In a country battling unemployment, every such news seems to give us relief, which gives assurance of job creation and economy picking up.
Sanjay Verma
In the last one year, more than 35 billion dollars have been infused in new businesses from government and domestic and foreign investors. However, all these figures also reflect the fact that most of the new companies are starting out in the big cities of the country because the infrastructure there suits them.
In a country battling unemployment, every such news seems to give us relief, which gives assurance of job creation and economy picking up. Recently, when Union Minister of State for Home Nityanand Rai was telling the Parliament that in the year 2020, a total of three thousand five hundred and forty eight unemployed people committed suicide in the country, then the question was being raised that after all this story of unemployment has become a riddle, will we get rid of it? No.
The answer to these questions certainly lies in creating jobs as well as inculcating the feeling in the country that it is better to become a job creator than to ask for a job. Although this road is not easy. For this, there is a need to create enthusiasm among the youth to take the risk of starting their own business. The road is definitely rough, but not impossible. A glimpse of this was found recently when it was told in the Economic Survey that till the beginning of this year, more than sixty one thousand four hundred new companies had been recognized in the country.
This series started from the year 2016, when the ‘Startup India’ campaign was given the green signal in India. The objective of this scheme was to promote innovative industries and entrepreneurship in the country. Although in the meantime the situation arising out of the Corona epidemic had a very adverse effect on the economic environment of the country, but due to the Internet, the functioning of new companies in the country did not suffer much.
The result of this is that in the year 2016-17, where the government had approved only seven hundred and seventy three innovative companies, in the year 2021, fourteen thousand new industries were approved. It is also a remarkable fact that the number of such new companies is also increasing rapidly in the country, whose market valuation is equal to or more than one billion dollars (about Rs 7470 crore).
Such companies are called unicorns. In the year 2021, the number of such unicorns was forty-four, which has now increased to eighty-three. It is also being said that this trend is not going to stop yet. PwC India has done an assessment in this regard. According to this, in the year 2022, about fifty innovative companies in the country can achieve the category of unicorns. Thus, by the end of the year, the total number of innovative businesses with valuations of over $1 billion could exceed one hundred.
It is natural to be excited by such news. One effect of this is that apart from the government, many big industrialists have started investing heavily in these companies. For example, Reliance invested more than seven thousand crore rupees in such companies in the year 2021. Groups like Tata and Vedanta are also in this line. The government itself is also investing money in many innovative companies.
It is estimated that such an investment from the government has been done close to one thousand crores. In this way, in the last one year, more than thirty five billion dollars have been infused in new businesses from government and domestic and foreign investors. However, all these figures also reflect the fact that most of the new companies are starting out in the big cities of the country because the infrastructure there suits them.
But it has been told in the Economic Survey that now the campaign of innovative businesses is moving from metros to smaller cities. In the last few years, some new company was started in five hundred and fifty five districts of the country. Roughly seventy-five percent of the districts of the country have reached the innovative industry scheme. On the basis of this, it is claimed about India that it has now become the youngest ‘startup country’ in the world, where about seventy-five percent of the new companies’ operators are younger than thirty-five years of age.
However, this road to new industries has not been easy. A major setback to the start of this scheme has been taken by the Corona epidemic. In the year 2020, FICCI and Indian Angel Network (IAN) assessed the data found in their nationwide survey ‘Impact of COVID-19 on Indian Startups’, it was found that about seventy percent of the innovative businesses in the country are in poor condition, while thirty three percent The companies had put a hold on their decision to make fresh investments. Apart from this, 10 percent of the innovative companies had said that the investors from which they were getting capital had stopped.
It was also clear from the survey that only twenty-two percent of the companies were such that they had cash left to meet their expenses for the next six months. However, forty-three percent of innovative businesses had started taking pay cuts to survive. Similarly, thirty percent of the new companies said that if the conditions like complete closure continue, then they will be left with no other option but to lay off the employees.
Although the government cannot run any business like a businessman, but it can definitely do that to create a healthy environment for new businesses. What the government has done so far, now there is a need to take two steps forward. Our government has to take lessons in this regard from some examples, such as those from France. France has made arrangements to save new companies from capital problems by arranging four billion euros.
On the other hand, Germany has prepared a program of special help for new industries, while Britain has announced funds and many helpful measures for companies facing economic problems. Similarly, Australia has created a huge fund of 500 million dollars, out of which ten thousand dollars can be given immediately in the form of loans and assistance to the industries in trouble.
New Zealand is touted for being the sixth year in a row that it is the easiest country to start and run a business in, according to the World Bank rankings. The gist of these examples is that India should also create such an environment for the promotion of its companies so that they can get investment from abroad easily and no capital or policy problems come in the way of their operations.
It is to be noted that India is currently ranked sixty-three in the World Bank’s ‘Ease of Doing Business’ ranking. It needs improvement immediately. For this, removing regulatory hurdles especially in the operation of new companies should be a priority. Simultaneously, efforts should be made to overcome the hurdles in the way of patents. It is worth mentioning here that in the year 2020-21, fifty-eight thousand five hundred and two patents were applied for in India, out of which only twenty-eight thousand three hundred and ninety nine were approved. While in neighboring China, seven lakh patents were granted in the same period. This difference clears the conditions for the growth of startup companies.