With coming of Narendra Modi’s government  into power, business owners and young entrepreneurs had lots of expectations  specially regarding providing a comfort zone for them to grow faster in India. Also, taking actionable steps to discourage Indian start ups from flying outside India.   

An increasing number of young ventures will continue to shift overseas in search of investors and a better regulatory environment and facilities unless the government takes steps to reverse the trend.

The report in Economic Times has cited an estimate made by Indian Software Product Industry Round Table (iSPIRT), which has said that as many as 75 per cent of new technology ventures which plan to raise capital to start up this year will be domiciled outside India. Apart from fund raising, start-ups are also fed up of the laws governing mergers and acquisitions and taxes.

Analysing iSPIRT’s Software Product index (iSPIx),  nine of the top 30 business-to-business software product firms have moved to the US, Singapore and the UK. Further, as many as 54 percent of the technology firms that has raised funds last year have already left Indian shores.

Mohandas Pai fears that due to regulations, every sale will become a nightmare for start ups in India. Here they have to face harassment and corruption in the tax system. Lack of sufficient risk capital and fewer customers willing to experiment with technology are major reasons that impelling Indian entrepreneurs to go away from their land.

Many entrepreneurs who had to move to the US feel that there is no concept of win-win approach among large enterprise customers in India. Their focus is more on the profit margin of the startup. Even young technology ventures in India are not provided with enough funds,while in US this sector is majorly focused.

The government, however, seems to have failed to make any headway in some of these issues. The Indian start-ups flying outside India is an indication that the young entrepreneurs are losing their patience.

The compliance requirement for businesses is very complex. Government needs to plan for minimal regulation, compliance and remove paperwork hurdles for starting a business. As we had already suggested just one day before the election results through our article, 4 Things NaMo can do to help entrepreneurship eco-system in India, that there should be a single window (an online or offline) where one gets full information about the registration, compliances, taxes, etc. The platform should provide a common place to get clearances for central as well as state level formalities.

It’s a high time for the government, if it wants to make a difference, it will have to come ahead with more meaningful reforms and at the earliest. Though government is working over the problem but still there is lack of visible results for entrepreneurs. We do not doubt the intention of the government. however, we do doubt the execution of the intentions. Government should reduce the tax litigations and make such rules which eases entrepreneurs. Entrepreneurs are still looking up to the government with great hopes that efforts which government is putting for the benefit of entrepreneurs will hold them to stay in India.

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