Start-Up Succour

The government has signalled its intention to create a more nurturing business environment for start-ups. Now to see if it will come good on those promises

- M.G. Arun

While finance minister Nirmala Sitharaman was presenting the Union budget on July 5, Tarun Mehta, 30, co-founder of the electric scooters maker Ather Energy was in Chennai, gearing up for a big launch in a city with 4 million two-wheelers on its roads. It couldn’t have come at a better time: Sitharaman announced attractive sops for electric vehicles (EVs), including a cut in the applicable GST (Goods and Services Tax) rate from 12 to 5 per cent. “This is an extremely laudable decision,” says Mehta, whose Bengaluru plant can build 30,000 electric scooters a year. “Prices will fall, both for manufacturers and customers.” While the government also announced an income tax deduction to make EVs more attractive to prospective buyers, much more was in store for start-ups as a whole.

Mehta and his co-founder Swapnil Jain, 30, both IIT Madras alumni, started work on developing a lithium-ion battery pack at the start of the decade. Their work saw the birth of an electric scooter, the Ather S340, in 2013. But those were not easy days. “The paperwork was endless,” Mehta recollects. Most intriguing was the way the authorities insisted on keeping an attendance record for every employee, which, for a struggling start-up, was not exactly the focus.

India is ranked third in the world in the start-up ecosystem, according to the Economic Survey released on July 4. IT industry body Nasscom estimates that over 1,200 tech start-ups are born in India every year. At a time when the government has taken much flak for rising unemployment (at 6.1 per cent, the unemployment rate was the highest in 45 years in 2017-18), it is believed a thrust on start-ups will help generate more jobs.

GROWING AGAINST ODDS