He urged industry to promote India-made goods and inform customers of the country of origin — whether they are from India or the country’s friendly or unfriendly neighbours, or other parts of the world — as they should be given a choice to be part of ‘Aatmanirbhar Bharat’.
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“Maybe as a consumer, I am happy to pay a rupee or two more but get a product that helps somebody have food or pay the bills for education,” he said.
Goyal, who is also the minister for consumer affairs, food and public distribution, said consumers should be given an opportunity to support the India story, jobs, and micro, small and medium enterprises.
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“It will be a humble contribution from the startup ecosystem towards a better and inclusive India,” he said.
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On the funding winter, or waning fund flow, in the startup sector, Goyal said: “I personally am not very concerned about the funding winter.” Occasional roadblocks in the shape of calibrated financing support will only help the startup ecosystem mature and come of age, he said.“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,” he said, adding that a little tight-fisted environment will always be good for those running a business. “You will manage money better and control expenses.”
Goyal said the government had initiated several schemes such as ‘Fund of Funds’, credit guarantees and mentorship programmes to generate opportunities for the startup sector. “So, in a small way, we’ve been trying to look at good opportunities, not missing the bus,” he said.
“There is enough money for good ideas,” he said and called upon Indian investors, including unicorns, to set up a homegrown fund to support the startup ecosystem.
“I have my age-old grouse against Indian investors and industry … ever since 2020, I’ve been appealing to Indian family offices, industry (and) businesspersons to consider setting up a homegrown fund which is financed primarily by Indian money … to support the startup ecosystem, particularly at the early stage,” the minister said.
On being asked if an exercise similar to the production-linked incentive schemes can be undertaken to create a funding industry of some kind, Goyal said it is not impossible and a partnership between industry and government could be looked at.
“Because it’s not government’s job to be able to assess a good idea or a bad idea — we will mess it up — I think it’s better we let industry do that job,” he said.
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Public money in startups
The government cannot direct public money custodians such as insurance companies or banks to look at greater investments in startups, the minister said, adding that the public mindset is not yet mature enough to accept greater risk even if it comes with the “promise of a greater reward”.
“Currently, for the government to be able to tell public money custodians to take this will be a little difficult,” Goyal said.
“We’ve already seen in the past, that any losses that occur due to the risks that financial institutions take, ultimately fall on the government. And more so because all the insurance companies, banks (and) highly regulated entities, in a way are using public money,” he said.
Laws, regulators
Startups who believe that sectoral laws are becoming a constraint for growth can give inputs to the government on the compliance difficulties that they face, the minister said. “We can come up with more laws on consumer protection that will help startups.”
Insisting that data protection law for the protection of users is not hurting anyone, 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 forced to subscribe to any service”.
“Similarly, data protection is all about ensuring that privacy of data is not affected. I don’t think beyond that data protection laws are hurting anybody… If at all, the only thing I have been advised is things like flexibility on employees’ stock options and stuff like that,” he said.
Multiplicity of regulators is a reality in all businesses, Goyal said, adding that a separate ecosystem where all startups will only have to adhere to one law would become very complicated.
“We could come out with a small list of do’s and don’ts on consumer protection,” he said.
Marketplaces, ecommerce
Foreign direct investment laws are very clear and there is a clear distinction between the marketplace model and the direct business-to-consumer model, Goyal said.
“Our laws have been absolutely crystal clear. Those who come in with foreign direct investment are not allowed to participate in the retail space. Those who come in with Indian money are allowed to participate in it as a retail business or like any other mall,” he said, hoping to convince companies to stop circumventing the rules.