Inadequate Funding Slowing Down Rapid Growth of Start-Ups – Sachin Mittal


Start-up companies are the next big thing in today’s world. With the rising interest in this new breed of organization, two important factors that pop up are the creation of jobs. The tech sector is expected to generate more than 2.5 lakhs jobs in the coming few years. Secondly, e-commerce in the Indian market is also expected to rise by 50% in the next few years, for which tech start-ups are responsible.

“Start-up India, Stand up India”

Start-ups are important factors in the current state of business affairs in the current scenario of this country, bringing revolutionary changes in the system of doing business, the attitude towards getting out of precedence and resulting into newer concepts altogether. India’s huge untapped potential is now being explored into and different initiatives are being taken to do business with Indian start-ups.

India is still placed in a position of around 140 in the World Bank’s list in the ease of doing business category. I was really excited when the present Government at the centre announced the new campaign “Start-up India, Stand up India” to encourage start-ups and help them get bank financing and also proposed incentives to enhance entrepreneurship and creation of jobs. Even, SEBI has relaxed some of its norms.

I feel that this will definitely be a boost for the start-ups of this country. Investors of foreign origin are now turning their heads towards the potential of this country and this will definitely divert foreign currency and enhance our economy.

Slowing down because of inadequate funding

However, I feel that what has been done till date is a very meager percentage of what should been done. In spite of all the efforts, I am sorry to find out that the rapid growth of the start-ups are being slowed down mainly because of one single factor, which is inadequate funding.

Let us keep aside the finance that is coming from foreign soil. Let us consider it secondary because a business medium in a country may first need investment from its own land. It is very important that the local investors should invest on a model and make it successful in the first place. That is the primary point we should concentrate on.

The Indian investors are primarily inclined upon investing more on conventional businesses. Even the nationalized banks are keen to provide loans based on precedence. As a result, the new ideas are not being focused upon the way they should be. I feel that the new business ideas are being considered as alien and, therefore, risky and are being, to some extent, avoided.

System getting a big blow

The Government did start its schemes, but the gain, the publicity or the guidelines set to the investing authorities are not adequate enough to bring the required change in the mindset of the concerned people. This is where the system is getting a big blow.

My suggestion would be that publicity should be made by the Government on its schemes in a wider sphere so that the concerned people responsible for the seed money for start-ups have a clear-cut idea regarding what is going on. Not only will this help the future business by leaps and bounds, it will also open the door towards a new horizon.