Start-ups frown as govt fails ‘walking the talk’ DST to come out with 2nd policy even as they await perks of the 1st

Ahmedabad: Start-ups in Gujarat are furious as policy announcements of Gujarat government are not being followed in a concrete way. They are seeking transparency in the execution of the policy and consider the nodal institutions, which are supposed to execute the policy, to be lethargic. The discontentment has risen as the state government is coming up with one more policy, even though it has not been able to effectively implement its first policy.

The Industries and Mines Department (IMD) came out with a Start-up Assistance Scheme in January 2015, with annual allocation of Rs500 crore in 2015-16, whose benefits are yet to reach any of the start-ups. Last week, the Department of Science and Technology (DST) announced that it would soon come up with a Start-up Policy for technology start-ups.

Local start-ups feel that the state government should instead focus on transparent implementation of the existing policies. The government has allocated Rs15 lakh to each NI. Even after about 16 months of formulation of the scheme, about half a dozen start-ups have just recently received monthly allowances of Rs10,000.

A founder of a tech start-up, who is in the process of raising money, told dna on condition of anonymity that the promised grant of Rs10 lakh, if given to him, would give him much needed support. “If my investors feel that I desperately need money, they can seek higher share in equity. If I have reasonable cash on hand, I can bargain for lower equity dilution,” he said.

Another co-founder of a start-up complained that in spite of applying to one of the NIs, a leading incubator, he is unclear whether he will receive the funds or not? And if yes, when? “Funds are like oxygen for start-ups. If you don’t get it on time, they are useless. It has been months since I have applied, but I am absolutely clueless about the turnaround time,” he said.

Jatin Chaudhary, founder of eChai, a network of entrepreneurs, told dna that initially start-ups were enthusiastic about the Start-up Assistance Scheme, but have hardly seen any benefit trickling down towards them. “The scheme provides Rs10 lakh grant for converting ideas into a prototype. But most of the start-ups have crossed this stage and need more funds for expansion. So they don’t qualify for this part of the scheme,” Chaudhary told dna.

He observes that most of the start-ups are cash positive, but are unable to scale fast and it is here that they need support, either from private players or government. Arvind Agarwal, ACS in the department of industries and mines and Mamta Verma, industries commissioner of Gujarat did not respond to dna’s calls or SMSes, till the filing of this report.

Courtesy : DNA

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