At a time when developments surrounding Byju's and Paytm Payments Bank have shook the Indian start-up ecosystem, founders of some of the top startups are stressing the need for keeping regulations and compliance as a priority despite a “short-term pain”.
Speaking at the Rising Bharat Summit held in New Delhi on March 20th, Ritesh Agarwal, founder of OYO Rooms said that most startups today are becoming very accountable in terms of governance and compliance, and many are "learning from their pain".
“Today, most of the companies have independent directors, and we are driving our businesses with decisions being made by people who are serious and have driven multiple large businesses historically. More startups are willing to be accountable not just to regulators but also to their own stakeholders..Many are learning from the pains and it will only get better moving forward,” he added.
Talking about fintech regulations, Upasana Taku, cofounder and CFO of Mobikwik, said that governance plays a key role for the long-term sustenance of a business.
“We are in the middle phase of Indian startup revolution, the last 10 years were the build-out phase…We will see some disruptions but it will only help startup founders to understand that for long-term sustenance governance also plays a key role along with growth and innovation,” she said.
Harsh Jain, CEO of Dream Sports - the parent company of fantasy sports major Dream11 who was also part of the panel discussion, said that regulations are for long term and may help remove the bad operators from the system.
“Most of the time regulations will be a short-term pain but as the industry grapples a way of creating an industry that doesn’t stop growth but also allows bad operators be wiped out, there will be growing pains and it will be okay after a stage,” said Jain.
Jain’s words come at a time when India’s gaming industry is undergoing several regulatory changes.
In April 2023, MeitY notified gaming-related amendments to the IT Act 2021, allowing multiple self-regulatory organisations (SROs) to determine whether to permit real-money games to operate in India. The ministry is, however, yet to notify SROs for the sector.
According to reports, the government has now formed a group of ministers (GoM), including Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, IT Minister Ashwini Vaishnaw and Information and broadcasting minister Anurag Thakur, to formulate a comprehensive regulatory framework for the sector.
As companies grow in scale, it will have to become a regulated entity, Jain added.
“There are 40 crore people gaming in India and 400 companies and 100,000 highly-skilled jobs. So the government has stepped in to switch a company from a disruptor to a fully regulated entity and we fully welcome that,” Jain said.
The panel discussion also touched upon the ongoing issue of global tech major Google allegedly charging discriminatory service fees from about 6,000-7,000 homegrown companies, and Google’s recent orders to delist some of the apps for non-complaince.
Virendra Gupta, founder and CEO of DailyHunt, said that there should be rules that gets developed keeping Indian context in mind.
“Our firm belief is that we should have a fair and equal level-playing field for both local and international companies.When you frame a fair law, you need to be aware of the context and ecosystem of India particularly…Indian context is very important and i think, we should not be ashamed of framing rules based on Indian context as we have huge diversity of population, with different levels of income,” Gupta said.
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