India, seventh-largest country by area, the second-most populous country, the most populous democracy, the world’s fifth-largest country in the economy by nominal GDP, the third-largest country by purchasing power parity (PPP), and the third-largest country in the startup ecosystem in the world. India’s start-up ecosystem is now witnessing massive funding. While 2018 has been a great year for startup investments in India. Before 2017, investment into start-ups has increased by over 100% (more than double), from $2.0 Billion to $4.2 Billion in 2018. There were around 3000 startups in 2014 and projection for 2020 are more than 16000+ startups which is a huge number. It is a great time for startups in India; businesses seem to be booming day by day.
Startup India Program:
Startup India Program is a flagship initiative of the Government of India. The primary objective of this initiative is to build a strong eco-system for new startups, to empower new startups, to generate employment opportunities, and for economic growth. Startup India Program was announced by Indian Prime Minister Mr. Narendra Modi on Indian Independence day 15 August 2015 from the Red Fort, New Delhi and it was launched on the 16 January 2016 at Vigyan Bhawan, New Delhi by Prime Minister Narendra Modi. His vision is to transform India into a country of job creators instead of job seekers.
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Benefits of Startup India
- Financial Benefits: – Government of India provides a loan to entrepreneurs on low-interest rate from MUDRA Bank’s scheme (Pradhan Mantri Mudra Yojana). Most of the startups are patent-based. Under this scheme, the government provides 80% rebate on the patent costs also.
- Income Tax Benefits: – Government of India exempts their 3 years income tax post the incorporation year but they can avail it only after getting a certificate from the Inter-Ministerial Board.
- Registration Benefits: – Government of India discards all the restrictions such as License Raj, Land Permissions, Foreign Investment Proposals, Environmental Clearances, etc. A single meeting is sufficient for registration of your startup. Also, there is a help desk window for any doubt.
- Government Tenders: – Earlier it was so difficult to apply for government tenders due to a lot of formalities but under this scheme, the startups get priority in getting government tenders. Also, they are not required to have any prior experience.
- Huge Networking Opportunities: – Government of India conducting two startup fests annually (both at domestic as well as the international level). It is an opportunity to meet various startup stakeholders at a particular place and time. Startup India scheme also provides Intellectual Property awareness workshop and awareness.
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Registration of the Startup can be done only from the following types of companies:
- Partnership Firm
- Limited Liability Partnership Firm
- Private Limited Company
The journey of Startup India
Indian Prime Minister’s vision is, ‘Startup India, Standup India and Make in India.’ He is giving more focus on his vision as his aim to reach 5 trillion economy by 2024. India is a very big market for the world. if we see, a few years back, no one wants to invest in India due to the government policies and India was ranked 100 by the UN Ease of Doing Business Index and had only four states with startup policies. Today after announcing Startup India Program, 24 Indian states have introduced their own policies and India has climbed up to the 77th position in UN’s Ease of Doing Business Ranking. It has also been attracting globally-acclaimed investors, multinationals leveraging Indian tech startups to supplement their technology.
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Here we look at some achievements of the Startup India Program.
- As per LinkedIn, the top 25 startups alone have opened up 18000 jobs in the past year (July 1, 2018, to June 30, 2019)
- 15,113 startups were recognized under the Startup India program across 492 districts in 29 states and six Union territories from 2016 to 2019
- 55% of the recognized startups are from Tier 1 cities, 27% from Tier 2 cities and 18% are from Tier 3 cities
- 13,176 recognized startups have reportedly created 1,48,897 jobs with an average of 11 employees per startup
- 45% recognized startups have at least one or more women directors
- 24 Indian states have introduced a startup policy
- The government made 22 regulatory amendments and approved 1,275 patent rebates in the last three years
- More than 288.16 thousand registered users are there on the Startup India hub
- Startup India Hub has addressed 121.83 thousand queries and facilitated 673 startups
- More than 233.27 thousand has registered under the Startup India Learning Program
- Rajasthan launched Bhamashah Techno Hub, one of the largest incubators in the country
- Kerala launched one of the biggest co-working spaces in India
- Karnataka announced a credit line of ₹ 2,000 Cr ($281 Million) for the startup ecosystem in the state with an aim to have at least 20,000 startups by 2020
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Now the situation changed and the World is looking to India, only India. Today India has 26 unicorns (a private company with a valuation of over $1 billion). Overall, startups have created a value of $130 Billion. To see this kind of growth, foreign investors like Sequoia Capital, SoftBank, Tencent, and Alibaba are bullish on the Indian tech and consumer internet segment. Also, the Indian government’s attempts to build exchange programs with foreign startups in countries like Germany. SAARC nations have also opened new doors of opportunities for the stakeholders in the startup ecosystem. The country has produced a great number of startups that are leading at the global stage. Recent statistics depict that, there are around 39, 200 startups currently active in India. And the numbers are growing by the day.
SoftBank, which is headquartered in Japan, has invested $2 billion into Indian startups. The Japanese firm has pledged to invest $10 billion. Google declared to launch a startup, based on the highest votes in which the top three startups will be allowed to join the next Google Launchpad Week, and the final winner could win an amount of US $100,000 in Google cloud credits. Oracle on 12 February 2016 announced that it will establish nine incubation centers in Bengaluru, Chennai, Gurgaon, Hyderabad, Mumbai, Noida, Pune, Trivandrum, and Vijayawada. Alibaba already entered in the market so overall we can say that the Startup India program will be a milestone of the Indian Economy.
In 2017, Indian Startups rose funding of $13.7 Billion and now in 2019, it is expected to nearly $140 Billion.
Although no doubt, this is one of the best programs of Indian Government but we need to address challenges and concern if we have and try to make a strong ecosystem like Isreal or Silicon Valley so that we can provide a positive environment. If this type of growth will continue, India will be counted as a developed country very soon.