Karnataka Creates a India’s First ‘Startup Council’ to Boost Entrepreneurship in the State

Karnataka will soon become India’s first state to have a dedicated ‘startup council’, which will look into the matters which startup founders face in their journey. This exclusive startup council is expected to give a boost to entrepreneurship and business in the state.

The Department of Commerce and Industry is now creating a blueprint of the whole structure, and among other tasks, this council will create a policy which provides easy and fast clearances for new businesses, besides having a dedicated set of officials for these matters.

Some other activities which this startup council can work for: Investment by the Govt. for startup infrastructure, creating incubation centers across the state, formulating tax reforms and more.

Additional chief secretary, K Ratna Prabha said, “One round of consultation with industry experts and startups was completed early this month. We have asked officials to prepare a concept note in consultation with the industry, following which we can speak about how everything will shape up,”

Karnataka Govt. has roped in influential business heads for this council, which includes the likes of Kiran Mazumdar-Shaw, chairman and managing director of Biocon Limited, who had attended one of the meetings for deciding the roadmap.

Doing Business In Karnataka Is Not Easy!

Although Bangalore has earned the title of Silicon Valley of India due to the IT and ITeS companies in the city, the business sector in the state hasn’t yet picked up.

Compared to 2,75,895 registered companies in New Delhi and 2,98,611 in Maharashtra, Karnataka has only 80,183 registered companies as of 24^th July, 2015. Even states like Gujarat with 82,113, West Bengal with 1,85,954 and Tamil Nadu with 1,15,981 have more registered companies than Karnataka.

During the month of February, only 444 new companies were registered in the state, compared to 1156 in New Delhi, 987 in Maharashtra and 603 in Uttar Pradesh.

Although Karnataka is ranked 6^th in terms of GDP contribution to the country, it is still behind Gujarat, Maharashtra, Tamil Nadu, West Bengal and Uttar Pradesh.

And when it comes to ecommerce, then we already know the hardships Amazon faced while operating from Bangalore; although the state later provided them respite.

In the recently released ranking of ‘Ease of doing business’ in India, Karnataka was ranked #9 behind states like Chhattisgarh, Jharkhand and Madhya Pradesh.

More Restrictions Via Startup Council?

Although the newly formed Startup Council will aim to provide better environment and conditions for startups and SMEs, it seems that they will also employ some restrictions on them.

For instance, Kiran Mazumdar-Shaw, after coming out from the meeting, informed the media that those startups which are operating from home can be asked to move to a commercial space once they have grown to 10-15 employee team. As per her, such startups can cause problems for the residents.

We hope that the new startup council doesn’t impose more stringent rules and regulations on the startups, but ease them, and make them comfortable to nurture growth.

We will keep you updated as more details come in.