Startups and
Innovation Ecosystem are Engines of Growth for any Country
Startups and the entire innovation ecosystem are
the engines of growth for any country, the
Minister of State in the Ministry of Commerce and Industry, Som
Parkash said in reply to a parliamentary question on 15 March, 2023. Recognizing this aspect, the Government
launched Startup India initiative on 16th January 2016
with an aim to build a stronger ecosystem for nurturing India’s startup culture that would further drive our economic growth,
support entrepreneurship, and enable large-scale employment opportunities.
Sustained Government efforts in
this direction have resulted in increasing the number of recognised startups from 442 in 2016 to 92,683 in 2023 (as on 28th
February 2023).
Startups, have actively contributed in Government’s
flagship programs such as Atal Mission for Rejuvenation and Urban Transformation
(AMRUT), Smart Cities Mission, Swachh Bharat Mission, National Heritage City Development
and Augmentation Yojana (HRIDAY scheme) to improve urban infrastructure and service
provision.
Furthermore, DPIIT has recognised startups which are spread across 56 diversified sectors. More
than 15% of these startups are in sectors such as Agriculture,
Healthcare & Lifesciences, Automotive, Telecommunication & Networking, Computer
Vision, etc. Over 7,000 recognised startups are in sectors
like Construction, House-hold Services, Logistics, Real Estate and Transportation
and Storage contributing towards urban concerns. Sector-wise number of startups recognised is as follows:
Sector wise number of recognized Startups as on 28th February 2023
|
S.
No. |
Industries |
No.
of Recognised startups |
|
1 |
Advertising |
673 |
|
2 |
Aeronautics
Aerospace & Defence |
910 |
|
3 |
Agriculture |
4653 |
|
4 |
AI |
1580 |
|
5 |
Airport
Operations |
10 |
|
6 |
Analytics |
640 |
|
7 |
Animation |
93 |
|
8 |
AR
VR (Augmented + Virtual Reality) |
485 |
|
9 |
Architecture
Interior Design |
517 |
|
10 |
Art
& Photography |
321 |
|
11 |
Automotive |
1950 |
|
12 |
Biotechnology |
260 |
|
13 |
Chemicals |
813 |
|
14 |
Computer
Vision |
223 |
|
15 |
Construction |
3873 |
|
16 |
Dating
Matrimonial |
81 |
|
17 |
Design |
629 |
|
18 |
Education |
5962 |
|
19 |
Enterprise
Software |
1696 |
|
20 |
Events |
365 |
|
21 |
Fashion |
1279 |
|
22 |
Finance
Technology |
2930 |
|
23 |
Food
& Beverages |
4523 |
|
24 |
Green
Technology |
2046 |
|
25 |
Healthcare
& Lifesciences |
8691 |
|
26 |
House-Hold
Services |
633 |
|
27 |
Human
Resources |
1979 |
|
28 |
Indic
Language Startups |
269 |
|
29 |
Internet
of Things |
1428 |
|
30 |
IT
Services |
11099 |
|
31 |
Logistics |
412 |
|
32 |
Marketing |
1837 |
|
33 |
Media
& Entertainment |
1426 |
|
34 |
Nanotechnology |
145 |
|
35 |
Non-
Renewable Energy |
1639 |
|
36 |
Other
Specialty Retailers |
623 |
|
37 |
Passenger
Experience |
11 |
|
38 |
Pets
& Animals |
244 |
|
39 |
Professional
& Commercial Services |
4506 |
|
40 |
Real
Estate |
810 |
|
41 |
Renewable
Energy |
2429 |
|
42 |
Retail |
2160 |
|
43 |
Robotics |
491 |
|
44 |
Safety |
292 |
|
45 |
Security
Solutions |
972 |
|
46 |
Social
Impact |
576 |
|
47 |
Social
Network |
659 |
|
48 |
Sports |
453 |
|
49 |
Technology
Hardware |
2934 |
|
50 |
Telecommunication
& Networking |
880 |
|
51 |
Textiles
& Apparel |
1362 |
|
52 |
Toys
and Games |
215 |
|
53 |
Transportation
& Storage |
1456 |
|
54 |
Travel
& Tourism |
1436 |
|
55 |
Waste
Management |
593 |
|
56 |
Not
Specified |
3511 |
|
|
Grand
Total |
92,683 |
Under the Startup
India initiative, the Government constantly undertakes various efforts for the development
and growth of startup ecosystem across the country.
The flagship Schemes namely, Fund of Funds
for Startups (FFS), Startup
India Seed Fund Scheme (SISFS) and Credit Guarantee Scheme for Startups (CGSS) are supporting startups
at various stages of their business cycle to enable startups
to graduate to a level where they will be able to raise investments from angel investors
or venture capitalists or seek loans from commercial banks or financial institutions.
The Government also implements flagship annual exercises and programs including
States’ Startup Ranking, National Startup
Awards and Innovation Week which play an important role in holistic development
of the startup ecosystem. The Government through stakeholder
consultations seeks regulatory and policy related recommendations for enhancing
ease of doing business and reducing compliance burden for startup
ecosystem. The Government also facilitates participation and engagement of Indian
startup ecosystem at international platforms. Details
of such programs implemented under Startup India initiative
by the Government to support startup ecosystem across
the country are placed as follows:
Programs Implemented under Startup India initiative
The details of various programs undertaken
by the Government to promote startups under Startup India initiative across the country are as under:
·
Startup India Action Plan: An Action Plan for Startup India was unveiled on 16th January 2016.
The Action Plan comprises of 19 action items spanning across areas such as “Simplification
and handholding”, “Funding support and incentives” and “Industry-academia partnership
and incubation”. The Action Plan laid the foundation of Government support, schemes
and incentives envisaged to create a vibrant startup ecosystem
in the country.
·
Fund
of Funds for Startups (FFS) Scheme: The Government has established FFS with
corpus of Rs. 10,000 crore, to meet the funding needs of
startups. DPIIT is the monitoring agency and Small Industries
Development Bank of India (SIDBI) is the operating agency for FFS. The total corpus
of Rs. 10,000 crore is envisaged to be provided over the 14th and 15th Finance Commission
cycles based on progress of the scheme and availability of funds. It has not only
made capital available for startups at early stage, seed
stage and growth stage but also played a catalytic role in terms of facilitating
raising of domestic capital, reducing dependence on foreign capital and encouraging
home grown and new venture capital funds.
·
Credit
Guarantee Scheme for Startups (CGSS): The Government has established the Credit
Guarantee Scheme for Startups for providing credit guarantees
to loans extended to DPIIT recognized startups by Scheduled
Commercial Banks, Non-Banking Financial Companies (NBFCs) and Venture Debt Funds
(VDFs) under SEBI registered Alternative Investment Funds. CGSS is aimed at providing
credit guarantee up to a specified limit against loans extended by Member Institutions
(MIs) to finance eligible borrowers viz. DPIIT recognised startups.
·
Regulatory
Reforms:
Over 50 regulatory reforms have been undertaken by the Government since 2016 to
enhance ease of doing business, ease of raising capital and reduce compliance burden
for the startup ecosystem.
·
Ease
of Procurement:
To enable ease of procurement, Central Ministries/ Departments are directed to relax
conditions of prior turnover and prior experience in public procurement for all
DPIIT recognised startups subject to meeting quality and
technical specifications. Further, Government e-Marketplace (GeM) Startup Runway has been developed
which is a dedicated corner for startups to sell products
and services directly to the Government.
·
Support
for Intellectual Property Protection:
Startups are eligible for fast-tracked patent application
examination and disposal. The Government launched Start-ups Intellectual Property
Protection (SIPP) which facilitates the startups to file
applications for patents, designs and trademarks through registered facilitators
in appropriate IP offices by paying only the statutory fees. Facilitators under
this Scheme are responsible for providing general advisory on different IPRs, and
information on protecting and promoting IPRs in other countries. The Government
bears the entire fees of the facilitators for any number of patents, trademark or
designs, and startups only bear the cost of the statutory
fees payable. Startups are provided with an 80% rebate
in filing of patents and 50% rebate in filling of trademark vis-a-vis other companies.
·
Self-Certification
under Labour and Environmental laws:
Startups are allowed to self-certify their compliance
under 9 Labour and 3 Environment laws for a period of 3 to 5 years from the date
of incorporation.
·
Income
Tax Exemption for 3 years:
Startups incorporated on or after 1st April 2016 can apply
for income tax exemption. The recognized startups that
are granted an Inter-Ministerial Board Certificate are exempted from income-tax
for a period of 3 consecutive years out of 10 years since incorporation.
·
International
Market Access to Indian Startups: One of the key objectives under the
Startup India initiative is to help connect Indian startup ecosystem to global startup
ecosystems through various engagement models. This has been done though international
Government to Government partnerships, participation in international forums and
hosting of global events. Startup India has launched bridges
with over 15 countries (Brazil, Sweden, Russia, Portugal, UK, Finland, Netherlands,
Singapore, Israel, Japan, South Korea, Canada, Croatia, Qatar and UAE) that provides
a soft-landing platform for startups from the partner
nations and aid in promoting cross collaboration.
·
Faster
Exit for Startups: The Government has notified Startups as ‘fast track firms’ enabling them to wind up operations
within 90 days vis-a-vis 180 days for other companies.
·
Startup India Hub: The Government launched a Startup India Online Hub on 19th June 2017 which
is one of its kind online platform for all stakeholders
of the entrepreneurial ecosystem in India to discover, connect and engage with each
other. The Online Hub hosts Startups, Investors, Funds,
Mentors, Academic Institutions, Incubators, Accelerators, Corporates, Government
Bodies and more.
·
Exemption
for the Purpose Of Clause (VII)(b) of Sub-section (2) of Section 56 of the Act (2019):
A DPIIT recognized startup is eligible for exemption from
the provisions of section 56(2)(viib)
of the Income Tax Act.
·
Startup India Showcase: Startup India
Showcase is an online discovery platform for the most promising startups of the country chosen through various programs for
startups exhibited in a form of virtual profiles. The
startups showcased on the platform have distinctly emerged
as the best in their fields. These innovations span across various cutting-edge
sectors such as Fintech, EntrepriseTech, Social Impact,
HealthTech, EdTech, among others. These startups are solving critical problems and have shown exceptional
innovation in their respective sectors. Ecosystem stakeholders have nurtured and
supported these startups, thereby validating their presence
on this platform.
·
National
Startup Advisory Council: The Government in January 2020 notified
constitution of the National Startup Advisory Council
to advise the Government on measures needed to build a strong ecosystem for nurturing
innovation and startups in the country to drive sustainable
economic growth and generate large scale employment opportunities. Besides the ex-officio
members, the council has a number of non-official members, representing various
stakeholders from the startup ecosystem.
·
Startup India: The Way Ahead: Startup India:
The Way Ahead at 5 years celebration of Startup India
was unveiled on 16th January 2021 which includes actionable plans for
promotion of ease of doing business for startups, greater
role of technology in executing various reforms, building capacities of stakeholders
and enabling a digital Aatmanirbhar Bharat.
·
Startup India Seed Fund Scheme (SISFS): Easy availability of capital is essential
for entrepreneurs at the early stages of growth of an enterprise. The capital required
at this stage often presents a make-or-break situation for startups
with good business ideas. The Scheme aims to provide financial assistance to startups for proof of concept, prototype development, product
trials, market entry and commercialization. Rs. 945 crore
has been sanctioned under the SISFS Scheme for period of 4 years starting from 2021-22.
·
National
Startup Awards (NSA): National Startup
Awards is an initiative to recognize and reward outstanding startups
and ecosystem enablers that are building innovative products or solutions and scalable
enterprises, with high potential of employment generation or wealth creation, demonstrating
measurable social impact. Handholding support is provided to all the finalists across
various tracks viz. Investor Connect, Mentorship, Corporate Connect, Govt. Connect,
International Market Access, Regulatory Support, Startup
Champions on Doordarshan and Startup
India Showcase, etc.
·
States’
Startup Ranking Framework (SRF): States’ Startup
Ranking Framework is a unique initiative to harness strength of competitive federalism
and create a flourishing startup ecosystem in the country.
The major objectives of the ranking exercise are facilitating states to identify,
learn and replace good practices, highlighting the policy intervention by states
for promoting startup ecosystem and fostering competitiveness
among states.
·
Startup Champions on Doordarshan: Startup Champions
program on Doordarshan is a one-hour weekly program covering
stories of award winning/ nationally recognised startups.
It is telecasted in both Hindi and English across Doordarshan
network channels.
·
Startup India Innovation Week: The Government organises Startup India Innovation week around the National Startup Day i.e. 16th January,
with the primary goal was to bring together the country's key startups, entrepreneurs, investors, incubators, funding entities,
banks, policymakers, and other national/international stakeholders to celebrate
entrepreneurship and promote innovation.