Tech start-ups stressed in the time of Covid-19, but the big guys rake in
Countries
around the world have been announcing economic relief measures to help the
corporate sector tide over the devastating impact the pandemic has had on
business. However, an analysis of government initiatives across the globe shows
that there is hardly any benefit for the tech sector, which some argue has been
less hit relatively.
The
strain is being felt alike in the United States's Silicon Valley and India’s
tech ecosystem, which is largely based in Bengaluru and the National Capital
Region (NCR).
India’s
Rs 1.7 trillion-rupee package leaves out any benefit for tech start-ups, save
for a provision under which the government will contribute towards a company's
share of employee provident fund if it has a staff strength of less than 100,
of which 90 per cent are earning less than Rs 15,000. Most don’t make the cut.
And
in the US, the $377 billion loans (part of a $2-trillion relief plan) allocated
to small businesses that employ less than 500 people, will not reach start-ups
due to an “affiliate rules” clause. The clause says that all companies with
minority investors have to count employees of fellow portfolio companies. This
puts many venture-backed start-ups above the 500-person cut-off.
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