For start-up to flourish, liquidity is need of the hour

For start-up ecosystem to flourish, liquidity is the need of the hour

By Tanuj Choudhry,

India’s economic growth has been sluggish over the last few years and the impact has been concerning. Despite India being the third largest start-up nation in the world, many ideas crumble before they flourish owing to lack of supporting infrastructure, funding, profitability, skill gaps and ecosystem hurdles. Demolishing angel tax and reducing corporate tax were commendable initiatives in reviving start-up sentiments, however, a lot more needs to be done to empower them further. 

From a start-up ecosystem perspective, there is a need to promote priority lending and improve contract enforcement to aid ease of doing business. As per World Bank reports, solving commercial dispute in India takes 1,445 days, which is almost three times more than the average seen by the Organisation for Economic Co-operation and Development. Further, starting or closing a business is still a cumbersome process in our country.

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From the sector perspective, government has introduced many policy level interventions in the past 2-3 years to boost the real estate sector which has a direct impact on the home designing segment. However, revival requires much more effort. There is a need to reconsider the personal tax bracket to give more liquidity to consumers, as well as better benefits under section 80C to encourage investment in real estate and home interiors segment. Furthermore, the Home interiors segment falls under 18% GST slab and we propose the government to consider this segment under 12% GST slab since interiors is no longer a 'good to have' item anymore. This will further increase savings for the end consumers.

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Likewise, paper is crucial for making products like laminates and import duties on paper and other input materials is a concern for the home design and décor segment. To encourage ‘Make-in-India’ adoptation there is a need to contain the cost of getting quality materials from the Indian manufacturers. Until then the import duties should be re-considered. 

The home decor and interiors industry in India is poised to grow and it has moved from being the sole preserve of the rich. The concept of interior designing has made rapid inroads into the booming urban Indian middle class over the last five years. This has also coincided with the share of organized retail in this space doubling from 5% to 10% in the same period. For a $20BN market with an 8% CAGR, this is significant even as these are still early days. This sector has much to do, and a lot to grow.

(The writer is Chief Business Officer, HomeLane)