Start-up Ecosystem In India

[pib] 9 Years of Startup India

PIBSchemes | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Startup India Initiative

Why in the News?

On January 16 (National Startup Day), 2025, India marks 9 successful years of Startup India, a flagship initiative that has revolutionized the entrepreneurial ecosystem in the country.

About the Startup India Initiative

  • Startup India is a flagship initiative launched by the Government of India on January 16, 2016, to create a robust ecosystem for nurturing startups and innovation.
  • It aims to drive economic growth and generate large-scale employment opportunities, with a focus on empowering entrepreneurs through innovation and regulatory support.
  • The PM first announced the initiative on August 15, 2015, during his Independence Day address at Red Fort, New Delhi.
  • The program aims to establish 75+ startup hubs across India and encourages entrepreneurship in Tier-2 and Tier-3 cities.
    • A related scheme, Stand-Up India, was launched on April 5, 2016, to facilitate loans between ₹10 lakh to ₹1 crore for SCs, STs and women entrepreneurs to establish Greenfield enterprises.
  • The program emphasizes the 3 Cs—Capital, Courage, and Connections, which Prime Minister Modi identifies as essential for entrepreneurial success.
  • It seeks to eliminate restrictive policies, including those related to License Raj, foreign investment proposals, and land permissions, ensuring ease of doing business.

Definition of a Startup (as per DPIIT)

  • A startup must be registered as a private limited company, partnership firm, or limited liability partnership (LLP) in India.
  • The entity must not have completed 10 years since its incorporation.
  • Annual turnover should not exceed ₹100 crore in any financial year since incorporation.
  • The startup should focus on innovative products or services and demonstrate scalability, potential for wealth creation, or employment generation.
  • Entities formed through splitting or restructuring of existing businesses are not classified as startups.
  • Startup related terminologies analogously used in India:
    • Unicorn: A startup valued at over $1 billion.
    • Decacorn: A startup valued at over $10 billion.
    • Hectocorn: A startup valued at over $100 billion.
    • Soonicorn: A rapidly growing startup expected to become a unicorn soon.
    • Mincorn: A startup valued at less than $1 billion.

Key Achievements of Startup India

  • India is the third-largest startup hub globally, following the United States and China.
  • DPIIT-recognized startups grew from 500 in 2016 to 1,59,157 by January 2025.
  • Women-led startups accounted for 73,151 entities as of October 2024, with 48% of startups having at least one woman director by December 2023.
  • Startups have generated 16.6 lakh direct jobs from 2016 to October 2024.
  • Over 50% of startups originated from Tier-2 and Tier-3 cities, including emerging hubs like Indore, Jaipur, and Ahmedabad.

Key Government Initiatives for Startups:

  • Startup India Seed Fund Scheme (SISFS), 2021: Provides financial assistance to early-stage startups for proof of concept, prototype development, product trials, market entry, and commercialization.
    • Total allocated amount: ₹945 crore for startups over a four-year period.
  • Credit Guarantee Scheme for Startups (CGSS), 2022: Offers collateral-free loans to startups through Scheduled Commercial Banks, NBFCs, and SEBI-registered AIFs.
    • Covers loans up to ₹10 crore for eligible startups.
  • Fund of Funds for Startups (FFS), 2016: Established with a ₹10,000 crore corpus to provide funding support to startups through SEBI-registered Venture Capital Funds.
    • By 2024, ₹7,980 crore was committed to 99 Alternative Investment Funds (AIFs), benefiting over 800 startups.
  • BHASKAR (Bharat Startup Knowledge Access Registry), 2024: A centralized platform aimed at streamlining interactions within India’s entrepreneurial ecosystem.
    • Fosters innovation, collaboration, and startup growth through knowledge-sharing and networking.
  • Startup Village Entrepreneurship Program (SVEP): A sub-component of the National Rural Livelihood Mission (NRLM), implemented by the Ministry of Rural Development.
    • Supported 3,02,825 enterprises as of 2024, creating 6,26,848 jobs.
  • TIDE 2.0 (Technology Incubation and Development of Entrepreneurs): Focuses on supporting startups in emerging technologies like AI, IoT, and Blockchain.
    • Established 51 incubators and supported 1,235 startups.
  • GENESIS (Gen-Next Support for Innovative Startups), 2024: Aims to boost startups in Tier-II and Tier-III cities.
    • Total outlay: ₹490 crore over five years, targeting over 1,500 startups.
  • Atal Innovation Mission (AIM): Operates under NITI Aayog to foster innovation and entrepreneurship through the establishment of Atal Incubation Centers (AICs).
    • Provides physical infrastructure and mentorship for startups to scale effectively.
  • Startup Mahakumbh: A flagship event organized to bring together startups, unicorns, investors, and industry leaders.
    • First edition in 2019 saw over 500 participants; the fifth edition is scheduled for March 7-8, 2025, in New Delhi.

PYQ:

[2014] What does venture capital mean?

(a) A short-term capital provided to industries

(b) A long-term start-up capital provided to new entrepreneurs

(c) Funds provided to industries at times of incurring losses

(d) Funds provided for replacement and renovation of industries

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