Start-ups that find solutions to long-term problems in various sectors are leading India from the front in resetting the economy in the post-pandemic world, according to Nirmala Sitharaman, Union Finance Minister.

Delivering the MV Kamath Centenary Memorial Lecture on India and the Post-Pandemic Economic Reset online, organised by the Manipal Academy of Higher Education on Tuesday, she said smaller innovative entrepreneurs who are popularly known under the generic name ‘start-ups’ are leading the way.

“They are not large, complex, integrated, big corporations. You find a lot of self-employed, innovative, enthusiastic entrepreneurs who are coming out with innovative ways of doing business,” she said, adding they are able to keep their team lean and mean and are attracting a lot of funding with which the country is able to find solutions for long-term problems in various sectors, including agriculture, medicine, housing, satellites.

“They are leading India from the front in the reset and also in lifting the economy from where it went down,” she said.

Stating that raising money has never been so alluringly easy, Sitharaman said the highest volume of money has been raised in this calendar year. No longer are banks the only lender for businesses.

Plethora of IPOs

Highlighting the number of IPOs that have come during the year, she said IPOs are clearly indicating that there is money in the market. Reset is happening even in this, she said, adding, people understand what it is to put money in a well-managed company.

The minister said the nature of saving is changing, the nature of investment is changing, the workforce and their approach to work is also changing. The tertiary service sector, which brings in primary and secondary sectors, leads from the front in the name of start-ups. This is a major shaping up of the Indian economy. The reset is this, she said.

On the other areas of reset, she said the informal economy which marked the characteristics of the Indian economy is moving today out of informality and getting into formalisation.

Now the unskilled and semi-skilled labourers are wanting to become more formally engaged with their activities and with their employers, and therefore that is very indicative with the e-SHRAM portal that the government launched post-2020 migrant crisis. Registrations on the e-SHRAM portal very clearly shows that even the informal sector worker today prefers to be on record and also to be formally engaged with. The negotiating terms and the skill upgradation are all getting facilitated because of this formalisation, she said.

On the GST front, Sitharaman said people having small businesses, micro and nano businesses who preferred to be outside of the GST network have also realised that when they come on to the network, they are much better off. Today the movement from being outside of GST to get formally into GST framework has also caught up.

She said the PLI scheme of the government has been a game changer in drawing certain industries coming out of certain geographical territories to countries like India and being part of the domestic and export market.