As featured in the Economic Times - Sunday - 20th July - 2014

The full transcript appears after the image. Enjoy and please add your views!

We need 10,000 entrepreneurs – not 10,000 crores, Mr. FM!

India’s latest hit, the new Finance Minister, Mr. Arun Jaitley just dropped the “F” bomb!

In his budget speech, he spoke about ‘Funding’ entrepreneurs and casually slipped in - “Promotion of entrepreneurship and start-up Companies remains a challenge. While there have been some efforts to encourage, one principal limitation has been availability of start-up capital by way of equity to be brought in by the promoters. In order to create a conducive eco-system for the venture capital in the MSME sector it is proposed to establish a Rs. 10,000 crore fund to act as a catalyst to attract private Capital by way of providing equity, quasi equity, soft loans and other risk capital for start-up companies.”

Shucks. How badly the FM has fared in understanding the real problem about entrepreneurs. To put it contextually (at least for me), it’s like the FM trying to play Candy Crush and failing at Level 1 itself – implying that he hasn't understood the game at all!

I argue that India needs 10,000 entrepreneurs, not Rs. 10,000 crores to start with!

These are my reasons:

1. Capital chases Entrepreneurs – Entrepreneurs don't chase Capital!

I would like to meet one hundred ‘entrepreneurs’ that qualify for Mr. Jaitley’s funding corpus. Honestly, they don't exist. In the past 5 years, I have been a jury member, spectator and even a mike runner in more than 100 startup events in India; and let me say this with utmost authority – India still lacks the depth and breadth of solid entrepreneurs.

What we have are contest-crazy business plan pitchers; copycats who begin their pitches by saying, “If X is the Y of USA, we will be the same for India”. Then we have a few burnt out mid 40s-50s ‘suit & tie’ types, who want to earn the badge of ‘starting up’ rather than really being an entrepreneur.

So what can the government do? Encourage the rise of entrepreneurs! How? By exposing all the problems and challenges that the government wants to solve in its business; the government operating the biggest business of them all!

Now imagine a ‘portal’ that has 10,000 business problems that the government needs to solve! Examples – How to make a road that lasts in Mumbai? How to reduce immigration lines at airports? How to make people honk less while driving? What music to play in the Delhi Metro? How to make money from public gardens? How to create a search engine to find a particular government official? How to light government buildings up at night, using solar power, etc.

Give me 10,000 hours and I will come up with 10,000 problems the government needs to solve.

Now, if the stated problems genuinely need to be solved by the government, then entrepreneurs will respond to these demands! Funding them is a trivial matter.

2. Clarity not Charity

What does this mumble mean? - “In order to create a conducive eco-system for the venture capital in the MSME sector it is proposed to establish a Rs. 10,000 crore fund to act as a catalyst to attract private Capital by way of providing equity, quasi equity, soft loans and other risk capital for start-up companies.”

Will 1.6 billion dollars suddenly fire up the Indian entrepreneur system? Is the government dreaming? Heck, Flipkart has swallowed up 1 billion dollars just by itself to build one of the many e-commerce sites! So what will 1.6 billion dollars achieve?

And how will this be given out? Which entrepreneur in his right mind wants a ‘soft loan’ from the Government of India when she knows that her chances of succeeding are 1 out of 1000 shots? Who wants ugly ‘notices’ of defaults to land up at their homes when they cannot return the money?

What the government needs to offer is Clarity, not Charity! Please Mr. FM – be clear. Explain what you mean and how you intend to support entrepreneurs. And if you are not clear, then reserve your mumble for another day.

3. Inspiration, not Aspiration!

The government may ‘aspire’ to be the ‘catalyst’ of entrepreneurs, but who cares? What has the government done in the past to prove that it deserves to fund entrepreneurs? Is Air India an example of success? Or Doordarshan? Or MTNL? Or The Indian Railways? Are the balance sheets of our nationalised banks a great financial success story? How many noble laureates do we have working in the government?

Entrepreneurs look for inspiration, not aspiration! A few hours spent with the most iconic VCs in the world transform entrepreneurs and make them think beyond their imagination. VCs who have funded the first rounds of Google, Facebook, Yahoo and the likes, share stories and learnings that entrepreneurs would give anything in the world to have access to! VCs open boardroom doors and have an overflowing chest of money for deserving entrepreneurs.

Can the government even claim to have any of these?

Mr. FM – we don't want you to ‘spray and pray’ with OUR money. If you want to really encourage entrepreneurs in India and get monetary gravity for them, then prove that YOU can be entrepreneurial and set your own house in order.


Then, let’s talk.


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Agree with the general theme of the post. If govt really wants entrepreneurship to flourish - it needs to:

1. Create environment where starting / running a startup is hassle-free. From registration, to tax policies, to raising money.

2. Have basic infrastructure in place. The biggest difference the govt [ atleast for online startups ] help with is to have high-speed inexpensive internet available to masses - both fixed & mobile. That alone would bring massive increase in consumption of services - as well as improve productivity of startups.

From the looks of it, govt seems to be engaging bodies like NASSCOM ( who also initiated 10,000 startups program ), iSprit etc. who have some of the best people in the industry...

Although the govt. doesn't seem to be getting its priorities right & 10K crores could be spent better - i still see this in a positive way. Think of the govt also being like a startup - this is the first step. Hopefully they'll iterate and get product-market fit soon :)

The Karnataka govt seems to be doing a better job - 


BTW .. 10K crore .. I nowhere read it is for 'F' purpose .. is it ? if so ... harm is more .. than usefulness .. 10K crore are "generically" for all efforts required to increase entrepreneurship I guess. Now how it is going to work .. not sure. But efforts are taken in that direction. It indicates that govt has some willingness towards entrepreneurship. And each first step for big reasons need more inputs to get right directions. Hope this article will reach to govt and add more inputs for govt efforts for entrepreneurship

The Govt has no business to be in this business,  they have to stick to getting the environment right for entrepreneurs & their backers to do business. If the ecosystem is right-a lot of things can happen and as somebody has said- we r a land of billion problems- therein lies a billion opportunities. like you said- we have funded them & we never got the right returns, now they want to fund entrepreneurs with our money- At what cost to the society---they wont say. 

My main concerns is - With the Govt/Bureaucracy controlling the strings-   this will be just another sham where corruption & chamchagiri will  drain all that money down the  the bellies of some netas- bhatija & their extended friends & family.

I hope this is not coming from you as an investor... I believe government would demand lesser returns as compared to a normal investor


You just haven't got the FM's message clearly. Surprised that you seem to be equating MSME's with just "me-too" type IT start-ups. Our organization has been actively promoting rural entrepreneurship, with innovations focused on rural problems. There have been mini-dal mills, affordable & innovative food processing products, solutions to problems of rural sanitation, drinking water, mobile veterinary services and so on. We have also mentored several traditional enterprises and nurtured them to healthy businesses. I agree flipkart and their ilk need no money, there are enterprises beyond speculative IT start-ups which need low-cost funding. The FM's has rightly identified (I hope and that is my understanding) This problem area and has taken a small step forward. If nothing I'm happy the govt acknowledges the existence of this problem. 

well, not a rupee will take off from this fund, and if it does, it will not come back! You can enthuse a rally by announcing "mitron dus hajjar crore rupaya", but can't do this with entrepreneurs who already have money chasing if got a good product. Better government removes mindless red tape and sit back!

and I predict one more interesting thing, this 10,000 crore would most certainly be a part of 20,000 crore MUDRA bank, made up for MSME.  As MUDRA is supposed to give 50,000 to 1 Lakh as an investment, your journey with government will be only till prototype! But wait this was not free lunch, it was soft loan, interest dena chalu karo! "But I have just created prototype"; FM: So what, start paying back!


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