Skip to content
Having targeted the major problems of heavy taxation and regulation, the government has knuckled down to get the right initia

Startups and unicorns have been the buzzword ever since we are exposed to this global business industry.

While the ventures of developed countries were expanding at an unmatched pace, India was left behind with a massive technology gap.

Does that mean India didn’t have the knack for business?

It did have! And It wouldn’t be a stretch to say that Startups have always been there in the blood of Indians. Indus valley civilization and the rebirth of urban civilization are the biggest examples. [1]

Why didn’t Indian startups progress at a faster rate then?

I know we all want fast growth, but what if I told you that slow and steady wins the race.

Take the example of a startup Doodhwala.

Oh, the startup that came as a revolution to connect Milkmen across mega-cities!

Yeah, but eventually failed! Do you know why?

The same obsession with “fast growth” became a recipe for disaster. A startup connected with a huge network of Milkmen to deliver fresh milk soon got spanned across India.

Yeah, everyone does expand! What is wrong with that?

It is about the timing. Branching out at a time while keeping your foundation strong is the best way to go. But, Doodhwala seemed to care more about the superstructure without initially settling the foot in one place. [2]

Does that mean India was right with the startup strategy?

Not totally. Agreeing that India’s growth in the field of entrepreneurship has been slow and sustainable, there are still many impediments in the past that can’t be overlooked.

What were they? Let us discuss.


The most important of all is Funding which works similar to how oil works for an engine. It is the most crucial aspect upon which the degree of expansion depends. As simple as it may sound, the process is complicated enough to push founders into an ominous cycle of nightmares.

Wanna experience the dread of those nightmares?

Well, the plight of Indian startups before 2016 is enough to give you one.

Earlier, most of the Indian startups were funded by Alibaba and Tencent. Such huge firms! But, a series of laws were popped up by FDI citing security threats as a reason. No doubt, when China comes into the picture, security concerns always tend to surface.

And this time around,

it surfaced in the form of multiple regulatory approvals for Funding.  [3]

It decreased the funding rate and ultimately made startups a risky bet. As with no choice left, founders had to put commodities and real estate assets at risk.

Let us now see what else further added up to this peril.


I know it may seem irrelevant today to discuss heavy taxation imposed on budding startups. But, it was the norm before the initiatives like “Make in India.”

So, earlier, the valuation of startups often caught up with heavy taxation. Based on their projected growth, the tax department put startups and investors under the tax radar.

But, there is often a huge gap between the projected and the actual growth – leading to an unjust increase in the tax rate. [4]

Hmm, the government seemed to have squared up the pressure.

But, before you conclude that it is all government’s fault, let us try and understand what lies at the heart of this issue. [4]

Traditional bias

We Indians have always had multiple biases regarding issues ranging from politics to religion. But, have we ever observed the Indian mindset when it comes to startups.

A place where parents imbed the career plans into a child’s mind even before they are full-grown individuals – A startup would sound alien to us.

Startups didn’t quite fit into our conventional race of getting into the top 1% seats offered by top 1% colleges and then landing a 7-figure salary. It was out of place for so many until we heard success stories of Zomato, Policy Bazaar, Byju’s, and so on.

When did the growth start then?

The growth started when the then prime minister Rajiv Gandhi launched NASSCOM in the 1980s. Since then, it has set forth a revolution for startups in India.

Nasscom – the revolution

Footing the bridge among different industries, Nasscom has been playing the role of catalyst in binding the IT and BPO industry together. With different initiatives and summits, NASSCOM greatly boosted the entrepreneurial spirit.

So, what were the key features of NASSCOM?

NASSCOM is referred to as the trade and chamber body of the Tech industry in India, whose objective is to boost entrepreneurship. With a 10,000 startup initiative, it comes up with the following features: [5]

  • Structured programs that bridge the knowledge gap across industries.
  • Various events to attract field experts.
  • Seamless integration of IT and non-IT sectors for a seamless operation
  • Funding opportunities enabled through Networking

But wasn’t all of this soon followed by a massive recession?

Yes, who isn’t aware of that ominous recession costing lakhs of jobs. But what if I told you that the recession did the opposite to startups?

Shocking is it!

Okay, before you debunk this as absurd, let me tell you the aftereffects of the Great Recession.

The Great recession

Have you closely followed the Green Revolution?

I know the question seems out of place here.

But, if you had closely followed it, you would know.

When the U.S and other countries threatened India to either stop the war with Pakistan or face a severe shortage in supply of grains, that was the time when India decided to become self-sufficient.

Did they succeed?

Yes, emerged as one of the largest producers of food grains through the Green Revolution.

That is how History has shown us that deprivation is always a cause of invention. The same holds in the case of startups.

Great Recession 2008 was a storm that uprooted around 34 million jobs worldwide. But also allowed those employees to look for alternatives – Startups.

One upside of the recession for startups was an increase in labor markets. So, startups could easily deploy the human capital at competitive pricing. [6]

But again, all this couldn’t have become a huge success had this not been steered in the right direction.

And it was unexpectedly done by the government schemes.

A slew of Schemes

The current Prime Minister of India has developed several initiatives to support the entrepreneurial spirit.

While Initiatives like IT exemption for three consecutive years enabled risk-taking, on the other hand, events and competition-based grants have allowed engineering and management students to receive funds and equities. [7]

So let us know more of,

What emerged as the major supporting factors.


The advent of AI, Blockchain, and other interfaces, has allowed companies to maximize their outreach while enabling a good customer experience.

The internet has also revolutionized holistic education by disrupting technology and reducing faculty labor costs.

Now with a click of the internet, you can access the best quality videos and learn about Brand Marketing to expand your startup! Or maybe you can do a basic management course to enhance leadership for team growth.

So much to explore and so much to learn!

The talent pool

India’s IT sector has been growing by leaps and bounds. The government has equipped the best minds across the country from engineering and other courses with several initiatives, including DBT, SBIRI, etc.

And when we talk about the talent pool, how can we not mention the Bio-Tech revolution. The reason for their success is the resources that allowed the government to tap into a huge unexplored pool of talents. [8]

So, let us talk about the government initiative.

Government Boost

The government initiatives have worked from all fronts in enabling a startup-friendly atmosphere.

Having targeted the major problems of heavy taxation and complicated regulation, the government has knuckled down to get the right initiatives.

While Step platform and NewGenIECD empower youths towards entrepreneurship, initiatives like Start-up and Make in India are at their best in democratizing entrepreneurship.

And what about the major barriers like tax and underinvestment.

Well! That has been taken care of too.

From legal support in a patent filing to tax exemptions up to three years to facilitating funds through various schemes. What else do you need? [9]

So, What lies ahead?

Well! A lot more lies ahead.

According to the recent information from MHA, more than 6 lakh citizens have renounced their citizenship in search of better opportunities elsewhere. [10]

This Brain Drain needs to stop. Not only does it hamper the progress of India, but it also makes Indians more vulnerable to unprecedented hits in those countries, including epidemics or political unrest.

Ukraine was the most heart wrenching case in support of an immediate overhauling of the education system.

And as we know, a holistic education has always been an enabler of entrepreneurship. So, it is incumbent upon governments to make this education and awareness accessible to all – crossing the demographic barrier.

So, while the government is all set to herald the self-sufficient image of India, some responsibility lies with us too.

And that is “To start making mistakes faster.”