STARTUPS-ORIGIN, RISE AND FUTURE

Our grandfathers were primordial, simple and satisfied. The so called specialization and division of labour was nonexistent. In our fathers’ generation, specialization was simple and the ‘seed of ambition’ was at its nascent stage. They went for ‘sarkari jobs’ viz. IAS, banks, etc. But once they entered the professional sphere, they never looked anywhere else. A job guaranteed a marriage and they were consumed in the nitty-gritty of family ties. Our elder siblings craved for money; there was a paradigm shift where success was measured in monetary terms. MBA was the ‘means’ to the ‘end’. A lot of opportunities were created with the embarking of world class B-schools. They loathed the idea of going through the gruelling process of IAS which ate away the prime period of a youth’s life. A MBA degree from a reputed B-school gave them a ticket to the seven digit salary job. Now coming to our generation, we are highly competitive, ambitious and balk to follow the conventional path. The only similar thing about our generation is that everyone wants to be different. We refuse to be one among the horde and espouse something niche. So how do we achieve that?

          Since success is a relative term, some individuals equate success with established societal norms (they go for IAS since it gives you maximum social respect and stature) while others pursue money. Here also there is a difference between money earned as an ‘employee’ and money earned as an ‘employer’. Whether it is entrepreneurship or quitting your job for IAS, both are aberrations that contravene common norms. So what do we do? The tacit belief is that if you are an employee, you are working for your organization and when you start your own business, you sweat it out for yourself. In today’s globalized world, there is a plethora of opportunities for the educated youth. Hence if the individual is not satisfied in any job, he won’t think twice before quitting. Here the concept of ‘self actualization’ comes into the picture. The current bunch is restless and perceives start ups would not only bestow money, but also lead them to self actualization.

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          ‘Start ups’ in layman terms means starting your own business. It is not neologism. The ‘gujjus’ and the ‘marwaris’ have always tilted towards family business or other forms of entrepreneurship. Their superior business acumen, which is innate in them, would make them the dominant players in this trade. Today, almost 40% of MBA graduates and almost 70% of MBA graduates from elite B-schools opt for start ups. The startling increase in internet connectivity via a variety of mediums- the computer, the tablets, the smart phones, etc. coinciding with a rise of middle class that has more disposable income than ever before and the aspiration to lead a life that qualifies as a ‘lifestyle’, has translated in the burgeoning of start ups in India. When I talk of start ups, a major chunk of them fall under the ambit of e-commerce. Much of the rapid e-commerce growth is powered by greater consumer choice and consumer awareness and the improved convenience offered by online shopping. Another important aspect is the wider choice that the e-commerce vendors offer in terms of products in sync with global trends. Services such as buying grocery and vegetables are a click away. One can search for houses at a new place. Once can book appointments in top tier hospitals through a common forum. One can compare the prices, the specifications of myriad products and decide accordingly. E-retailing in India is growing well beyond categories like apparel and electronics. It is hitherto entering into domains like travelling, health, food, entertainment, housing, insurance policies, income tax returns, etc. If there is a consumer for it, there is bound to be an e-retailer proving services for it. And if there isn’t, just wait for few months. Start ups such as FLIPKART, SNAPDEAL, MYNTRA are the dominant players in the market today. Other start ups such as ASKMEBAZAAR (a digital open market), MAKEMYRETURNS (empowering the payers to pay their taxes with ease), POLICYBAZAAR (buying an insurance policy online), PUMPKART (buying water pumps online), CREDIHEALTH (providing health facilities from booking appointment to delivering medicines) are emerging at a very fast rate.

catch 22

              Modi, being an astute politician, very well understands the aspirational demographic profile and their psychosis. Hence in the recently announced budget, the government has provided a huge impetus by reserving 10,000 crores for these start ups. Earlier the investment in the form of venture capital would arrive from foreign investors. But with such a step, the government has given signal of its intentions. Hence with government backing, this is the time to go for start ups and build an ‘Israeli culture’ (where children learn innovation, creativity and entrepreneurship right from the school itself) in India.

             So what about the future of start ups in India? The first decade of the twenty first century witnessed the so called ‘IT boom’, which culminated in the bursting of bubble in 2008. (The Lehman brothers fiasco) Will start ups, especially E-commerce meet the same fate? In the E-commerce sector, there is already a lot of competition. So unless a new start up can provide something new to the consumers, and perpetually revamp itself with the changing needs, it won’t survive. Such a start up needs to benchmark itself and thus differentiate itself from the rest of the flock. On the contrary, human needs are humongously insatiable. Changing time will give rise to new wants. Hence there will always be a window of opportunity to carter the new needs. Hence what is required is that the start ups need to be on their toes to grab such opportunities. In simpler terms, consumers can have needs ranging from health, education, decoration to environment and hygiene.  So with new wants, will come new service providers. So the bubble of start ups bursting in the current scenario seems to be a distant myth. So for us, we need to play the ‘wait and watch’ game since the ultimate gainers will be the consumers themselves.

SECULARISM: A DIFFERENT PERSPECTIVE

In his autobiography ‘My Experiment with Truth’ Mahatma Gandhi wrote, “My devotion to Truth has drawn me into the field of politics; those who say that religion has nothing to do with politics, do not know what religion means.” Recently the comments of former defence minister A.K.Antony that in order to appease the Muslims, the Congress party lost the faith of the Hindus, has sparked off a controversy. It is no secret that all the secular parties project themselves to be the messiah of the Muslims, fighting for their rights and liberties. But by doing so, they take the majority for granted. This aspect of Indian society was evident in the just concluded general elections. Narendra Modi in his pursuit to enhance his secular credentials, didn’t lose the connect with the core ‘hindu’ votes. He perpetually reached out to the ‘majority’ by invoking the policy of ‘justice to all and appeasement of none’. Hence for the first time, ‘secularism’ has come under intense scrutiny or in fact being challenged by the common mob.

 Out of the commonly accepted three definitions of secularism, one is people-centric; another is state-centric and yet another is India-specific. Firstly, the people-centric definition emphasises the idea of separating religion from politics, economy, education, social life and culture. The purpose of this separation is not to stamp religion out from life but to contain it to the private lives of individuals (as witnessed in US). A secular state is not supposed to discourage the practice of religion but neither can it base its policies

on religion. The ultimate goal is to make religion a personal affair. Most societies have followers of different faiths and this puts a great responsibility on the state to be neutral. The state-centric definition of secularism emphasises the need to keep the state neutral to all religions. Religious people would like to see the state to show equal regard to all

faiths but others may demand the same respect for atheism. The demand normally is that the state must treat all its citizens equally. This means that the state must neither favour nor discriminate against citizens on grounds of their religion. The third India-specific definition of secularism underlines the importance of the unity of all people against colonialism and communalism. A secular state and society were a part of the social vision of the Indian national movement. Hence, despite the horrendous violence in 1947 and the making of Pakistan ostensibly on religious lines, secularism remained the abiding principle and opposition to communalism was the chosen policy in Independent India.

                    In today’s world, religion is a reality as well as a necessity. Even before the current phase of globalisation, capitalist institutions like the market integrated vast areas and people in different parts of the world. There were the capitalists and the wage-earners. The wage earners were devoid of ownership of the means of production due to their poverty. After being paid a subsistence wage, these workers were alienated from the fruits of their labour due to the prevailing social relations. Hence, they grasped the conception of God and institutions of religion to compensate in imagination what they had

lost in the real world. Religion was welcomed by them into their culture in order to make the conditions of the ‘heartless world’ slightly more bearable. On the other hand, capitalists needed religion to buffet the brutal uncertainties strewn in their lives, both as individuals and firms, busy with the task of accumulating capital. The capitalists may occasionally also need religion to be used as an instrument to pacify potential rebels among wage-earners. Imagine the role of religion in the lives of the Tatas, the Birlas, and the Ambanis. Hence the words of Marx that ‘religion is the opium of all masses’ is rightly justified as religion comes to the rescue of these wage earners and prevents them from fighting for their rights and liberties.

Capitalist societies can be divided into two main categories according to the nature of Church-State relations. The first category consists of those who have a declared State religion and only the adherents of the State religion could become the head of the State, member of high state institutions and participate in the management of State affairs. In the second category, fall countries which have officially declared the separation of the State from any religion but in practice religion is present in the cultural life of the nations. Agencies of the State get involved with the religious ceremonies in the interests of public order, religious education is regulated in the interests of uniform educational standards and religious institutions are overseen in the interests of public good. The Indian case falls in this latter category where there is a formal separation but actual involvement of the State with religious affairs.

             In the context of secularism, there has been a considerable debate about the suitability of the concept and practice of secularism in India. Secularism and religion are mismatched in an Indian scenario since religion is irrational and makes a guarded attack on modernity, while secularism signifies modernization. If secularism wants to remove religion from the public life and culture of India, it’s not going to happen.

HINDUTVA AND SECULARISM

Hindutva or Cultural Nationalism is BJP’s conception of nationhood. According to the judgement of Supreme Court of India, Hindutva is ‘a way of life’. It signifies a culture of tolerance and universalism. The BJP owes its origin to the non political organization such as the RSS and hence cannot relinquish the ‘Hindu tag’. This explains the reason as to why Modi refused to wear the skull cap during his ‘sadbhavana fast’ and refuses to apologise for 2002 riots. He also chose a safe, Hindu dominated constituency of Allahabad to contest his first election outside Gujarat. But what’s wrong with it? Modi proudly proclaims himself to be a Hindu nationalist and wears its ideology in his sleeves.

Hindutva can be distinguished as a faith and as an ideology. Hindutva as a faith means ‘a

way of life’, a tradition that is non-monolithic and operationally plural. Religion as ideology, on the other hand, is a ‘subnational, national or cross-national identifier of populations contesting for or protecting non-religious, usually political or socio-economic, interests. Modernity produces religion and then generates secularism to meet its challenge.

Religion inevitably enters public life through the back door and this leads to communalization of politics. On the other hand, secularism has turned into an intolerant ideology with modernization, development, scientific growth and nation-building as its

allies or constituents. This secularism alienates believers and breeds both old and new kinds of violence. Such secularism breeds old violence in the form of backlash of marginalized believers which in turn reinvigorates bigotry and fanaticism. Secondly, this secularism generates new violence between nation-state and religious communities.

      It is important to accentuate the ‘other side’ of secularism too; the anti-religiosity

and the hyper-substantive secularism which excludes religion from public life. It’s time to privatize religion and rationalize politics. Secularism is criticized for being invalid in circumstances where religion is of immense importance to people. Modern culture is a mixed bag and its outright rejection may not be the best way to have secularism.  On the one hand, modern culture has some frightening flaws like a drive to control; a purely instrumental and destructive stance towards nature and human life, towards poor, marginalized sections and victims of the savage side of capitalism. The onus is on us to go for ‘my way’ or the ‘high way’.

BUDGET: HOPE, EXPECTATION AND PRAGMATISM

As the new government gets to work, one key item on the agenda would be the revival of growth. The key to achieve such an objective is to revive the investment climate. The major challenge for the government would be to revitalize the investors’ faith while at the same time keeping the inflation in check. The Reserve Bank of India’s Financial Stability Report (FSR) highlights that the Global financial markets are showing signs of improved stability although growth is still not on strong ground and easy monetary policy continues in many jurisdictions. On the domestic front, the return of a stable government has definitely provided impetus to the money and the capital market. The BJP led government has already signaled its happiness with the RBI, taking a stern line against the rising food prices by keeping the interest rates pegged at the existing high levels.

      Onions can make the government cry. This has been witnessed in the recent Indian history. Such are the conundrums of facing the country that presenting the general budget is equivalent to a juggler, walking on a tight rope while multitasking. Steps taken to rein in onion and potato prices by raising the minimum export threshold price, is a clear indication of where the Modi government’s priorities lie at this moment. Given the battle against WPI that is being driven up mostly by food prices, it would be a great challenge to inject a growth impetus in the budget.

      The Iraq situation is not going to help India. The rising oil prices will also have a big impact on the CAD (Current Account Deficit). If the oil prices go out of control, what will happen to India’s import bills? (India meets 80% of its oil requirements by importing from foreign countries) So in order to curb in the CAD, a major decision would be to increase the import duty on gold, which was used by the previous government. But if the BJP wants to reduce the import duty on gold to please the electorate that voted it in, where then would it find resources or the ‘bitter pills’ to keep the CAD at bay?

       Election of pro market Narendra Modi has raised hopes that reforms will be put on fast track mode and projects which earlier got stuck, will be cleared. This has led foreign investors to invest over one lakh crores till date in equity and debt taking stock markets, to a new high. Also, what has been helpful in part is the Ukraine crisis in Russia and concerns about growth in China. Money which would have been poured in these two countries, is coming to India. With such high hopes from the government by the investors-both domestic and foreign, any slip off in budget will be severely punished.

        Along with the growth and inflation, many issues need to be addressed lucidly too. The ignominious invoking of the retrospective taxation system in the Vodafone case, has attracted the ire of the foreign investors. It needs to be resolved. GAAR needs to be addressed and its implementation should be postponed. Hard decisions regarding the subsidy on food, fuel, fertilizers, LPG should be pondered upon. GST should be implemented. But it would be interesting to see how it materializes since Modi, as chief Minister of Gujarat, had opposed it vehemently. There is also a need to increase the non tax revenue of the government. PSUs sitting on a huge pile of cash which they are not using, should be asked to give more dividends to the government. The DTC (Direct Taxes Code) Bill, which has been dwindling in the Parliament for too long now, needs to be legislated. Also over the last three years, India has been hit badly by ‘transfer pricing’ issues too. Finally, we continue to pursue the exchange of information with Switzerland, we need to enter into a treaty of the type entered into by UK where account holder who doesn't agree to be named, would be taxed on the accumulated balance and on ongoing income.

         Also India’s greatest bugbear of the immediate future is going to be the unemployment issue, in a country with an increasingly younger demographic profile. If there is no growth in the manufacturing sector, which is actually the prime mover of employment generation, the rising demands of the aspirational India won’t be met and the Indian market will be flooded with cheap Chinese products.

         According to the Prime Minister, the nation has to be governed with certain ‘bitter pills’. But if Mr. Jaitley assumes that he can do that by tinkering with the tax laws or reducing subsidies, he would fail badly. The test for the Finance Minister would be to improve India’s rankings in the Human Development Index, Ease of Doing Index, and Corruption Index. For this, he has to be refreshingly different from his predecessor.