Modi’s Startup India report card: Recognised Startups More than Triple

The Narendra Modi government’s flagship scheme for startups — Startup India launched on January 16, 2016, has crossed 27,000 startup registration mark, according to Startup India. This has more than tripled from 8,939 startups that have registered with Startup India under DPIIT till March 2018, according to data shared by the Ministry of Commerce and Industry earlier with Financial Express Online. Each recognised startup employs an average of 12 people, the government’s citizen engagement platform MyGovIndia tweeted recently. Moreover, the number of recognitions or registrations each day by DPIIT is 26, the government’s investment promotion agency Invest India had tweeted in November.

Under DPIIT, recognised startups are entitled to self-compliance under three environmental and six labour laws, exemption from paying income tax for three consecutive years along with exemption on capital gains and investments above fair market value. It also offers up to 80 per cent rebate in filing patents and winding up within 90 days under Insolvency and Bankruptcy Code, 2016. The Indian startup ecosystem is the third-largest in terms of the number of tech startups following the US and China. The country has 8,900-9,300 tech startups out of which 43 per cent are business-to-business, as per a Nasscom report last year. The total startups in India grew sevenfold from around 7,000 in 2008 to around 50,000 by end-2018, KPMG India had said in a report in February last year.

Despite the available support, startups and investors have asked for ease in taxation and other regulations such as around raising capital, angel tax, setting up a business, valuations, bureaucracy etc. According to a LocalCircles survey on budget 2020 recommendations by startups and small businesses, only 20 per cent responses out of 58,000 responses claimed to benefit from it while 50 per cent said they didn’t see any benefit. 31 per cent believed raising funding/loan as the top challenge in 2020 while 40 per cent claimed facing issue with GST refunds.

MyGovIndia also said 2,804 startups have been registered with GeM (government’s marketplace for government organisations, departments etc to buy goods and services) that have processed 13,666 orders worth Rs 463.5 crore. GeM had also launched Startup Runway programme in February last year for registered startups to sell their products and services. The numbers have grown from 1,528 startups listed selling 12,915 products as on November 19, 2019. Also, in terms of capital support, 279 recognised startups under the Startup India programme have raised a total of Rs Rs 2,669.83 crore through the Rs 10,000-crore Fund of Funds (FFS) scheme set up in SIDBI by the government in 2016, to be deployed over the 14th and 15th Finance Commission cycles. However, these two figures were also shared by the Commerce Minister Piyush Goyal in the Lok Sabha on December 4, 2019.

Source: FE

Image Courtesy: Press Information Bureau