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The secret of the sealed letter by a former IPS officer #BusinessTitBits

Akhilesh Bhargava

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In a recent case before the Bombay High Court, concerning a writ petition filed by NDTV, in the matter of alleged FEMA violations by it, the advocate for the Enforcement Directorate, handed over to the judges, a sealed envelope containing the evidence on the basis of which ED has initiated proceedings against NDTV. The counsel for the ED, requested the Court to not permit the same to be perused by the complainant ie. NDTV. The Hon’ble Court in its wisdom has discussed the contents of the said sealed envelope in its order passed on 26th June, 2018. What kind of classified evidence did this sealed envelope contain? Mr. Akhilesh Bharagav, Business Editor of HW Business and Finance shares his insights on the matter?

Business Tit-Bits

Why do start-ups need a better EODB?

Akhilesh Bhargava

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With a huge base of highly educated youth, willing to take an entrepreneurial risk, or rather at times compelled to take suchrisk for want of suitable jobs, together with a giant domestic market opportunity waiting to be exploited, India should ideally be brimming with prosperous start up enterprises. With a support base of a formidable legal/banking/financial framework at least on paper, together with our dynamic homegrown talent, which is capable of interfacing with world markets. The question is why do startups need a better EODB? Mr. Akhilesh Bhargava, Business Editor of HW Business and Finance shares his insights on the matter.

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Business Tit-Bits

Start-Ups Need a Better Ease Of Doing Business

Akhilesh Bhargava

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start-ups

The fact is that we may have systems and laws in place, but the ecosystem needed to support start-ups is missing.

 

With a huge base of highly educated youth, willing to take an entrepreneurial risk, or rather at times compelled to take such risk for want of suitable jobs, together with a giant domestic market opportunity waiting to be exploited, India should ideally be brimming with prosperous start-up enterprises. With a support base of a formidable legal/banking/financial framework at least on paper, together with our dynamic homegrown talent, which is capable of interfacing with world markets. Indian startups should ideally capture global markets, but unfortunately, they do not.

 

India has the third largest base of start-up enterprises in the world. We have 14000 registered startups, not just in the popular IT sector, but also in other sectors such as healthcare, education, clean energy, agricultural technology, and even crime prevention, among others. These startups have provided over 140000 jobs so far and their numbers continue to grow. They, however, suffer from a lack of a suitable ecosystem and lack of capital, which hinders their growth and the ability to expand.

 

The Indian government recognizes the potential of our domestic start-ups, for our economic growth and for harnessing India’s deep and vibrant talent base, which for lack of opportunities at home, is often forced to emigrate overseas. The government has been showcasing the Indian market, its investor-friendly laws and improved ease+ of doing business, as it seeks to attract global capital into Indian startups. It is said to have approached over a 100 VC funds in USA, Japan, Singapore, China etc. and has also recently held a startup summit at Goa, to attract these deep-pocketed investors. But the response of foreign funds has been lukewarm, so far, despite the fact that international investors are attracted by the huge Indian market and they do agree unanimously that India is the place to be in.

 

The fact is that despite such raw dynamism and huge talent base, coupled with our giant domestic markets, investors have been a very cautious lot. That has to do with a host of factors which deter investors and that includes red-tapism, corruption, draconian tax laws, indifferent bureaucracy, and increasing cost of compliance, due to over-regulation. Hundreds of start-ups, who attract share capital from investors, at a premium, face huge tax demands, simply because the tax department considers the share premium to be bogus. These perverse tax demands not only hit the cash flow of start-ups but also kill their dynamism, by distracting the attention of the entrepreneurs. So is the case with many notices received under corporate laws and labor laws, many of which entail levy of huge penalty and prosecution. The fact is that we may have systems and laws in place, but the ecosystem needed to support start-ups is missing.

 

Till we do not set up an ecosystem, wherein the primary role of facilitator has to be of the government, and that does not act as an obstacle but encourages start-ups, our Indian startups will struggle and these dynamic entrepreneurs will prefer to migrate abroad. No wonder, last year, the American Consul General remarked at a seminar in Kolkata, that Indian startups prefer California to Bengaluru. That explains what lacks in our ecosystem for the startups.

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Business Tit-Bits

The insider of the Monetary Policy Committee meeting of the RBI

Akhilesh Bhargava

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The recent meeting of the Monetary Policy Committee of the Reserve Bank, took place with a much better macro economic environment. Crude oil prices have fallen sharply, the rupee has started gaining strength, capital inflows are increasing, there is a pick up in investment activity led by the government, there is an increase in capacity utilisation, a rise in exports, an improvement in credit off take, inflation remains subdued and with a retreat in commodity prices, corporate profits should look upwards. What happened in the meeting? Mr. Akhilesh Bhargava, Business Editor of HW Business and Finance shares his insights on the matter.

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