Growth has to be people-centric
The action plan for start-ups by Prime Minister Narendra Modi comes at a time when India’s economic growth is seeing signs of stagnation. Any measure to generate employment, create wealth and improve the economy is welcome. But this launch looks like a hurried act to increase industrial production at any cost. The announcement of a slew of incentives to boost start-ups seems to have sprung from the need to give an impression that there is no ‘policy paralysis’. The decision to do away with labour inspections appears to overvalue wealth and undervalue labour. A corpus of Rs 10,000 crore is hardly sufficient to supplement the funding requirements of potential entrepreneurs. Obviously, very many people are so impoverished that they do not have a stake in what the government proposes to do to infuse new energy into the economy. Occasional high-sounding schemes do not enable the masses to cope with economic woes, especially rising food inflation. The sort of growth sought to be propelled appears lopsided; in fact, a vast majority of people may remain mere spectators of the ‘growth story’. For transforming their lives, a people-centric model of economy is needed.
A year of turbulence
The damage to various global economies has, to a large extent, been caused by the US, which, in order to pull up its economy out of recession, has done huge pump-priming. The US economy, no doubt, made some progress, but the developing economies have absorbed excessive debt without making any worthwhile gain as far as economic growth is concerned. As the US economy began to move up, the stopping of QE and the fear of rise in interest rates has been making the dollar strong, while there is some fall in currencies of other economies. This is making the repayment difficult and, at the same time, demand across the globe is drying up. The problem could have been averted in case China could have stopped its slide somewhat, because, in that case, the demand must have not been hit so severely and economies would not have taken the burden of debt so heavily. Even the US can’t hold the ground in this environment and recession is staring at us once again.
Providing unfettered support
Apropos of the news story “Rs 10,000-cr start-up fund to be force multiplier, say experts” (FE, January 18), it may look quizzical, but the 2G allocation was perhaps the closest to venture funding by the government. An unfettered approach to the task at hand—one can be sitting on judgement on this till the cows come home—saw polynomial burst in user base at one of lowest global tariffs. The mobile digital revolution, which followed the rapid creation of this huge consumer access, transformed in less than a decade the way we work, buy and pay, deliver services and pilot social transformation. Setting up an enabling support system for start-ups, as an adjunct, will leverage innovation only so long as the requisite open-minded bureaucratic verve is not subdued by the likes reading the fine-print or audit in hindsight. A routine and circumspect government application of mind to an otherwise well-intended policy would soon enough manage to douse the enthusiasm that must ignite any start-up, big or small. We then lose far more than we would ever hope to gain.
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