‘No city can compete with Bengaluru on startups’: Finance Minister Nirmala Sitharaman

“Bengaluru has done brilliantly on startups. They are focussing on agricultural innovation, fin-tech, innovation on medical treatments, bio mix, innovation on the various kinds of technology which can be used in AI, the tools that you get out of AI, innovation of drones, aerospace. There’s no way you can bring another one to compete with Bengaluru. I have also seen Hyderabad and Noida getting the startups, but it still is going to take a bit of a while for them to catch up with Bengaluru,” said Sitharaman.

She also cautioned that Bengaluru must be “careful” in the startup race. “Bengaluru has to be careful now. You reach the top but to stay at the top is a struggle. Any small thing like sentimental or other things can disturb that peace. We need to be extra cautious,” said Sitharaman.

The Finance minister also said, “The Bengaluru business community is too decent and quiet. But we (Bengalureans) are all tech-savvy. We go on tweeting about the central government not doing anything, not taking care of Bengaluru. Secondly, we hear Bengalureans saying they are honest tax payers and contribute so much.”

She added, “They (Bengaluru business community) are also very powerful guys. Delhi businesses think they are very close to Delhi, they can come from Noida, they can come from Gurgaon. Bengaluru doesn’t budge from the beautiful city and the cool weather. But they have the power of social media. These guys (business community) are very powerful.”

Responding to allegations of the Centre being unfair to southern states in tax share, the Finance minister said, “I feel sad for the people in those (southern) states. It’s one thing to have concerns voiced, many of which are genuine. There are positives and points of achievement for all states in the south. There are issues because of the weightage that the Finance Commission gives to each one of these factors like education, population, forest cover etc.”

Sitharaman added, “When elected governments of southern states sit with the Finance Commission, they have to highlight and speak about it surely for the Finance Commission to see what kind of a weightage will then help or if the weightages are going to be such that it may not help in certain particular indicators and promote the state’s strengths convincingly; the Finance Commission will come up with a formulation. Central government has no role to play except for obeying the Finance Commission. Even a wickedest Finance Minister cannot tweak the recommendations of the Finance Commission.”

Sitharaman also shed light on the ongoing compliance and other issues impacting the startup ecosystem in India, especially with companies like Paytm, Byjus, Ola, Dream 11 among others. The minister said she has urged regulatory bodies like the Reserve Bank of India (RBI) and startups to convene virtual conferences on a monthly basis to resolve issues and address the challenges before the stakeholders.

“I have had representations coming to me with this regard, particularly the fintech startups who have come to me to explain with what anxiety they made their representation. It was a fantastic conversation and they were very pointed. But the concerns were not emanating from Paytm’s issues. It was more on regular support that they may need for the regulators and the clarifications that they periodically require. But for keeping the compliance business going, they need to have a team which is looking after it and that team needs the support. Otherwise, it stresses out those fellows who are innovating,” said Sitharaman.

She added, “I did tell the RBI that once in a month, on a dedicated day, do a virtual conference with the fintech startups so that they (RBI) can answer the questions and after that, put that as an FAQ so that the others who did not attend can benefit from it.”