"Start-up India, Stand-up India"

The launch of the "Start-up India, Stand-up India" programme unveiled by Prime Minister Narendra Modi on Jan 17, 2016 shows the seriousness the government attaches to improving the ease of doing business in our country. The proposed incentives to promote and nurse entrepreneurship in India included:
  1. Start-up profits to be tax-free for 3 years
  2. Compliance regime based on self-certification. No labour inspections for 3 years.
  3. Mobile app from April 1 to register start-ups in a day
  4. Fast-track mechanism for start-up patent applications, with 80% cost rebate
  5. Exits for start-up within 90 days
  6. Fund of funds with Rs 2,500 crore a year for four years
  7. Tax exemption to be provided on capital gains
  8. Sector specific incubators, 500 tinkering labs, pre-incubation and seed funds under Atal Innovation mission
  9. PPP model for 35 new incubators; 31 innovation centres at national institutes, 7 new research parks, 5 new bio-clusters
In the recent months, I also came across  "Investment Summits" organized by various states, to attract business entrepreneurs to their respective states.

Growth Strategies adopted since Independence. 

It's time to think back how Indian economy meandered through various odds towards growth since our Independence. Three major strategies that were adopted since our 1956. 

A. The Nehru Mahalanobis model of Growth emphasized rapid development of heavy industry so as to create an industrial base so that India becomes self-reliant in the capital goods sector. The reason for adopting this strategy was predominantly due to:

  1. British Rule deliberately denied the development of heavy industry in India prior to Independence. 
  2. Rapid industrialization was essential for the development of agriculture as well as other sectors
Public sector was given the responsibility to develop it since private sector was not willing to invest in heavy industry which required lumpy investment, had a long gestation period and low profitability

While this model of implementation resulted in development of capital goods sector via heavy industry, small scale industries suffered relative neglect in this model.

B. Gandhian Model of Growth emphasized the rapid development of agriculture and small scale industries. Village and small industries were emphasized from the point of view of production as well as employment. Employment oriented planning was emphasized over production oriented planning. However, it kept public sector responsible for developing heavy and basic industries.

Gandhian model of income intended to tackle the problem of distribution of income at the production end and not at the end level of consumption by fiscal measures. It did emphasize employment as the principle means of providing national minimum and removal of poverty.

This model could not provide intended benefits due to short stint of Janata Government (Janata party fell after approximately 18 months of functioning)

C. Rao-Manmohan Model of Growth was introduced in 1991. It emphasized privatization and globalization of the economy. it succeeded in opening hitherto reserved areas to the private sector. It abolished licensing in all industries except a small list of 18 industries. It freed MRTP (Monopoly and Restrictive Trade Practices) companies from the ceiling limit. Foreign Direct Investment was facilitated. Automatic approvals upto 51% of the equity was given. Proposals requiring more than 51% equity could be considered on a case-by-case basis. It reduced import barriers to a greater extent. Public sector companies were given autonomy to improve their growth and productivity.

Start-ups: India's current Growth Model?

In my opinion, this initiative wave is touching the shore of Indian knowledge work force at the right time. It was exactly 25 years before Rao-Manmohan model liberated Indian economy and let Indian knowledge workers parter with foreign investors. In this process, our work force gained various knowledge insights into entrepreneurship. 

We, the knowledge work force, need to comprehend this wave with touch of emotive logic. By

In my opinion, the working class needs to comprehend both emotion and logic of present context. As Prime Minister rightly said "

Seeing is believing
Ideas.. Some people gets involved with ideas.. does not get leave
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