Deceptive Label deems Assam as ‘Emerging State’ according to DIPP Rankings 2018
GUWAHATI: The Department of Industrial Policy and Promotion (DIPP) under the Ministry of Commerce and Industry released its States’ Startup Rankings 2018 on December 20 where Assam ranked as an “emerging state.”
While the tag of “emerging state” might sound hopeful, don’t be fooled by its 21st century notion of participatory honour. An emerging state according to the DIPP rankings comes in second to last behind the best performers, top performers, leaders and aspiring leaders.
While a total of 27 states and 3 union territories participated in this exercise, Assam was said to be one of the integral parts of this initiative from the northeastern region, given that it was the only state from the region that didn’t come in last. It received a total score of 31 points out of 38 points in a 7-category ranking conducted by the DIPP.States that performed best include Gujarat, Andhra Pradesh, Chhattisgarh, Bihar, Jharkhand, Karnataka, Kerala, Madhya Pradesh and Rajasthan, all of which got a perfect score of 38.
The ranking system for this exercise was based on 38 action points and categorized into 7 categories or broad pillars consisting of startup policy and implementation, incubation support, seed funding, angel and venture funding, simplification of regulations, easing public procurement and awareness and outreach.
“The startup ecosystem in this region [Assam] has yet to evolve. I think it will take at least 5 years or more for the people of Assam to adapt to the startup culture and invest in it,” said DhrubaJyotiDeka, who launched a startup, Brahmaputra Fables which makes local products from Assam accessible to all worldwide.
While the startup policy in Assam was launched in 2017, the state still has a long way to go. Currently, there are 106 registered startup companies in Assam.
Speaking to G Plus, SwapnanilTalukdar, a start-up expert and social engineer, explained that the reason for Assam being an emerging state is tenfold.
“One thing leads to the other and just like any other major issue, the startup scenario in Assam always gets stuck in a vicious cycle. One of the main reasons why Assam is not quite there with its startup scene as compared to other metro cities or towns is because of lack of education. This lack of education is applicable to both the entrepreneur who wants to start a business and an investor who might make that business viable,” said Talukdar.
He explained that budding entrepreneurs in the state do not exactly understand the concept of startups yet. They are unsure about the difference between a regular business setup and a startup and need to be heavily educated about these differences. On the other hand, investors need to be educated, too.
“The problem here is that the investment opportunities are 1 in 1,00,000, approximately speaking. We need people who can actually invest in good ideas and make it a profitable business. The first thing one needs when starting out is seed money, and if that seed money is not available, it doesn’t matter how good the idea is, because it will never take form and become viable in the market,” said Talukdar.
He further explained that because startups are not able to find resources, and the dedicated departments for loans still do not understand the concept of small businesses, institutions and people are scared to give away money. This in turn causes everyone to suffer in the long run.
However, Talukdar also added that one can’t only blame the banks or government for not providing money or opportunities. The State Bank of India does have a startup loan scheme, but since most entrepreneurs are not able to come up with a viable, full-term financial plan that guarantees returns, the banks hesitate to give out these loans.
“Like I said, it’s a vicious cycle. Another reason why startups fail is, because there is no groundwork that is happening. A lot of youth nowadays are putting up their businesses online with no solid foundation whatsoever. A startup does not mean just a website or a profile on social media platforms,” remarked Talukdar.
He explained that one cannot justify having a startup just because they have a lot of followers on social media. The actual product has to exist and be viable in the market, meaning it has to sell to earn profits to support the business and pay back any loans. A startup has to be a registered entity known to the government to be a legitimate business.
“The government recently is changing in regards to startups and funding. They are trying to provide avenues for budding entrepreneurs to make their mark. A lot of schemes are coming up. However, if the government does not know the entrepreneur exists, how will it help them? There has to be some quantifiable entity that is physically relevant for a business,” said Talukdar.
He then explained that there has to be some expertise and understanding regarding market trends, by both the entrepreneur and the investor. They have to know and understand risk management and take the appropriate risks in investing and making a product relevant in today’s market.
In speaking of the solutions to overcome this slump in the startup industry, Talukdar said that the people of Assam need to work on a number of things.
“First, the gap of academic relevance and real market needs have to be bridged and made clear to budding startup junkies. Then, we have to practice jock shadowing. It is a process where the apprentice learns and observes a skill from the master thoroughly before starting out their own venture,” he said.
Talukdar added that the government also has a part to play in this. Government policies have to be simplified and made known locally so that people can actually avail the benefits it provides.
“If we want to be a successful startup state, we have to educate our youth and motivate them. That is the only way forward,” said Talukdar in his closing remarks.