Tharoor controversy: Global Startup Ecosystem Report overlooked budget cuts, stalled K-FON project in Kerala

Thiruvananthapuram: The Global Startup Ecosystem Report, which lawmaker Shashi Tharoor quoted in an article in an English newspaper, has a few findings that are far removed from reality.

The report included several claims that the Kerala government has been repeating. It highlights the government's financial aid as one of the reasons for encouraging startups in the state. The reality, however, has a different tale.

The report said the government had set aside Rs 58.50 crore in the budget for startups to augment technological facilities and investments. However, with the government halving the plan allocation, the earmarked amount was reduced to Rs 20.47 crore — a reduction of Rs 38.03 crore from the original amount. Additionally, the cash-strapped government also dropped the industrial department's various schemes worth Rs 694 crore.

The report also mentioned the government declaring internet access a fundamental right and the K-FON project that promised free internet connections to 20 lakh financially backward families. The report projected the K-FON project as one of Kerala's excellence. However, the K-FON project has been stuck halfway, with only 50,000 of the 20,000 households receiving internet connections.

The report ranked Kerala fourth in Asia for the availability of tech professionals for low salaries. It was pointed out as one of the reasons for a conducive ecosystem. However, questions have been raised about the ecosystem. Many doubt if Kerala has a pro-youth atmosphere if they have to work for a lesser pay.

The report's finding that Kerala has achieved 254 per cent growth in the startup sector between 2021 and 2023, too, has been questioned. It has been argued that the growth was pegged at 254 per cent following comparison with the COVID-19 period when the industrial sector was in deep crisis.

Startup Mission denies providing data

The Kerala Startup Mission has not provided any data for the Global Startup Ecosystem Report. Startup Mission's CEO Anoop Ambika said the publishers themselves had found the information.

"We provide data of companies registered with Startup India. The number of startups increased four-fold compared to the COVID-19 period. It is a fact that their numbers grew four-fold last year from 1,500 in 2021," he said. Kerala has been a top performer for the past four years in the central government's ranking of startups," he added.

Claim to the top slot

Though Kerala has topped in implementing nine reforms directed by the Union government's Department for Industries and Internal Trade (DPIIT), only two were directly linked to industries. The remaining seven were reforms meant to better the living standards of citizens.

However, Kerala could claim that it topped the industrial friendliness index since the reforms aimed at making the country industry-friendly.

While the Ministry of Commerce and Industry evaluated 30 reforms, Kerala came ahead in nine focused on industry and living standards. Of the nine, only two — approval for starting an industry and taxation — were directly related to the industrial sector. The remaining seven are about the living standards of citizens.

Non-industry reforms

Online single-window system

Certificates issued by various corporations and municipalities

Certificates issued by the Department of Revenue

Various permissions given to citizens

Public distribution system in the state

Transport system in the state

Functioning of employment exchanges in the state.