startup india

Is ‘Startup India’ Boosting Entrepreneurship?

‘Startup India’ initiated by the Government of India, was announced by Prime Minister, Narendra Modi on 15 August 2015.  The program was rolled with an objective of:

– Supporting entrepreneurs
– Building a strong startup ecosystem, and
– Translating India into a country of job creators not job seekers

There have been a bunch of policy reforms and government collaborations to promote and sustain startups in India. Primarily the plan aims at promoting financing for startups.  This entrepreneurship campaign was received well not just across the domains but also around the country’s geographies and economic status.

Today India has more startups and entrepreneurs than it ever had, making it obvious that revolution has already been set alight. Startups however still face a lot of challenges to reach full potential as there is limited guidance and access. The government is aiming at improving the ease of doing business by enabling an environment for them.

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Startups are Redefining India’s Growth

The open economic environment is in favor of entrepreneurialism but India is at a very incumbent stage of being a startup economy. There is a need to reach their full maturity and many startups die in the early stage of their operations themselves. Yet India has grown significantly in this arena and startups have their effect on the economy. The new company registrations have increased from 15,000 in the 1980s to 100,000 in 2010.

The startup companies are beginning to spread the benefits deeply into regional economies and are also creating new markets and business models. These young companies have threatened to disrupt the already recognized businesses. This seems to be a path-breaking catalyst in innovation and collaboration in the Indian markets. This is an undistorted track and the fact is evident from the reports that the Indian venture capital industry invested $10 billion in 2019. This figure is 55% higher than the total investment in 2018.

The new blood in businesses dived in slow but is steady. They entered every possible avenue from IT/ ITES to E-commerce, hyper delivery networks to B2B model, and more. There is a big hand of startup companies portraying India as being the IT, services, and BPO hub to be one R&D center for MNCs.Today India has 30 Unicorns and four new entrants in the year 2020.

The Startup program will see further boosts with current campaigns like Stand up India, Digital India, and Vocal for Local.  There have been some interesting developments by the Government of India to solve existing challenges faced by startups in sectors like healthcare, rural digitization, education, etc.

Startup India Program Framing a Conducive Ecosystem for Entrepreneurship

The Startup India campaign introduced Funds worth INR 10,000 Cr into this project. The government thinks tank NITI Aayog launched the Atal Innovation Mission. The main aim was to foster confidence among upcoming entrepreneurs. 5,441 Atal Tinkering Labs were set up. In 2018, the government allocated $480 Million for new-age technologies.

The startups were defined and redefined by fast-tracking startup patent applications, income tax exemption, and self-certification. Startup India Hub was introduced to facilitate activities between various stakeholders. Venture capitalist investments saw some rise in funding in 2018 indicating the positive mood of investors. This shows how the Indian entrepreneurship drive continues to grow manifold and has placed itself well in an ever-expanding world.

The initiative is a great push to the country’s entrepreneurial system, as the government attempts to build exchange programs with foreign startups in Germany and SAARC nations. International startup corridors are set up for trade with countries like Japan, US, UK, etc. to push cross-border investor sentimentalities.

The last 3 years have seen a rush of startups in retail, food delivery, consulting, e-commerce, medical services, delivery services, fitness and many other prominent areas among others. About 800 startups are born each year. Startups are progressing by way of increasing product capabilities, networking, taking estimated risks in order to enter into new opportunities. Delhi NCR and Bangalore watched a large number of startups coming up.

Cities like Jaipur, Chandigarh, Chennai, and Jodhpur have also witnessed an increase in economic and startup activities. States Karnataka, Kerala, Andhra Pradesh, and Telangana performed much better in policy implementation for backing up new enterprises.

They have worked on the infrastructure of Tier-II cities. A fantastic example is the Launch of the “Kerala IT Mission”. Kerala built India’s first telecom incubator Startup village in 2012. Telangana has the largest incubation center in India and is called “T-Hub”.  Andhra Pradesh also initiated the “Initial Innovation Fund” of ₹100 crores for entrepreneurs. Rajasthan works for startups under the “Start-up Oasis” scheme. Similarly, every state has contributed to the upcoming new companies’ gestation and sustenance.

Also Read: Make in India: The Idea Will Make India a Manufacturing Hub

India Can Be a Hub and Testing Ground for Innovation

India is fast becoming a breeding ground for innovations.  India is shifting to a knowledge-based economic growth model and commits to reinvent its advantages as labor-intensive, capital-intensive, and manufacturing nation. Future trends show opportunities for startups to disrupt and innovate with technologies like blockchain, the Internet of Things (IoT), artificial intelligence (AI), and machine learning, etc. With the kind of policy reforms that India is headed towards, startups can play a big role.

It is clear off late, that India’s start-up ecosystem is vibrant and mainstream. It creates jobs, solves consumer problems, and creates products for the world. India seems to be more appealing as a start-up nation because of cost benefits, the size of the market in India, and skilled human capital. India has the 3rd highest number of incubators with over 250 incubators being present in India. 2010-20 is the Decade of Innovation for India.

There has been a push towards policies, science, technology & innovation. India stands as 3rd largest eco-system of the globe for start-ups after US, UK & Israel. NASSCOM predicted about 11,500 start-ups in the country by 2020. Angel investors and venture capital funding were the highest during the last years.


Still many issues such as pending policies, taxation, infrastructural and bureaucratic hurdles need to be resolved.  The delay and ineffectiveness however have been failing many startups. This can be ascertained by the fact that the Startup India scheme had 1368 applications by December last year however (DIPP) only accepted 502 applications for ‘startups’ status.

There is difficulty accessing credit as it is not easy to attract investors to fund ventures or getting loans from banks. Although there has been ease in norms, banks still don’t release loans without hassle. Even after being able to raise funds, startups face survival concerns due to changed economic factors and less experience. There is a need for to right mentorship and skill enhancement for startups. Right guidance is crucial for running an effective and profitable business.

Location is also another hurdle for budding companies as their reach is limited and experience is less. This affects investment activities and profitability.


Yes, ‘Startup India’ is boosting entrepreneurship but with the current drive in the country, the government will now need to raise top technical talent and global business. It is time to “reverse brain-drain” to make India startup-friendly. To reinforce links between various shareholders of this initiative, India should invest heavily in R&D.   A lot of emphases has to go into developing human capital and investing in intellectual property.

More open data needs to be analyzed to identify the successful characteristics of startup enterprises and the potential failure of startups.  A database like a credit risk database should be brought in placed to promote financing for startups. Presently Indian startups are just emulating successful global ideas but they need to go beyond.

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