Open Letters in Response to the Budget

  

As mentioned in my post on the Union Budget FY 2013, I would like to share these 2 Open Letters, addressed to Mr. Finance Minister, in response to the Budget. The reason I picked these two is that they offer very different vantage points; one is from the perspective of a student, and the other is from the perspective of a tech-entrepreneur. Both letters provide good insight on the kind of impact the Budget's proposals would have on everyone, and how this Budget, just like all its predecessors, is not a proactive one.

1. Why I didn’t like the budget: A student’s view of Budget 2012 

Dear Finance Minister,

I hated hearing that long budget speech of yours. Who wants to know if there was an increase in the paddy yield? All I cared about was going to the US, getting a foreign degree and making some money. But do you care?

You are now giving my parents second thoughts about sending me abroad. So what if there’s no service tax on pre-school and high school education? That’s in India. Of course I am not bothered!

You increased the service taxes on all other things from 10 percent to 12 percent. This obviously means my father has to pay more for my GRE tuition and TOEFL tuitions.

For all you know, he might just decide to keep his money in his savings account for it to grow; as you announced that will give him higher income tax exemptions on it and maybe he’ll send me to a college in India. That’s not what I want.

He’s already talking about reducing my pocket money and now you have given him good reason to do that.

The education loan I would take to study abroad won’t come cheap. On top of that, eight years is all I have to repay back the loan. Eight, just eight? Couldn’t you, our finance minister, increase it to 10 years, at least?

Yes, I know you are allocating funds to research centres in India, but I still want to go abroad to study.

You promised to ensure better flow of credit to us, by proposing a Credit Guarantee Fund. But when will that be set up? I want to go abroad the next year as soon as my I am done with high school, but this ‘credit thing’, I am sure, will not be set up so soon. The way India functions it will take another five years. Can you promise you will set it up this year?

You also proposed to set up more schools in rural areas. Ok, I understand development. But what about women’s development? Girl child education and all that? Nothing.

No easy loans even for the girls, while the interest rates will continue to remain at par with the boys.

And even if I forget education abroad for a moment, what about that bike that my father was supposed to give me next month? You’ve made that expensive too. And now that will have to wait too.

Sincerely patient,

A student who did not like your budget

 

2. Mr. FM, why don't you ever think of entrepreneurs?

Dear FM,

I looked you up on Facebook but found a cold 'page'. I checked on Twitter, but came across some fake ids. I searched on Linkedin but you don't seem to be there. I gathered that I can't hang out with you on these internet-mobile places I hang out in, because you probably don't visit them!

Let me come to the point. I read your budget speech with interest (all 14,234 words of it). Amidst your Pacific Ocean of words, I found:

The word 'Startup' mentioned 0 times.

The word 'Internet' mentioned 0 times.

The word 'Mobile' mentioned 2 times.

The word 'Entrepreneur' mentioned 3 times.

Now, the word 'Farm' is mentioned 16 times and the word 'Agriculture' is mentioned 18 times. Sir, let me share with you some interesting trivia. In another country, a couple of years ago, an entrepreneur created a new agricultural community that invited farmers from all over the world.

The address of the farm was the Internet. The place was 'Farmville'. Believe it or not, this Farmville 'thingy' generated `300 crore of revenue in the first year. About 5 crore farmer 'players' signed up! When the Haiti earthquake struck, this community actually garnered money and sent it to Haiti. To cap it all, the company, Zynga (that started this virtual agricultural business), is actually listed on the stock exchanges and is currently worth Rs 5,000+ crore!

Sir, just pause and think if Zynga was created in India. You, sir, would have earned juicy service taxes, revenues from corporate taxes, even would have a nice new age listed company on our otherwise boring bourse. The point I am making, is that new age businesses of the internet and new age entrepreneurs like myself, deserve a bit more attention from you. Because we attract venture capital, we employ people, we generate revenue, we pay our taxes and sometimes, even sell our companies and bring the money home!

Sir, I don't like wearing suits and ties; or coming to meet you in Delhi. But I can request you to help us in a few critical issues, on behalf of the Internet, entrepreneurial community.

Consider These Two Examples:

A month ago, a team of four young entrepreneurs came to meet me. In a couple of minutes, I figured two things about them:

i) They came from families that a decade ago, would have never dreamt that their children would be graduates, speak fluent English and earn more money than their fathers ever did, all at a young age.

ii) This quartet was smart. I mean really smart. Smarter than anyone I had ever met!

This was a goosebumpy moment for me. It signalled that the 'Indian Dream' was working. Despite all our odds, we were producing local 'chaap' Einsteins! These four friends told me that they were quitting their jobs and becoming Internet entrepreneurs. And they presented an idea to me that blew my mind. They wanted me to mentor them, and I readily accepted. I felt it was a 'Googlesque' moment (what may have transpired when Google started up).

A week later, I got an SOS from one of them. They wanted to acquire a web domain (a site name) that was available on a foreign auction site since it was critical to their business. They requested I help them. I readily agreed. What transpired is something I want to bring to your attention.

To buy the domain, I needed to transfer about $1,000 to a German company. They accept only 'PayPal' payments, but PayPal is not available in India. When I wrote to the Germans they were flabbergasted! They said, "PayPal 'is' the global payment platform for small transactions".

But I had to tell them the Indian government had severe restrictions in letting them operate here. I begged them to allow me to wire the money to them. They agreed. When I started the transfer, I realised that it was 'impossible' for a startup to manage the process using the Indian banking processes! I had to sign some 8 forms, get my CFO and his team to 'solve some major paperwork crosswords' and also pay for certification charges.

Finally, I did get the domain, but trust me, on their own, this hot start up would never have made it. The over-regulated and complicated banking laws of India would have killed this 'google' in-the-making even before they started up.

After many years, I was able to woo a senior gaming expert in the US to join me. All he wanted was independence and esops. I gave him independence on day one, but the procedures to carve out esops for a foreign national to be employed by an Indian company became a mystery that would make even Dan Brown's Da Vinci Code look like an amateur essay! It took a good four months to solve the riddle, and I went through hell to keep Mr Gaming Rockstar motivated. He liked me and hung on, but now he is really nervous about India and its laws.

Sir, the number of do's, don'ts, regulations, forms, certifications, validations, permissions, etc that small, startup internet companies require to comply with, kill our energy, excitement and enthusiasm to grow. We need special treatment.

Let me say, that we are like delicate flowers. We need special farming rules to grow. Give us those, and I promise you, when we bloom, your treasury will be full. Not just with revenues but also the scent of a new and fresh Indian Industry!

(The writer is a digital entrepreneur)