MUMBAI: Raghuram Rajan has been a vocal supporter of startups and entrepreneurship, a view made amply clear in his various interactions ever since he took over as the governor of the Reserve Bank of India (RBI) in 2012.
So it was not surprising when Rajan took time out from his busy schedule in Bhubaneshwar last week to visit the Kalinga Institute of Industrial Technology (KIIT), launched by educationist Prof Achyuta Samanta, which seeks to provide high-quality education for poor children.
KIIT operates on an annual collection of ` 80 crore, comprising almost entirely of funds raised from stakeholders of the institute, its staff, vendors and from in-house sales. Only 10% of the annual collection comes from donations.
Speaking to HT about his interaction with Rajan, Samant recounted the RBI governor’s words: “I am amazed with the kind of financial model that you have built to provide education to the needy. It would be good to see more people participating in such kind of service.”
Later, while addressing the 4th Odisha Knowledge Hub, Rajan spoke about the growth in Indian entrepreneurship, which was linked to service. “India has come a long way in encouraging free enterprise — from tiny shops to large internet startups, the spirit of entrepreneurship is alive. Doing business is now more reputable than just a few decades ago, as is getting rich,” he told the gathering. “Graduates want to start businesses or work for startups, rather than join an established consultancy or a bank. What was now needed was to continue improving the environment so that everyone has a better chance.” The governor said it was necessary to broaden access to capabilities by providing decent education and health to individuals. “Aam aadmi attaches no value to free enterprise if he cannot participate by getting a job or starting a firm.”
With over 5,000 registered startups, India is one of the fastest-growing market for such firms, and is ranked the third largest globally, with a total funding of $5 billion in 2015, according to PC Tablet.
The governor also focussed on how far India has come in building a startup environment, but said there was still some way to go. Along with the three historical conditions needed for free enterprise — levelplaying field with easy entry and exit, access to input and output markets and protection of property rights — the governor added two more conditions. These include broadening access to capabilities and a basic safety net.