Sony Joy, Founder and CEO, Chillr
While it is evident that the start-up space in India is getting the attention it needs, there are still many roadblocks that need to be tackled. The recent government claims that there will be a reduction in the stringency of regulatory checks for a start-up during its first three years are encouraging, however, it is still to be seen if these are followed through with.
One of the biggest hindrances that an entrepreneur faces is the complexity of the prerequisite procedures required to actually register and start a business as set down by the Ministry of Corporate Affairs. The actual structuring of the organisation is not only cumbersome but also made unnecessarily more complex by requiring the inputs of external consultants and lawyers. Hence, the entrepreneur spends more time and money organising these instead of running the business. The easing of business registration laws by the government can greatly make lives for entrepreneurs easy by reducing their dependency on such third party intermediaries. Along with this, company board laws should be simplified so that initial administrative decisions can be made easily and quickly, hence allowing the company to function smoothly.
Furthermore, it is important to note that the quality of a start-up’s function is affected by the consistency of that country’s telecom and data connectivity. Not only does bad connectivity make setting up the organisation harder by hindering communication and coordination, but also it more specifically impacts start-up using online platforms. Without good connectivity and network, you cannot assure consumers seamless services. This is extremely detrimental to specifically FinTech start-ups, as people need instantaneous updates on their financial transactions and data. Any time lags can create panic and deter users from re-transacting. Hence much needs to be done to provide stable and good mobile and Internet network.
Lastly, another way the government can help facilitate start-up growth is by providing income tax / VAT rebates to encourage digital transactions in retail payments. Countries like South Korea have provided such concessions in the past, resulting in much success. Even large utility companies
have offered discounts on bills for digital payments as it reduces their cash management cost. Government & PSUs should come forward with such initiatives to bring in a cashless economy which will go a long way in reducing corruption, avoiding black money, increase tax collection and boost efficiency in the economy by reducing cash handling costs.
All in all, a lot has to be done to create a healthy environment for start-up sustainability and while there is a long way to go, the understanding of what needs to be done, does make the task at hand more manageable.
Sony Joy is the founder and CEO of Chillr. The views and opinions expressed herein are those of the author and do not necessarily represent the views of Chillr.