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Investors' perspective: Can the new government mean fresher opportunities? As the new government is formed, India looks at a fresh government and hopefully, a fresher approach that helps the country stand out from the firm competition in the global business ecosystem.

By Prince Kariappa

Opinions expressed by Entrepreneur contributors are their own.

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Nirmala Sitharaman at a post budget interaction event in 2023. Image credits: Instragram

As the new government is formed, India looks at a fresh government and hopefully, a fresher approach that helps the country stand out from the firm competition in the global business ecosystem. The nation also waits as the new budget is yet to be announced along with the reforms and effects it brings especially to the burgeoning startup landscape in India.

The last updated World Bank's Ease of Doing Business Index measures progression in the field such as starting a business, credit accessibility, minority investor protection, resolving insolvency, and a host of other metrics. India currently ranks 63 but a lot has changed since the last rankings. A global pandemic but a resilient startup sector in India has played its part. It is also noteworthy to consider the performance of other developing economies as well.

Data indicates the number of new companies founded from 2019-2024 to date in India.

The spotlight is now on the third term of the Narendra Modi-led BJP government in power and the next five years seem set to bring a lot of reforms and changes, especially given how the elections have panned out.

Public opinion has spoken, and it is imperative that a strong performance is necessary if the BJP intends to recover the dominancy it experienced in the previous campaigns. The INDIA alliance has also spoken about promises to reform business in India and the current government will have to step up.

Sandiip Bhammer, Founder and Co-Managing Partner, of Green Frontier Capital assert that the new government's startup agenda should focus on enhancing access to capital, simplifying regulatory frameworks, and providing incentives for innovation.

Along with simplification of regulations with the help of single-window clearances to reduce bureaucratic hurdles, establishing funding mechanisms like grants and subsidies, especially for climate-tech startups, is crucial.

Bhammer says, "Incentives for research and development, including tax breaks, can spur innovation. Strengthening infrastructure, particularly digital and energy infrastructure, and investing in skill development through targeted education programs are essential."

"Public-private partnerships can leverage resources and expertise while a focus on sustainability will support green technologies and solutions," adds Bhammer.

The 'Seed Fund' scheme for startups under the Startup India initiative worth INR 945 Crore is poised to finish term in 2025 and the Commerce and Industry Ministry of India is expected to seek a bigger purse in the forthcoming budget, as reported by the Economic Times. The new budget is expected to be announced in July.

All focus is on Nirmala Sitharaman, who resumed her position as the Finance Minister of India. The Union Minister interacted with the start-up and fintech ecosystem partners back in February to enable the free exchange of ideas and scale operations to facilitate global competitiveness by enabling the Fintech sector. India has approximately 10,244 Fintech entities, which is the third largest in the world, according to the Indian Ministry of Finance.

The Modi-led government has always been vociferous in backing the cabinet's efforts to make India more investor-friendly. Followed by the famous Elon Musk snub to visit India, the Finance Minister responded to a question on this. As reported in Hindustan Times.

Nirmala Sitharaman said, "We have made policies in such a way that we are making India an attractive destination, both for manufacturing and services."

Karan Desai, Founder of Interface Ventures believes that the budget announcement holds significance, as questions still linger around MSME due settlement, green transition, solar power mission, taxation policies, startup ventures, critical transport infrastructure, and zero-emission vehicles (ZEVs)among several others.

He says, "Until the budget details are revealed, investors are more likely to adopt a wait-and-watch approach. The short term investing yet can be volatile. Focusing on startups with strong fundamentals and established track records might be a prudent strategy in this uncertain climate."

"However, a forward-thinking budget that prioritizes entrepreneurship could spark an increase in investor confidence and fuel the next wave of Indian innovation," furthers Desai.

As with any new government, expectations are high and are expected to provide a favorable environment for startups and investors to thrive. "Regular engagement with the startup community will ensure policies are aligned with their needs, fostering a vibrant ecosystem that drives economic growth and innovation," opines Sandiip Bhammer.

Murali Krishna, Principal at Spyre VC which is India's first PropTech fund for real-estate startups says with the new government in place, India looks forward to fresh ideas that boost its global business standing.

"As an investor, I hope the government increases investment in technology for infrastructure and real estate. This can make these sectors more efficient and sustainable. Simplifying regulations and offering financial incentives would also help," Krishna adds.

Prince Kariappa

Features Content Writer

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