The Startup India Initiative


    In News

    • A research paper from Dublin City University in Ireland, reviewing India’s entrepreneurial policy Startup India, affirmed its positive impact in reducing regional entrepreneurial disparities.

    About Startup India/ Data and Statistics 

    • Startup India was introduced in 2016 as a call to innovators, entrepreneurs, and thinkers of the nation to lead from the front in driving India’s sustainable growth and create large scale employment opportunities.
    • The entrepreneurial portal had more than 65,000 startups registered.
      • Of which, 40 attained the ‘unicorn’ status recently, bringing the total as of date to 90.
    • India is ranked third among global startup ecosystems. 


    What is Necessity-based or subsistence entrepreneurship?

    • It refers to businesses that are run informally and through self-employment
    • A large number of these are set up owing to lack of employment opportunities in the formal sector.

    Issues/ Challenges associated with Startup initiative

    • It cited shortcomings in addressing the under-representation of women and marginalized caste groups in the national startup ecosystem.
      • The under-representation could be due to multiple factors such as caste-based economic exclusion, the urban and rural divide, lack of access to quality education and limited social networks.
    • Quoting from Startup India’s Report (2018), the researchers mention, only four States had dedicated startup policies prior to its launch.
      • After its launch 23 States and 2 Union Territories had formulated a dedicated startup policy.
    • Entrepreneurship continued to be “highly concentrated” in three megacities, namely, Mumbai, Bengaluru and Delhi NCR.
      • The three cities accounted for 93% of all funding raised between 2014 and 2019.
      • India’s venture capital industry is also clustered in and around these three cities.
    • Such concentration can lead to increased economic inequality and hinder emergence of entrepreneurs from industries other than those belonging to the clusters.
    • The policy’s reliance on technology does not take into consideration India’s digital divide, especially with respect to urban and rural areas.
    • SC and ST share in ownership of agricultural establishments including farming, livestock, fishery and forestry were higher in comparison to non-agricultural establishments.
      • They were based majorly in rural areas in comparison to urban areas.
      • Most of them operated without any hired workers, indicating that a significant number of these enterprises were necessity-based undertakings not creating any significant job opportunities.

    Benefits arising out of Startup initiative

    • Networking, training and mentoring facilities provided by Startup India alongside entrepreneurship outreach campaigns in tier-2 and tier-3 cities, helped address regional entrepreneurial disparities in India.
      • The program was aimed at scouting entrepreneurs from these cities and integrating them into the portal.
    • It has facilitated a network between venture capital funds, angel networks, banks, incubators, accelerators, universities, legal partners, consultants and research & development institutions.
    • The initiative helped redirect many State Government policy making in favour of startups.
    • 30% of all States and Union Territories in India have an equal or higher proportionate share in the Dept for Promotion of Industry and Internal Trade (DPIIT) recognised start-up pool in relation to their share in the country’s population.

    Initiatives for Promoting Startups

    • Atmanirbhar Bharat: Digital India Atmanirbhar Bharat App Innovation Challenge.
    • Make in India: Promotion to indigenously made goods and services under the initiative.
    • Start-Up India Programme: A flagship initiative, intended to build a strong eco-system for nurturing innovation and start-ups in the country to drive sustainable economic growth and generate large scale employment opportunities.
    • Start-up India Digital Platform: It is the world’s largest virtual incubator with over 300,000 registered start-ups and aspiring entrepreneurs.
    • Start-up Grand Challenge: It channelizes the entrepreneurial capacity between Indian and Korean start-ups to work together and build solutions for the challenges facing the world.
    • Atal Innovation Mission (AIM): Launched by NITI Aayog as a flagship programme, it aims to promote a culture of innovation and entrepreneurship in India.
      • Some initiatives of AIM are AIM iCREST and Mentors of Change.
    • Project Chunauti: It is a start-up challenge under the Next Generation Incubation Scheme (NGIS) initiative. Selected startups are provided human resources, legal, intellectual property rights (IPR) and Patent matters guidance as well as other incubation and mentorship facilities.
    • National Initiative for Developing and Harnessing Innovations (NIDHI): It is an umbrella programme for nurturing ideas and innovations (knowledge-based and technology-driven) into successful startups.

    Way forward/ Suggestions

    • There is a need for targeted measures to promote technology-and innovation-driven entrepreneurship among SC and ST communities.
    • 10% of the fund in the Fund of Funds operated by Small Industries Development Bank of India (SIDBI) has been reserved for women-led startups.
    • All the Alternate Investment Funds where the SIDBI takes equity have been mandated to contribute 20% in business which are women led, women influenced and women employment or women consumption centric.

    Source: TH