Discussion with a Former Civil Servant

An interaction with a retired civil servant reveals concerns about the current enthusiasm for startups in India, drawing parallels with past economic policies like import substitution that failed.

Potential of Tech Startups

• Startups are important for economic growth, but there is apprehension about repeating past policy mistakes.
• India has witnessed a surge in startups, with over 120,000 registered in the past decade, making it the third-largest startup ecosystem globally.
• Institutions like IITs, IIMs, and Atal Incubation Centres are fostering innovation at various levels, including schools.

Challenges for Tech Startups

• Limited domestic market with few early adopters due to a highly price-sensitive population.
• Cultural factors lead to a 'wait and see' approach for adopting new technologies.
• Consumers demand 'value for money,' expecting innovations to be priced affordably.
• High failure rate of startups globally (90%) raises concerns about sustainability.
• Questions about sufficient venture capital and supportive tax policies in India.

Case Study: Unified Payments Interface (UPI)

• UPI's success demonstrates a blend of technology, policy, and socioeconomic strategies.
• Developed by NPCI as a not-for-profit, supported by the Reserve Bank of India and Indian Banks' Association.
• Part of 'India Stack,' including interoperable initiatives like Aadhaar, e-KYC, and DigiLocker.
• The government promoted UPI via mandates, incentives, open API architecture, and zero charges for small transactions.
• Contributed to a significant shift towards digital payments in India.