India’s startup ecosystem has made significant strides, as evidenced by recent data highlighting the creation of an average of 11 jobs per startup. This is part of a broader narrative of economic growth and job creation catalyzed by the startup sector in the country.
Investments and Job Creation
- Fund of Funds for Startups (FFS) Scheme: This government-backed scheme has committed about Rs. 10,229 crore to 129 Alternative Investment Funds (AIFs). These AIFs have subsequently invested a total of Rs. 17,272 crore in 915 startups. Such a substantial investment showcases the government’s commitment to fostering a nurturing environment for startups.
- Startup India Seed Fund Scheme (SISFS): Under this scheme, a total of Rs. 747 crore has been approved for 192 incubators, indicating strong support for early-stage startups. The incubators have further approved Rs. 291 crore for 1,579 startups, providing crucial financial assistance to fledgling enterprises.
- Job Creation: A striking statistic is the number of jobs created by these startups. Approximately 1.7 lakh jobs were generated by recognized startups in the 2020-2021 period alone. The overall number of jobs reported by startups is 5,49,842, with an average of 11 employees per startup, reflecting the sector’s substantial contribution to employment.
Startup Ecosystem and Policy Framework
- Credit Guarantee Scheme for Startups (CGSS): Operationalized in April 2023, this scheme provides credit guarantees to loans extended by banks and NBFCs to startups, enhancing financial accessibility for entrepreneurs.
- Government e-Marketplace (GeM) and Startup Runway: Over 21,800 DPIIT-recognized startups have been on-boarded on GeM, receiving over 2,43,000 orders totaling Rs. 18,540 crores. The Startup Runway is a fast-track process for onboarding startups on the GeM platform, promoting government procurement from startups.
- Ease of Doing Business and Regulatory Reforms: Efforts to decriminalize over 3,600 compliances and reduce more than 41,000 compliances have significantly improved India’s Ease of Doing Business ranking. This has been further bolstered by the Jan Vishwas (Amendment of Provisions) Bill, 2023, which proposes to decriminalize 183 provisions in 42 Central Acts.
Global Engagement and Sectoral Focus
- Startup20 Engagement Group: As part of India’s G20 Presidency in 2023, this group was institutionalized to support global startup collaboration and create synergies among various stakeholders.
- Sectoral Growth: The sectors leading in registered startups include ‘Food Processing’, ‘Product Development’, ‘Application Development’, ‘IT Consulting’, and ‘Business Support Services’. Notably, 45% of these startups have a woman entrepreneur in their leadership team, a trend that promotes gender diversity in the entrepreneurial space.
Initiatives for Regional Development and Technology Adoption
- One District One Product (ODOP): This initiative identifies unique products in each district to promote regional development and local entrepreneurship.
- Open Network for Digital Commerce (ONDC): A DPIIT initiative to promote open networks for exchange of goods and services over digital networks. In November 2023 alone, ONDC recorded over 6.3 million transactions across more than 600 cities.
- National Single Window System (NSWS): This platform simplifies G2B clearances, offering approvals from various Ministries and States, and has processed over 2,55,000 approvals as of November 2023.
Future Outlook
The Indian startup ecosystem, propelled by these initiatives and investments, is poised for continued growth. The focus on ease of doing business, regulatory reforms, global engagement, and support for regional development augurs well for the future of startups in India. This environment not only fosters innovation and entrepreneurship but also plays a crucial role in job creation and economic development.