National Startup Advisory Council

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Context: On January 22, 2020, the Union Ministry of Commerce and Industry has set up National Startup Advisory Council. The council will suggest ways to build strong startups in the country.

Relevance:
Prelims: Economic and Social Development Sustainable Development, Poverty, Inclusion, Demographics, Social Sector initiatives, etc.
Mains: GS III- Indian Economy and issues relating to planning, mobilization of resources, growth, development, and employment.


National Startup Advisory Council:

  • The Central Government has notified the structure of the National Startup Advisory Council to advise the Government on measures needed to build a strong ecosystem for nurturing innovation and startups in the country to drive sustainable economic growth and generate large scale employment opportunities.
  • The council is being set up in the wake of a plethora of regulatory changes covering startups in the works to reduce time spent on tax compliance by them to less than one hour a month along with easier incorporation processes and boosting the availability of global and domestic capital.
  • India ranks 136 on ‘starting a business’ in the World Bank’s ease of doing business table against an overall rank of 63. Some of the measures in the works are also expected to tackle this.
  • Composition: 
    • The National Startup Advisory Council will be chaired by Minister for Commerce & Industry.
    • The Council will consist of the non-official members, to be nominated by Central Government from various categories like:
      1. founders of successful startups,
      2. veterans who have grown and scaled companies in India,
      3. persons capable of representing interests of investors into startups,
      4. persons capable of representing interests of incubators and
      5. accelerators and representatives of associations of stakeholders of startups and representatives of industry associations.
        • The term of the non-official members of the Startup Advisory Council will be for a period of two years.
    • The nominees of the concerned Ministries/Departments/Organisations, not below the rank of Joint Secretary to the Government of India, will be ex-officio members of the Council
    • Joint Secretary, Department for Promotion of Industry and Internal Trade will be the Convener of the Council.
  • Functions: 
    1. The Council will suggest measures to foster a culture of innovation amongst citizens and students, in particular, promote innovation in all sectors of the economy across the country, including semi-urban and rural areas,
    2. The council will support creative and innovative ideas through incubation and research and development to transform them into valuable products, processes or solutions to improve productivity and efficiency and create an environment of absorption of innovation in the industry.
    3. It will also suggest measures to:
      1. facilitate public organizations to assimilate innovation with a view to improving public service delivery,
      2. promote creation, protection, and commercialization of intellectual property rights,
      3. make it easier to start, operate, grow and exit businesses by reducing regulatory compliances and costs,
      4. promote ease of access to capital for startups, incentivize domestic capital for investments into startups, mobilize global capital for investments in Indian startups,
      5. keep control of startups with original promoters and provide access to global markets for Indian startups.

What was the need for National Startup Advisory Council?

  • The government is the single largest enabler for the entrepreneurial ecosystem.
    • The government's role in ease of doing business and helping companies start is vital to ensuring success.
  • It is uncannily difficult to start a business in India and myriad laws and regulations mean it takes about 30 days to comply compared to just 9 days in OECD countries.
  • The government’s role has so far been limited to giving out grants and loans, but without an effective, enabling environment, implementation is far off the target. 
  • For startups to thrive and succeed, the government has a lot to do and understand the importance of entrepreneurship in economic development.
  • India has a unique set of problems that need innovations to originate out of the country.
    • Problems around its health, education, infrastructure, sanitation are unique to the country and solutions from the western world cannot solve it.
    • Each problem provides a unique opportunity for startups to solve some pressing issues and at the same time create a business around it.
    • What helps is that most problems around emerging economies are similar in nature and solutions applicable here can also work in many countries in Africa and elsewhere.

Conclusion:

  • India is at crossroads where it now has to cater to the aspirations of a billion people.
  • Existing frameworks can prove to be inadequate and there is a great need to leverage a billion minds and become a global power.
  • Startups and entrepreneurship is the best way forward in becoming a knowledge superpower.
  • The National Startup Advisory Council is a good step in this direction. 



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