Better times ahead for Gurugram startups, MSMEs

Gurugram: Healthcare, agriculture and infrastructure were the thrust areas of the Union Budget 2018, with Finance Minister Arun Jaitley on Thursday announcing large-scale government spending in these sectors.

Nevertheless, Jaitley affirmed that in new India – where generation of employment, skills and financial growth was crucial – start-ups, micro, small and medium enterprises (MSME) have to play an important role.

Having over 1,500 start-ups, most of which are involved in technology, and around 8,000 MSMEs, Gurugram is an important location for the growth of new India.

In a first of its kind statement, Jaitley called upon investments in new digital technologies, like machine learning, artificial intelligence and data mining, and highlighted how investment in these technologies will enable the government's Startup India initiative. "Most people who view startups from the outside may be delighted that India among the leading countries, after USA and China, in promoting start-ups. But there is a flip side to it; today, most startups are not profitable and facing difficulties.

"Unlike in USA and China, accessibility to Capital in India is still cumbersome. Due to these challenges most startups falter in their operational process and focus less on innovations," said Shobhit Bansal, who runs an educational startup firm in Gurugram.

The garment exports sector, a major contributor to Gurugram's economy, is today facing financial difficulties.

The situation does looks bleak for most garment exporters, with foreign buyers now heading to markets like Bangladesh and South East Asia.

Owners of garment export units highlight that the margin of profits for them in Gurugram have reduced to 40 per cent. Moreover, shortage of skilled labour and rising infrastructural costs compound the losses of smaller garment export units, which are unable to meet the production standards of newer markets.

There are more than 800 garment export units in the city, which employs over 1.5 lakh workers. While the owners of these units welcomed the FM's move to keeping the slab of corporate tax to 25 per cent for companies with Rs 250 crore turnover, they also pointed out that the benefits in terms of profitability and employment generation could only be seen in the future.