Startup Deregulation in India!

Here is one brilliant and beautiful idea from Paul Graham and I think India needs it the most.

Here is one excerpt:

Letting just 10,000 startup founders into the country each year could have a visible effect on the economy. If we assume 4 people per startup, which is probably an overestimate, that's 2500 new companies. Each year.

Also, more importantly, the one that applies to India - less Govt. control and regulations. The less the better. The Indian IT has thrived well as there is minimal Govt. Control. Paul continues to write:

The tricky part might seem to be how one defined a startup. But that could be solved quite easily: let the market decide. Startup investors work hard to find the best startups. The government could not do better than to piggyback on their expertise, and use investment by recognized startup investors as the test of whether a company was a real startup.

How would the government decide who's a startup investor? The same way they decide what counts as a university for student visas. We'll establish our own accreditation procedure. We know who one another are.

India, one of the most corrupted countries in the world (mostly due to politicians, bureaucrats, and govt. employees) can easily do this as so much taxes are levied on hard working citizens. Also, India is ranked as one of the harshest countries in the world for tax regulations.

We do not get any benefit as such for tax payment (water - can not drink tap water, electricity - in the "Silicon Valley" Bangalore everyday there is power arbitrage, infrastructure - do I need to write anything?, etc.). And we are alright with it and we move on and continue to vote. So, in this case, Govt. can at least let the regulation loose on startups. We have seen that it is private enterprises who increase the standard of living and hence let them flourish more.

Coming back to the main theme, in India, it is not about VISA, as nobody is coming to India as such. Rather, it will be more in line with launching a new policy which will give new incentives to Indians who want to start Tech ventures or others (on which we have shown promise). Indians are known to be survivors in lowest possible cost and let the Govt. do its little bit to enthuse the silent and sleepy entrepreneurial spirit.

What Indian Govt. can do for this?

- Give them a complete Tax Holiday for 10 years (or at least 5 years)

- Minimal Govt. Control and let the investors decide (with a board maybe) on which one can be considered as startup

- Tax can be there on the Employees of startups and it has to be minimal so that best talent which are dying in the remote corner of many lethargic companies can easily change jobs

- Create more SEZ specially for startups

- Give incentives and land at reduced prices for startups

etc.

This is "Now or Never". A number of Indian companies are sitting on huge cash pile and a number of people are returning back to India. As I have seen, the younger generation is much more hungrier than before. If India does not do it now, then it will unwittingly let China rule the world in this century. Above all, it does not hurt most our self serving politicians and bureaucrats much!


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