Modi Sarkar 2024: Startups Present 5 Challenges to PM’s 100-Day Agenda

Today, 4th June, marks a pivotal moment for India as the nation awaits the announcement of its new central government for the next five years. If the Exit Polls 2024 predictions come true, it promises to be a significant day for the Bharatiya Janata Party (BJP)-led NDA. Projections indicate that the NDA might clinch over 350 of the 543 seats, positioning Narendra Modi for a third term as Prime Minister and making the Modi 3.0 dream come true for the BJP!

Amidst swirling speculations about seat distributions, one thing stands clear: Narendra Modi is confident about his win and prepared with his post-poll agenda. Trusting the exit polls, he has already held a review meeting on the implementation of his 100-day agenda.

Modi's 100-Day Agenda for Startups

While the specifics of this agenda are yet to be unveiled, TICE, as a leading platform for the coverage of the Indian startup ecosystem, has connected with entrepreneurs and key stakeholders to identify their expectrations and five critical challenges that they believe should be addressed in Modi’s 100-day plan. 

Talking to TICE, Rikant Pitti, Co-founder of EaseMyTrip said that Hon’ble PM Narendra Modi wants to build India as a global manufacturing hub. 

"Impetus will be given to boosting local manufacturing through initiatives like Make in India and Atmanirbhar Bharat. Ease of doing business will also be focused upon to attract foreign investment and create favourable circumstances for the startup market to grow. While the government ensures to focus on all possible sectors, we anticipate a strong focus on green hydrogen, solar technologies, microgrids, and EVs. Additionally, the tourism and infrastructure sectors will also observe significant developments. We also expect concrete steps to be taken to boost domestic trade and attract global investments with the overall vision of the country’s economic growth," Pitti predicted.

Let's explore the key areas that need immediate attention from the Modi Sarkar 3.0 to foster a thriving entrepreneurial environment in India.

Top Challenges for Startups: Industry Expectations from Modi Government 

As the results of the 2024 Lok Sabha elections are awaited with bated breath, the startup community in India is hopeful and expectant. 

1. Policy Reforms, especially for smooth startup funding

While the government's push for innovation is commendable, navigating the complex web of regulations remains a significant challenge for startups. Startups like EaseMyTrip and Bobble AI expects policy reforms, especially for smoother funding and ESOP distribution.

"India has the third-largest start-up ecosystem globally. The market is thriving with the young spirit of aspiring entrepreneurs and innovative ideas. However, startup funding declined exponentially last year. The startup industry and entrepreneurs have various expectations from the upcoming government. There is hope for a policy framework with concrete measures in place to empower startups and provide avenues for investment in cutting-edge technologies and job creation. We also need initiatives that drive the growth of the startup ecosystem and ensure its financial inclusion," said Rikant Pitti, Co-founder, EaseMyTrip.

Ankit Prasad from Bobble AI highlighted the challenges faced by startups in ESOP taxation and the dominance of Big Tech giants.

"ESOPs are crucial incentives for retaining talent, but heavy taxation upon exercise discourages their utilization. The government should consider taxing ESOPs only upon actual monetary gain, ensuring greater employee participation and retention. Furthermore, the dominance of Big Tech giants poses challenges for emerging startups. While their presence contributes to the economy, their anti-competitive practices stifle competition. The government must regulate these sectors to foster a level playing field for startups, enabling them to compete effectively."

On the other hand, Naman Gupta, CEO, Code Effort emphasized the need for policy flexibility, particularly in sectors like recycling and waste management.

"The first action the government can take is to make policies more flexible and accessible. While the Startup India portal has improved registration processes, other sectors like recycling and waste management lack similar support. India needs policies that promote sustainable alternatives, as seen in Europe and the US. Additionally, incentives should be provided to encourage recycling practices, and reforms to platforms like the Government e-Marketplace (GeM) should be considered to support recycled products. With streamlined policies, startups can focus on innovation and contribute to sustainable development, driving India's economic growth."

With targeted policy reforms addressing these concerns, startups can navigate regulatory challenges more effectively, focusing on innovation and sustainable growth, ultimately driving India's economic progress.

2. Corporate Governance

Effective corporate governance is the cornerstone of a healthy startup ecosystem. It fosters transparency, accountability, and ethical practices that build trust with investors and customers. 

Rikant Pitti of EaseMyTrip highlights that "the concept of corporate governance was restricted to listed companies but is now gaining traction in the start-up industry as well. Failing to adhere to corporate governance by well-funded start-ups has led to investors being hesitant. Hence, stringent governance frameworks beyond legal, financial, and tech should be set up."

Even the investors are establishing strong overview guidelines, including making quarterly reporting of financial performance mandatory, periodic audit testing, etc., to avoid untoward situations. Corporate or  Startup Governance is a pivotal step in ensuring that there aren’t any misses or gaps. Start-ups should certainly adhere to a self-regulating ecosystem with a governance framework as this will help in building a transparent, ethical, and trustworthy scenario for the stakeholders, added Pitti.

3. Regulatory Hurdles

While we won't delve into specific examples here to avoid mentioning any regulatory body, navigating the complex web of regulations in India can be a major roadblock for startups. Long approval processes, cumbersome licensing procedures, and frequent policy changes create uncertainty and hinder growth. Streamlining regulations and creating a single-window clearance system could significantly improve the ease of doing business for startups.

4. Digital Competition Bill

A new challenge for startups is the proposed Digital Competition Bill. While aiming to curb dominance by large tech companies, the bill's broad language creates uncertainty and potential compliance burdens for startups. This could stifle innovation, especially for potential market disruptors. Striking a balance between a level playing field and fostering startup growth is crucial.

Ankit from Bobble AI highlighted the challenges faced by startups in digital markets due to the dominance of Big Tech giants.

"The dominance of Big Tech giants poses challenges for emerging startups in digital markets. While their presence contributes to the economy, their anti-competitive practices stifle competition. The government must regulate these sectors to foster a level playing field for startups, enabling them to compete effectively."

Clear communication and specific guidelines from the government can ease concerns. Additionally, support mechanisms like legal advice and simplified compliance procedures can help startups navigate the bill's complexities. The Digital Competition Bill can create a fairer digital ecosystem, but ensuring it doesn't hinder innovation requires careful consideration.

5. Market Access and Global Integration

For Indian startups to grow and compete globally, they need seamless access to both domestic and international markets. The government should facilitate easier market entry by negotiating favorable trade agreements and reducing export-import barriers. Additionally, promoting Indian startups at global forums and creating platforms for international collaborations can help startups scale and establish a global footprint.

What Startups Want from Modi 3.0?

As India looks ahead to Modi 3.0, the startup community anticipates a government that not only acknowledges their contributions but also actively nurtures their growth and innovation. Across various sectors, startup founders voice their expectations, forming a comprehensive narrative of what startups truly want from the new government.

The groundwork begins with Ayush Gupta, CEO & Co-Founder of SwopStore, who envisions a proactive government stance, facilitating easier access to funding with potential interest rate reductions of up to 4%. Gupta's vision aligns with Abhishek Vyas, Founder & CEO of MyHaulStore, who underscores the importance of initiatives towards better tax structures and simplified access to capital.

Gupta said, "We anticipate the government's proactive stance in boosting India's startup ecosystem, facilitating easier access to funding with potential interest rate reductions of up to 4%. Incentivizing technological advancement and innovation processes will be key. Prioritizing digital infrastructure and skill development is essential, alongside a firm commitment to sustainability, global collaboration, and digital transformation initiatives for a thriving startup landscape."

But the aspirations of startups extend beyond financial support. Dr. Pallavi Singh, Foot and Ankle Specialist and Founder of Stride Podiatry, emphasizes the need for a conducive regulatory environment.

Singh's call for streamlined regulations and compliance processes resonates with Nirav Choksi, CEO & Co-Founder of CredAble, who stresses the importance of simplifying regulations and compliance procedures for startups.

Choksi said, “India has made impressive strides to become a prominent geopolitical and economic force to reckon with. As India fortifies its global position, we hope the newly-elected government will ensure a favourable regulatory environment by simplifying regulations and compliance procedures for startups, making it easier for entrepreneurs to start and run a business in new sectors."

However, startups seek more than just regulatory ease. Prasad Sreeram, CEO & Co-Founder of COGOS, highlights the need for targeted support for the logistics sector, including infrastructure enhancement and access to affordable financing.

He also highlighted the need to focus on enhancing infrastructure, such as building more efficient transportation networks and modernizing ports. Simplifying compliance requirements and reducing bureaucratic red tape will streamline operations for logistics companies.

Meanwhile, Vingish K Vijyan, Co-founder of 90+ My Tuition App, underscores the importance of improving access to funding and enhancing digital infrastructure.

"I believe the Indian startup ecosystem thrives on innovation, but to sustain this growth, we need robust support from the government. Key steps include improving access to funding through grants, low-interest loans, and venture capital incentives, as well as simplifying regulatory processes to reduce bureaucratic hurdles," concluded Vijyan.

Amidst these diverse voices, a common theme emerges: startups crave a supportive ecosystem that fosters innovation and growth. They envision dedicated startup hubs, fostering a culture of innovation, bridging the skill gap, and sector-specific support.

As Modi 3.0 unfolds, the government has a unique opportunity to shape India's startup landscape. By listening to the voices of startup founders and addressing their needs, Modi 3.0 can usher in an era of unprecedented growth and innovation, propelling India to the forefront of the global startup ecosystem.

As India stands on the cusp of a new era of innovation and entrepreneurship following the 2024 Lok Sabha elections, the proactive approach of the Modi government towards addressing these key issues can transform the startup landscape. By focusing on corporate governance, access to capital, infrastructure and technology, skill development, and market access, the government can create a thriving environment where startups are not only born but also nurtured to become global leaders. With the right policies in place, Modi Sarkar 3.0 can make India's startup ecosystem a powerhouse of innovation and economic growth, fulfilling the aspirations of countless entrepreneurs and driving the nation towards unprecedented success.