Back in 2020, a bright IIT graduate had an idea. No, it wasn’t another biryani delivery app or an “Uber but for cows” pitch. He simply developed an app that could auto-fill your ticket details faster than the IRCTC app. Anyone who has tried booking a tatkal ticket during peak season, knows what a herculean task this is. But instead of acknowledging the efforts of this guy, the Indian Railways sued him. Yes, IRCTC filed a case and he got arrested. Interestingly, Piyush Goyal was in charge of the railway ministry during that time. He could have begun his start-up mission right there, but instead lost the opportunity.

Now in the Startup Mahakumbh Piyush Goyal is forced to scold Indian entrepreneurs for making “only food delivery apps” and converting jobless youth into “cheap labour.”

“Are we going to be just delivery boys and girls?” he asks. No, we would not have needed to be if our labour was not so cheap to begin with. What about fixing labour laws so that no startup or anyone else can exploit our boys and girls – are we even thinking about that? Instead, it is the same cheap labour that we bank upon when we ask global companies to invest in India. “Come here, not because we have skilled labour and excellent business environment, but because our labour is cheap and laws are lax!” 

China was also known for its cheap labour three decades ago, but its determination to change the lives of its people paid off. World Bank data tells us that in 1980, India’s per capita income was $266 while that of China was only $194. But by 2000, things took a turn, and India was at $1357 and China at $4450. In 2022, India’s per capita income was $2388 while China had raced much ahead at $12,720.

Piyush Goyal says our startups should work in deep tech, semiconductors, and AI.

A semiconductor startup-founder explained the problem with this grand plan on Reddit. Writing an open letter to Goyal, he said his startup was eligible for some tax benefits. But Goyal’s department kept his application pending for two years before finally rejected it, saying: “Additional documents required.” A few hours later, a facilitator called him and said, “If you take our help in preparing the documents, you’ll get guaranteed results.”

So there is a space for bribes in our system, but not for working by the rules.

But is there a problem in our startup ecosystem itself? Let us take a look at one of the ‘deep-tech’ sectors, the automobile industry.

Over the years, car prices have only gone up. Yet the cars have not really improved. Did you know that 60% of cars in the country are run on just 10 generic engines? The companies change, the models change, but the engine stays the same. Where did our innovation go?

It is the big companies that are making automobiles. Do they also lack funds that they aren’t doing research? Even today, the same companies make cars as they did 10 years ago. Even today, the affordable models are the same as they were 10 years ago – Maruti Alto, Swift, Tata – just these! No new player has been able to successfully enter this market.

Meanwhile, China has over 200 car manufacturers, making myriad varieties of cars. Ranging from electric cars as cheap as $600 to luxury vehicles that Tesla owners envy. The cheapest EV car in India today is MG’s Comet, starting at Rs 7 lakh. Are car makers just trying to secure their profits and is it that they don’t care about innovation? Imagine if these Chinese cars were allowed to enter our market – who would look at our cars then?

Why is China able to innovate?

In the last decade, while we were busy banning Chinese apps and importing Chinese Diwali lights, China became the factory that made most of the world’s stuff. But it is not a coincidence that the country was able to become more. China’s “Made in China 2025” project launched in 2015 targeted sectors like semiconductors, AI, drones, electric cars, and solar panels. Its idea was to establish China as a leading competitor in these emerging technologies.

Fast forward to 2025, China is a world leader in almost every one of these sectors. They now produce 80% of the world’s solar panels, 75% of lithium-ion batteries, 75% of drones, their own commercial aircraft, and a whole lot of existential guilt for us. Shedding its earlier image of creating cheap knockoffs of any product, China now has multiple original world-class products.

Unlike the much publicised Make in India, the quiet Made in China 2025 actually did what it said.

Also read: What Make in India Has Brought to India

An innovation climate doesn’t build itself – you have to create it. Abhijeet Kumar writes in Business Standard that in 2023, only 5% of Indian startup funding went into deep tech, whereas China invested 35% in deep tech. In 2024, China waived $361 billion in taxes and fees for high-tech firms. They also gave $80.7 billion in research and development deductions. In 2024, China’s total R&D spending was $496 billion. Meanwhile, in India’s 2025 budget, a fund of just $23.45 billion was made for private-sector-driven R&D. Indian startups are already suffering from a funding shortage – and on top of that, there are regulatory concerns. Whereas in China, the state itself backs startups – it even directly invests in many of them.

Public sector: The unsung start-up incubator

To build a good business climate in a country, a lot of work is needed – good education, health, infrastructure, and investments in critical sectors. That’s where our public sector comes in.

You’ve heard of Navratna companies – at one time, these companies used to make everything well, from steel to medicines. They still run schools, hospitals, parks, townships often at a subsidised cost for their employees. 

While we are told PSUs are “inefficient” and must be sold to friends of the regime, they are still keeping the economy alive. In 2024-25, PSUs gave Rs 74,000 crore in dividends. Coal India alone gave over Rs 10,000 crore. Every public sector company has to give 30% of its profits after tax to the government, or 4% of its total net worth as dividend annually. This is a big chunk of government revenue. Still, in recent years, instead of promoting these Navratna companies, the government has been busy promoting its favourite billionaires.

It’s the public sector that lays the foundation of your country. It invests the most in strategic sectors like defence, energy, electricity and infrastructure. Many cities and towns have developed around public sector units. The city of Bengaluru is a great example – today known for its IT, it made its progress via PSUs. As early as the 1950s, 5 PSUs: HAL, ITI, HMT, BEL, BHEL, BEML, set up the foundations of the city. Townships were built around these PSUs, schools were built, and the city grew. It provided employment to lakhs of people directly and indirectly. This is the story of many other cities.

It is thanks to our public sector that ISRO’s Mars Orbiter Mission cost less than the Hollywood movie Gravity.

In China, public sector companies are still going strong. Among the top 10 global Fortune 500 companies, three are Chinese public sector firms. In 2023, 135 Chinese companies were in the Fortune 500 list – 85 of them were from the public sector.

Also read: ‘Instead of Blaming Others Focus on Your Job (Good Governance)’: Startup Founder Slams Piyush Goyal

India’s real startups: Paper leaks and hate influencing

While the world builds semiconductors, we’ve mastered the art of paper leaks. A recent Dainik Bhaskar report revealed a new mafia of paper leak entrepreneurs in Rajasthan. These people have leaked papers for several recruitment exams and got their relatives jobs in various government posts. 86 such relatives, who got jobs fraudulently, have been suspended.

Paper leak industry has flourished like never before in the past decade. From NEET, to UGC NET, to SSC and HSC board exams, paper leaks have marred prominent institutions. This has almost become a massive industry now – providing direct and indirect employment to thousands.

Another fun startup in our country is hate-influencing. Hate-filled songs are created and distributed, provided to enthusiastic dancers outside mosques. On auspicious days of Navratri, Ram Navami, Holi, and Diwali, their business flourishes. This niche business has grown so much that our social media is filled with it. Forget the startup economy – we lead the influencer economy. Seeing this talent, the government itself is giving “Best Influencer” awards. This is our deep tech – we’ve deep-faked the human brain itself. Now, people aren’t bothered by rising petrol or LPG prices, they are more worried about the ‘veg versus non-veg’ debate.

In the Union Budget 2025, spending on education has been increased to Rs 1.28 trillion. But school closures, removal of eggs from mid-day meals, and caste discrimination against Dalit children continues. The focus is still on rote learning and passing exams. Even if AI is introduced as a subject, kids will be asked to memorise neural networks, not build them.

Engineering colleges still produce 15 lakh graduates a year. Only 10% get jobs. The rest become content creators, coaching centre instructors, or election volunteers. That’s our demographic dividend – dancing outside mosques and trending on reels.

If we’re serious about startups we first need to invest in our people – improve their education, health, and provide them decent jobs or at least create a climate of equal opportunity.

Right now, we are too distracted to innovate. And too invested in keeping people distracted. Who needs innovation when you can manufacture public outrage to distract from fuel price hikes?

Kavita Kabeer is a writer and satirist.