By Vartika Aggarwal, Vivekanada Institute of Professional Studies
The 2015 Budget is one of the most anticipated budgets in recent history. The 2015 budget was highly anticipated as it was a full year budget, which was filed by the pro-business Modi Government and because it has the potential to kick start the lagging Indian economy. The 2015 budget also has certain aspects that could provide a boost to the Indian Startups and Entrepreneurs.
The Union Finance Minister Arun Jaitely in the General Budget 2015-2016 said, “We are now seeing a growing interest in startups. Experimenting with cutting edge technologies, creating value out of ideas, initiatives and creating them into scalable enterprises and businesses is at the core of our strategies.” The Finance Minister is taking this as the prologue announced the Self Employment and Talent Utilisation (SETU) scheme and the Atal Innovation Mission (AIM). These two programs aim to promote entrepreneurship, create innovation hubs and solve problems through Grand Challenges.
These programs require a very innovative way of execution. They need large-scale involvement of the private sector and collaboration with multiple agencies. The creation of an institutional mechanism for delivery with government funds being the catalyst and enhancement of the existing ecosystem to increase impact is also required.
An Expert Committee under the Chairmanship of Prof Tarun Khanna, Director, South Asia Institute, Harvard University and Jorge Paulo Lemann Professor, Harvard Business School, USA, has been set up to workout on the detailed contours of ATAL Innovation Mission (AIM) and Self-Employment and Talent Utilisation (SETU). It will make short- and medium-term recommendations for actionable policy initiatives aimed at creating an innovative and entrepreneur friendly ecosystem, including such elements as creation of world class innovation hubs and digital SMEs and innovation driven entrepreneurship in such sectors as education and health.
He said that the government aims to set up a Self-Employment and Talent Utilisation (SETU) mechanism at a budgeted amount of Rs 1000 crore to encourage cutting edge technology startups to convert their ideas into business. He said that SETU will be a Techno-Financial, Incubation and Facilitation Programme, which will support all aspects of start up businesses, and other self-employment activities, particularly in technology-driven areas. SETU will be initially housed in NITI Aayog. NITI Aayog or National Institution for Transforming India (NITI) Aayog is a policy think-tank of Government of India that replaces Planning Commission and aims to involve the states in economic policy-making in India.
The Finance Minister with the objective of setting up SETU said that, concerns such as a more liberal system of raising global capital, incubation facilities in our Centres of Excellence, funding for seed capital and growth, and ease of doing business etc.. are needed to be addressed to create lakhs of jobs and hundreds of billion dollars in value.
For SETU to succeed, linkages are required to be created right from the lower level to the apex where the incubated companies are either sold, acquired or do an IPO. At the lower level a large number of incubation centres are required in our Higher Education institutions (HE), institutions like the STPI, involvement of mentors and seed and venture capitalists. These incubation centres further will need funding and support to grow over atleast with a period of 5 years.
The Mission Mode structure is essential for a knowledgeable and accomplished person who can use the networks and knowledge freely in a transparent manner to achieve success. The person will be able to access the networks with two way flow of information both domestically and overseas with the an understanding that the decisions will be without any conflict of interest, based on merit and will be a clear set of policies which are placed in the public domain. SETU will not disburse any funds directly for investment, but do so through Partner Funds that will have independent decision-making based on clear policy.
The setting up of the ATAL Innovation Mission (AIM) was also announced by the Minister in the budget. The ATAL Innovation Mission is named after the former Prime Minister Atal Bihari Vajpayee. It is an innovation platform within the National Institution for Transforming India. The AIM will be an Innovation Promotion Platform involving academics, entrepreneurs and researchers and it will draw upon national and international experiences to foster a culture of innovation, R&D and scientific research in India. The ATAL Innovation Mission will also promote a network of world-class innovation hubs and Grand Challenges for India and a sum of Rs.150 crore has been earmarked for this purpose.
The strategy for AIM is to create a network and institutional mechanism which shall be based on the vision with many stakeholders, where execution and decision making will be driven by the partner institutions, based on merit and best in class teams. The main role of AIM is to define the objectives which will fulfill the vision, create a policy framework, fund institutions for execution, monitor and review progress and ensure success. Multiple institutions will be involved in acting independently so that the decision-making and execution are a widespread ensuring large-scale innovation.
The proposed objectives of the ATAL Innovation Mission are as follows:
- to create an umbrella structure to oversee innovation eco-system of the country;
- to provide platform and collaboration opportunities for different stakeholders in the innovation chain;
- to study and suggest best and novel practices to be adopted by different stakeholders in the innovations chain;
- to provide policy inputs to NITI Aayog and various Government Departments and Organisations
- to create awareness and provide knowledge inputs in creating innovation challenges and funding mechanism to government.
The mission needs speed, flexibility coupled with transparency and open process. Both these programs, thus need a Mission Mode structure with NITI. NITI itself is an innovative initiative intended to break away from the rigidity of past structures to focus on results with speed and quality. NITI should then have space for this Mission to succeed in a flexible structure.