Nirmala Sitharaman's economic package: Measures announced by govt to positively impact start-up ecosystem, says IAN

The slew of booster measures by the government will 'positively impact' start-ups in the country, especially in sectors like social infrastructure, atomic energy and space exploration, by providing these fledgling organisations with a larger playing field and improving ease of business, according to Indian Angel Network

FP Staff May 18, 2020 11:51:18 IST
Nirmala Sitharaman's economic package: Measures announced by govt to positively impact start-up ecosystem, says IAN

New Delhi: The slew of booster measures by the government will "positively impact" start-ups in the country, especially in sectors like social infrastructure, atomic energy and space exploration, by providing these fledgling organisations with a larger playing field and improving ease of business, according to Indian Angel Network.

As part of the Rs 20-lakh crore financial package announced by Prime Minister Narendra Modi, the government has announced a number of initiatives to help various sections of the society, including MSMEs, migrant labourers, farmers and entrepreneurs.

"The FM has made some key announcements that stand to positively impact the start-up ecosystem. These range from the policy changes aimed at improving GST, Direct Benefit Transfer, and ease of doing business to expanding the playing field for startups across sectors such as power distribution, social infrastructure, atomic energy, and space exploration, among others," Indian Angel Network (IAN) co-founder and Chairman Saurabh Srivastava told PTI.

Nirmala Sitharamans economic package Measures announced by govt to positively impact startup ecosystem says IAN

Representational image. Thinkstock.

He added that IAN is hopeful that the government will take more of such relief measures in the near future to enable the start-up ecosystem to play a crucial role in driving the nation towards becoming a self-reliant economy.

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On 13 May, the government introduced the first set of measures aimed at helping MSMEs by providing collateral-free automatic loans and equity infusion via a Fund of Funds for such businesses, as well as revision in the definition of such enterprises. This had drawn a mixed response from the start-up community as many believed the package will benefit start-ups, even as others disagreed.

Finance Minister Nirmala Sitharaman on Saturday clarified that start-ups were eligible for the measures announced for MSME.

With businesses seeing significant impact due to the COVID-19 pandemic, many start-ups have frozen hiring, slashed salaries and laid off people.

To give relief to companies defaulting on loans due to the COVID-19 stress, Sitharaman on Sunday said no fresh insolvency will be initiated for one year under the Insolvency and Bankruptcy Code, while the minimum threshold to initiate insolvency proceeding has been raised to Rs 1 crore from Rs 1 lakh to benefit MSMEs. Besides, coronavirus -related debt will be excluded from definition of default.

"We welcome the decisions taken by the Government of India today (Sunday) to raise the minimum threshold to initiate insolvency proceedings from Rs 1 lakh to Rs 1 crore which will help insulate MSMEs to a great extent. Additionally, the move to not have any fresh insolvency proceedings for up to 1 year will provide businesses a reasonable amount of time to get back on their feet, in a post-COVID scenario," Kishan Jain, director at Goldmedal Electricals, said.

He added that the provision will allow MSMEs to "reorganise themselves and put in all their energies towards further growth and expansion".

For the education sector, the government said PM eVIDYA, a programme for multi-mode access to digital/online education, will be launched immediately. Manodarpan, an initiative for psycho-social support for students, teachers and families for mental health and emotional well-being, will also be set up.

Edu-tech company upGrad co-founder and MD Mayank Kumar said offline education has taken a massive hit since the closure of schools and institutions was imposed in mid-March in wake of the COVID-19 pandemic.

"The push from the government to online education will further drive everyone to get accustomed to e-learning and with SWAYAM PRABHA DTH, within a short period of time, everyone across the country will seamlessly have access to all educational content," he added.

The government has also decided to allow private sector to use ISRO facilities and other relevant assets to improve their capacities. Liberal geo-spatial data policy will provide remote sensing data to tech-entrepreneurs across various sectors.

This move is expected to help start-ups leverage these technologies to develop cutting-edge products in the country, in line with the government''s vision of ''Aatmanirbhar Bharat''.

Startups happy

Zishaan Hayath, CEO & Co-Founder, Toppr said, "The initiatives announced by the FM are a welcome move and if given an opportunity, we are always open to collaborate with the government to support students with our commitment to make high-quality education accessible to them and keep them engaged through our adaptive learning techniques. Besides this, our video lectures are free for all students of classes 5-12 across 20 boards including CBSE, ICSE and major state boards.

Vibhu Bhushan, Founder, Goprep, said, "It’s a welcome move. However, there are some challenges in the implementation of these policies and ideas. A complete transition from offline to online is not an easy task; there are a number of points to be considered such as training and guiding teachers for giving Live online courses, organising content and delivering it in a structured manner. This is the reason why we believe the government and EdTech industry should work together for a successful transition from offline to online."

Meeta Dasgupta, Assistant Professor, Strategic Management Area, MDI Gurgaon, said, "The initiatives announced to drive education technologically are very commendable. They have come at a very appropriate time, especially when going forward the new normal is expected to be digital. When operations of industries all over the globe were disrupted because of the Covid 19 pandemic, online education through various mediums ensured that learning for students and learners never stopped. However, students, teachers and parents who are used to face-to face interaction and bonding need encouragement to get accustomed to this new mode of engagement," Dasgupta said.

Anant Goyal, Director and Founder, Bright Tutee, said, "In midst of the current situation, digital learning is definitely the way forward for students across all state and national boards. We laud the government's efforts for thinking on these lines and launching the e-VIDYA initiative. If given an opportunity, Bright Tutee is always open to work with the government to make high-quality education accessible to all students through our adaptive learning techniques, similar to how we partnered with Rajasthan, Haryana and Nagaland governments."

Anil Nagar, Founder and CEO, Adda247, said, "The latest announcement by the finance minister regarding the state of the pedagogical sector in a post-COVID environment underlined the need for an overarching tech-empowered transformation of the entire educational vista. The need to go online through the digital mode is immediate and rampant to effectively continue the learning process for the countless students of the country. we at Adda 247 would like to wholeheartedly congratulate the visionary government of India for its part in envisaging a slew of brilliant and promising learning initiatives which are relevant to the present world dynamics such as launching the PM eVIDYA program that enables a holistic for multi-mode access to digital education for all classes."

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