Congress party is desperate to weave a narrative that the economy has come to a standstill in India. It is (mis)quoting anything and everything to prove their point which often ends up in reminding them of their poor track record apart from proving them as factually wrong. Now they have tried to run down Start Up India scheme which is representing the ambitious and innovative spirit of the young India.
Congress Claim on the Failure of Start Up India
Congress claims that the country has ‘unsustainable eco-system’ for start ups as it quotes the figure of ‘2000 inactive Start Ups’ in Gujarat. This seems to be basis for the Congress to cast aspersion on the whole start up eco-system in India.
So, where did possibly the Congress get the figure from?
A report in Ahmedabad Mirror has said that Registrar of Companies had strike of the names of 1963 companies that were found to carry out no business activities in the two years.
While the Congress chose to pick only the number mentioned in the headline to suit its narrative, the said report itself quotes the officials who offered a logical argument to say that it doesn’t indicate that the start up eco-system itself is failing. Consider these points that are mentioned in the report itself.
- Every year more than 1.5 lakh companies incorporated in Gujarat. Every year 2-3% companies do not do well because of various factors.
- Officials said- In five years the number of companies coming to Gujarat have gone up from 26 lakh to 34 lakhs. In the first quarter of the current financial year, 52% of all the investment returns filed in India are filed in Gujarat.
So, what is it that gives room for Congress to mock Gujarat model and thereby run down the Start Up India scheme on frivolous grounds?
If the administration had not taken the actions on the companies that have failed to do any business in two years, perhaps the same Congress would have cried over this accusing foul-play.
Role of the Government
The role of the government in supporting start ups is to provide an ease of doing business eco-system for the players, which this government did with measures like self-certification process, faster exit opportunity for start ups, credit guarantee fund and tax exemptions. It may also be pertinent to note that it is the UPA government that stifled start ups by introducing angel tax while the NDA government scrapped it.
As a result, the start up scene in India is seeing an unprecedented growth and investment. In 2013, a report by YourStory said that the total investment start ups received was $1.3 billion. Whereas, just the first six months of 2019, a record investment of over $3.9 billion flowed into Indian start ups. Just half year of 2019 saw more investment of more than double that of 2013.
If at all Congress wants to set aside all these facts to argue that some inactive companies are the real representation of a model’s failure, then here is a study to ponder over. A study conducted by examining more than a million firms between 1981 to 2011 arrived at the conclusion that nearly 55% of companies formed in the country perish or become dormant. Considering that the timeline of this study is much to do with the Congress era, should the party specify what model it has rather than mocking others?
Picturing Doomsday of the Economy- Failed Attempts of Congress
Since it is one among many attempts of Congress to somehow present its main narrative that the economy is in doldrums, let’s also revisit their earlier bids in this regard and see what has happened to those claims.
In the earlier instance, Congress latched on to Parle G’s statement on possible job losses. Parle G’s claim itself proved fake as they posted a profit recently, derailing their own slowdown narrative. In any case, our article Parle-G Slowdown Began in the Era of Rahul G Not Modiji had shown how the Congress had no basis of their own in that issue. Congress used automobile sector to further its ‘economy is in danger’ agenda not considering the fact that automobile sector seems to be in a mode of revision globally. There too, it took one Diwali season to prove that India is not really doing bad in terms of automobile sales. Besides, the government has already announced a series of measures to help the automobile sector. Then, Congress latched on to a misleading media report that had claimed that rural consumption is falling. We busted that narrative in our previous article No, Rural Consumption is Not Falling. Don’t Fall for Such Headlines.