By Raghav Hegde
Crowdfunding is a nascent industry in India, which yet to take off due to several reasons. Without a regulatory sanction from the government, the crowdfunding industry does not enjoy legal approval, and hence, more widespread credibility with the investors – both retail and institutional. Equally critical is that India is not a technologically advanced, entrepreneur-driven country, as a result most of the crowdfunding activity is restricted to the financing of films and cultural events. The non-existence of equity based crowdfunding in the country, as most of the crowdfunding in India is rewards based or lending based, is another important reason that crowdfunding as a platform for investment is yet to take off.
Nonetheless, a lot has changed in India over the past one month. The new BJP government has taken over at the center, with Narendra Modi as the Prime Minister. Mr. Modi is well known to be very friendly to businesses and entrepreneurs and was the Chief Minister of the state of Gujarat, which is the most entrepreneur-friendly province in the country for over twelve years previously. This is a big change from the prior administration which ruled over the country, which was distrusted by the entire business, investment and entrepreneurship community, both in India and abroad. So a lot is expected from Mr. Modi’s new government, which seems very serious on improving the investment and business climate in the country.