New Delhi: Investment firms have flown into India in a big way and they will continue to come in, said Amitabh Kant, chief executive officer of Niti Aayog on Saturday adding that by 2026 the country will have almost 100,000 start-ups with an investment of $400-500 billion.
“India has seen huge energy, vibrancy and dynamism in its start-up movement. There are some unique innovations that have been done by start-ups. This need to be given further fillip. We have close to about 19,000 start-ups in this country. In 2015 alone, we have seen close to about $8 billion getting invested in start-ups and the total investment in start-ups is about $15 billion. By 2025-26, I visualize from 19,000 we will go up to 100,000 startups. The total investment that will get into the start-ups will be $450-500 billion in India and the reason for that is that a lot of young people are getting into the start-up (space)," said Kant.
He was speaking at ‘Manifest - The Founders Summit’, a two day event co-organised by not-for-profit platform The PRomise Foundation and intellectual property specialist company Event Capital in Delhi.
He also acknowledged the much talked about current slowdown in the investment scenario across the start-up ecosystem, however said that while some investors will reduce their appetite, newer investors will keep investing in the country.
“I don’t think we need to worry ... there will be a period of slowdown. There will be a period, when some investors will say that it is difficult to make money in India. While Softbank or Tiger (Global) may slow down, many more investors are going to come in. It is not a game of valuation but a game of long term business making," he said.
According to an April report by KPMG and CB Insights, venture capital and private equity firms cut investments in Indian start-ups by almost a quarter on a sequential basis in the three months to March, as they starved of exits and fearful of souring bets hold back cash.
Investors infused some $1.15 billion into Indian start-ups in the first quarter of this year, down as much as 24% from the December quarter.
Talking about rise in the number of students to join the startup bandwagon, Kant said that 37% of students of Indian Institute of Technology (IIT) Mumbai who passed out last year, either joined a startup or created a start-up.
Speaking about the much talked about restructuring of the Medical Council of India, he said that the prime minister has given the mandate to Niti Ayog go ahead with the restructuring to make it easy and simple for people to provide better quality and enable larger number of doctors to emerge to in India.
“We are building up a completely new governing structure for the medical sector in India. Similarly we are doing that for the higher education in India where University Grants Commission (UGC) needs a change. Also for the AICTE for technical education side. The first one that we have pushed through is on the medical education side so that we can have outstanding number of professionals emerge," he said.
Talking about improving overall healthcare and education system across the country, Kant said that it is important to improve the quality of services in the country and for that it is important to make states compete with each other.
“We are not able to cater to the vast number of demand in India. We are not able to create world class institutions. The largest amount of outflow of foreign exchange is taking place because of Indians going abroad for education. What we need to do is to create outstanding educational institutions in India so that Indians can study here and do research here," he said adding that the plan is to name and shame the states so that people of that state get to know that their state is not performing.
“Government will have to provide healthcare services specially in rural areas and Tier 2-3 cities. But it is very important to improve the quality of services and to do that we will have to make the states compete. We are drawing up a range of key performance indicators on the basis of which we will evaluate the performance of states and put them up on the public domain. So we have drawn up key parameters in education, health and nutrition and water," he said.
Talking about the overall growth in the country, Kant also said that India is growing at about 7.5% per annum and the challenge was to grow at the rate of 9-10% per annum year after year. And to do that, the country will have to dismantle the age old regimes of control. “Over the last 68 years, we have added a lot of rules, regulations, paper works, acts which we need to scrap and this regime of controls needs to be dismantled for India to grow," said Kant.
Much to the relief of cab aggregators such as Uber and Ola who have run into regulatory hurdles in the country many times, Kant also said that the government must keep itself at an arm’s length from business and allow businesses to flourish.
“Technology will always be ahead of rules and regulations. So the government must always facilitate the creation of the right rules and regulations from business. There is a lot of disruption taking place. Nobody had predicted that there will be an Airbnb or Uber. But this is inevitable, they are disrupting the old age system. Saying that taxis will continue with age old meters is anachronism. You need to keep pace with technological changes," he said.
Mint is a strategic partner of the event.