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January 16, 2017

Praveen Chakravarty Weighs in on the Issue of Declining Startups in India

Praveen Chakravarty, Senior Fellow at IDFC Institute, weighed in on the reasons behind the trend of declining startup growth in 2016 in an Indian Express article. He said: 

 

"The decline was ironical...Just after the government launched a Startup India initiative on January 2016, investments into startups dropped and therein lies a lesson. To foster a good investment climate, what we need is not a policy for startups but a robust environment for starting a business, ease of capital flows to enter and exit."

 

The article postulates that in the coming year there could be course corrections in terms of valuations and investment. According to Chakravarty, the investment climate for new startups will improve if there are exits. He says:

 

"That can happen only when overall business climate is good. After demonetisation, the stock markets are in a state of fear over uncertainty. This impacts the IPO (initial public offering) markets which will be damp. If IPO markets are damp then exits for investors cannot happen."

 

Read the complete article here.

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