surgery, the Jaipur foot that has given a new lease of life for millions since the 60s, Aravind Eye Care system that performs over 3 lakh operations at almost zero cost and India’s space programme are testimony to frugal innovation but the time has come for India to take the leap forward and invest heavily in R&D.

The Indian business model is largely based on reengineered imitation. This has to change. By no means are we equating frugal innovation with the creation of cheap, low-tech products but what we advocate is the need to take the next leap forward and ride on the new wave of innovation. That can happen only when we increase our spend on R&D multiple times.