At an impressive event attended by founders, venture capitalists and policymakers, the two Union ministers assured that the Centre would catalyse the Indian innovation ecosystem and not create roadblocks with multiple regulations, as envisaged by Prime Minister Narendra Modi.
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“If anyone in the startup world feels laws are becoming detrimental, they can give their input on the difficulties they’re facing regarding complying with the law,” Goyal said. “We’re not interfering in anyone’s business… for instance, with consumer affairs, all we want to ensure is that the consumer is protected, and not coerced into something detrimental to them.”
In response to queries on the slew of legislations covering the digital economy, Chandrasekhar clarified that “there will not be a case where there will be a Digital Competition Act, then the fear of Digital India Act, and then a Telecom Bill…I can tell you with absolute clarity and authority that all the initiatives will finally get harmonised.”
Terming the talk of the so-called funding winter as more in the mind than in reality, Goyal said good ideas would always draw in investors. His statement assumes significance amid entrepreneurs’ concerns regarding the waning fund flow in the startup sector.
The commerce minister said occasional roadblocks would only help the startup ecosystem mature and come of age.
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“We will see a churn in the industry, but cash flows and profits are finally becoming relevant … My business experience says that whenever you have too much cash, you tend to make mistakes,” said Goyal, adding that an element of tight-fistedness would always help those running a business. “Occasional roadblocks will only help our startup ecosystem mature,” he pointed out. Also read | ET Startup Awards 2023 | Legislation will be tuned to accelerate growth of startups: MoS IT Rajeev Chandrasekhar
In terms of support, the minister suggested startups finding it difficult to raise funds opt for the Investor Connect initiative of the government.
“You will manage money better and control expenses,” he noted. Goyal highlighted several schemes such as the ‘fund of funds,’ credit guarantees and mentorship programmes that have been rolled out to generate opportunities for the sector.
In turn, he urged Indian businesses consider setting up a homegrown fund, financed by Indian investors. The minister also called on unicorns — startups valued at over a billion dollars — to invest in this fund and support upcoming startups.
Responding to a query on the lack of a robust domestic venture capital industry, Goyal said a partnership between the industry and government might be a good idea.
Also read | ET Startup Awards 2023 | Funding winter more in the mind than in reality, says Piyush Goyal
Goyal was firm that foreign investors in Indian ecommerce should abide by foreign direct investment (FDI) laws, which are very clear on the distinction between the marketplace and direct-to-consumer models. “I wish everyone
follows the law of the land under which investments have come in,” he said. “Our laws are crystal clear. Foreign investors were not allowed to participate in retail space.” The industry minister also asked startups to promote India-made goods, which would support local manufacturing and employment.
Future of tech
Chandrasekhar said India’s capability has been firmly established, against the narrative of being a back office, adding that the future of technology is being shaped by Indian minds as much as the Americans or Japanese.
“There was scepticism, scorn, aberration about startups in the government system, among others, but over the past five to six years, global investor confidence in this generation of entrepreneurs is unprecedented,” he said.
The MoS said efforts were ongoing to bring all ministries on the same page on the issue of GST on online gaming. He said some ministries were gun-shy due to bad actors in the past.
According to him, in the absence of a framework to govern online gaming, there are both good and bad actors. The finance ministry’s approach had been more curative in nature, and the rate of taxation was meant more to discourage online gaming because of some bad actors. There was now a very clear predictable framework, and it would be a sunrise for the sector, said Chandrasekhar.
Prime Minister Narendra Modi, the MoS said, has told his ministers to ensure the legislation process and regulations help accelerate the innovation ecosystem.