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Job creation will drive next phase of reforms

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On the 25th anniversary of India’s economic reforms, a general consensus seems to have emerged within the country and without that the next phase reforms must address what has so far eluded agreement among the principal stakeholders: land and labour. Make in India will not happen if these two main factors of production remain entangled in political one-upmanship.

The government has made some overtures in the domain of land reforms, but the issues surrounding it have not yet fully crystallized. Unless there is clarity and consensus around land reforms, including land acquisition for implementing government’s industrialization and infrastructure development projects, the vision of converting India into a global manufacturing hub will remain unrealized. It is essential to pursue efforts towards a comprehensive land reforms policy relentlessly to bring the matter to a satisfactory conclusion.

In the field of labour, the exercise for rationalization and consolidation of labour laws undertaken by the government in the last two years has suddenly taken a breather. Despite earlier attempts to push the agenda forward, the feeling that the main stakeholders were not taken fully on board has provoked angry reactions among the major trade unions, which have threatened a nationwide strike in September. Recognizing the possible implications of unilateral action, the Prime Minister has reportedly decided to proceed more cautiously in future by taking the workers’ representatives into confidence.

Industry lobby FICCI had set up a special tripartite group to consult the stakeholders and make suitable recommendations for the government’s consideration. As convener of the special group, I held extensive consultations and submitted my report making a host of recommendations. Among other things, I advocated gradualism and proposed an incremental approach to labour law reforms in place of the wholesale reforms that were being attempted.

There really is no alternative to dialogue, compromise and consensus in the realm of social re-engineering. The efforts may appear tardy and frustrating at times, but sustainable results can be achieved only if we are able to hone the strategy of tactical retreat with a view to eventually finding the winning formula that will be acceptable to all.

The rolling back of government’s publicly announced EPF policies earlier this year is a case in point. The massive street protests in Paris in April and May 2016 against the French government’s labour reforms that were perceived as pro-capitalist portend social unrest that may become intractable if such sensitive matters are not handled with understanding and empathy.

The fact that recent amendments to the Child Labour (Prohibition & Regulation) Act encountered widespread criticism from academia, social activists, international organizations like Unicef and others exposes the absence of broad-based dialogue and consensus building that is the cornerstone of progressive and sustainable labour reforms architecture.

Despite all the wishful rhetoric over the last two years of the present government, it is now common knowledge that enough jobs — especially decent quality jobs — are not getting created in the economy, particularly in the organized manufacturing sector. The government would do well to ensure that the frustrations of youth poised to enter the job market are effectively contained. Towards this end, the recent announcement about massive injection of funds for skilling and re-skilling potential job seekers is most opportune.

The concerned department and agencies of the government must quickly respond by setting up capacity and infrastructure to absorb the funds and put them to best advantage. The youth are impatient and care must be taken to ensure that the burning embers are not allowed to be stoked by “indosceptics” who have a problem for every solution.

Clearly, job creation is the single most important direction to follow in the next phase of reforms. If adequate numbers of jobs are available in the marketplace, the resistance to labour reforms on the part of the traditional trade union movement will surely mellow.

Meanwhile, the government should re-establish confidence and trust among employers’ and workers’ representatives by organizing impartial and meaningful tripartite consultations on labour reform proposals that are doable. There is no point in biting off more than you can chew. The priorities and pace of reforms must be carefully calibrated so that the achievements can endure in the long run.

The government has three more years to go in its first term. There is sufficient time to readjust the trajectory so that results start showing before it must inevitably return to the hustings. Alarm bells are not ringing just yet, but a gentle reminder is not out of order.

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20 Indian start-ups selected for business expansion to London

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Bengaluru, May 18: Twenty Indian start-ups have been chosen to join London Mayor Sadiq Khan’s India Emerging 20 (IE20) business programme which aims to help selected companies in setting up or expanding their business in Britain’s capital.

The India Emerging 20 programme which is in its third edition this year was launched by London and Partners, which is the Mayor of London’s official promotional agency, in collaboration with BDO, a major accounting and taxation network, and Lalit Hotels.

It was set up with the aim to identify some of India’s most ambitious companies that are considering international expansion.

The 20 winners of 2018 were chosen from over 300 applications from some of India’s leading business hubs such as Mumbai, Bengaluru and New Delhi, London and Partners said in a statement on Friday.

The winners will have the opportunity to benefit from discounted rates on a London office and tailored expert advice on marketing, access to finance and local market analysis, it added.

“London is a truly global business centre and presents lots of opportunities for Indian companies looking to expand their business overseas,” said Khan.

“I am delighted that my India Emerging 20 programme is helping some of India’s fastest growing companies with their international growth and London remains open to investment, talent and collaborations with India,” he added.

Among the winners selected for this year’s programme are Hug Innovations of Hyderabad and Mumbai’s Furtados School of Music.

Hug Innovations is a wearable tech company developing IoT platforms that allows users to complete tasks including controlling apps, electronics, VR headsets, toys and home automation using just hand gestures.

Furtados School of Music (FSM) is a music education firm with a vision to provide accessible quality music education to all. The company is currently testing a mobile application to bring together people interested in learning music and music teachers.

The other winners are Appnomic Systems, BiOZEEN, BlackPepper Technologies, Chai Point (Mountain Trail Foods), Happay, Intello Labs, Ittisa Digital Media Services, Senseforth, Chakr Innovation, Dineout/inResto, Fork Media, Lucideus Tech, Morph.ai, Videonetics Technology, Wigzo Technologies, Gaia Smart Cities, Iksula Services and SaffronStays.

In April, India and Britain announced a UK-India Tech Partnership to identify and pair businesses, venture capital, universities and others to provide access routes to markets for British and Indian entrepreneurs and small and medium enterprises.

“IE20 is an important element of the UK-India Technology-Partnership which was agreed by our two Prime Ministers in April and formally launched in India last week by Digital and Culture Secretary, Matt Hancock,” said Dominic McAllister, British Deputy High Commissioner in Bengaluru.

“The UK and India are global leaders in technology and two of the world’s most innovative countries. The new UK-India Tech Partnership will be testimony to that. A pilot soon to be launched In Karnataka will focus on augmented and virtual reality, advanced materials and artificial intelligence — technologies which a number of our winners today are already deploying,” McAllister added.

IANS

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Debt funding: Addressing mismatch in expectations between yourself and lenders

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New Delhi, April 13: Scaling up a business is hard work. While launching a start-up and raising initial seed capital is tough, things get more complex once you are past the proof-of-concept stage and are set to scale. The funds to start a business are almost always equity capital, but a business looking to grow is also looking to choose between debt and equity.

For most entrepreneurs, this is their first time dealing with a lender and it can get confusing. Here are the top five questions start-up founders have as they set out to look for their first loan.

* Why should I take a loan? 

Because it’s cheaper. Equity capital is dilutive, which means that investors get a share in all your future profits and future valuation growth and expect to make multi-fold returns if things go well.

A loan, on the other hand, has a fixed interest rate and thus will always be cheaper than equity. So whether you take a 12 per cent bank loan or an 18 per cent unsecured business loan, that’s the final cost of the loan to you.

* What kind of loan can I get?

Start-ups usually take loans for working capital. As the business expands, precious cash gets stuck in inventory and receivables. The three most common forms of working capital debt are:

Unsecured Business Loan: This is what lenders call a term loan in which you get a certain amount of loan. Just like a home loan, you pay a monthly EMI.

Invoice Discounting: Receivables are likely your biggest cash drain. In invoice discounting, the lender pays you as soon as you raise the invoice. When your customer pays 30-60 days later, the lender takes his money back. At this point, you have more invoices to discount and hence the cycle continues. This is useful for B2B start-ups.

Cash credit limits and overdrafts: Offered by banks as a line of credit so you can use the loan whenever you need. Typically for businesses that are a few years old and can potentially offer a collateral security.

* When can I get a loan?

Lenders vary in their perception of how soon a start-up can get a loan. But irrespective of which lender you go to, you need to have some cash flows. Remember that the loan has to be repaid, with interest, on time — so the more visibility you have on your future cash flows, the easier it is for you to get a loan. At least six months post-revenue is a good benchmark.

* How much loan can I get?

It depends on your working capital cycle, especially when you are looking at invoice discounting or other cash flow-backed loans. We have found that 1-2 months of current revenue run rate is a good benchmark for most start-ups.

* What do I need to do?

Lending needs paper since lenders won’t spend months with you like equity investors. They need to analyse documents to build trust in your business and your ability to repay the loan. Lenders are only looking for documents you have easy access to; financials, tax returns and bank statements.

Also, whether or not you are planning to take a new loan today, keep your credit history clean. Every lender does a credit check on both the company and the founders. With the credit report in shape and armed with documents that show cash flows your business can make, you will be all set to get your first business loan.

By Simmi Sareen

(Simmi Sareen is CEO and Founder of Loans4SME. The views expressed are personal)

IANS

 

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Microsoft ‘ScaleUp’ announces 12th start-up cohort in India

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Bengaluru, April 5: Microsoft “ScaleUp” on Thursday announced the 12th cohort consisting 12 start-ups for its programme to empower them with technology, go-to-market, and community benefits.

ScaleUp (known previously as Microsoft Accelerator) focuses on late-stage B2B start-ups and helps them accelerate their business growth through mentorship, streamlined go-to-market (GTM) activities and access to world-class technology.

The 12 start-ups in the cohort are AppICE, Appiyo Technologies’ Twixor, Avanseus Technologies, eGovernments Foundation, Gaia Smart Cities Solution, GrowthEnabler, Karo Sambhav, Kogence, MachineSense, SmartVizX, Sprinkle Data and Xurmo Technologies.

The selected start-ups are focused on areas of Artificial Intelligence (AI), Virtual Reality (VR), Big Data Analytics, among others, to build solutions for the market.

During the six-month programme, these start-ups would work closely with Microsoft leaders, industry experts and leverage the Microsoft Partner Network to scale their business models and serve enterprise clients.

The start-ups would get access to Microsoft’s expertise, infrastructure and Azure Cloud platform to build a strong technology backbone for their business.

Microsoft currently caters to over 5,000 tech start-ups and more than 200,000 large and small-and-medium businesses in India.

IANS

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