The Modi government’s flagship scheme to promote the Indian startup ecosystem – Startup India has witnessed a 57 per cent growth in the number of government-recognised startups. From around 24,927 companies recognized as startups in November last year by the Department for Promotion of Industry and Internal Trade (DPIIT), the number has jumped to 39,114 startups as of November 3, 2020, according to the data from the Startup India portal. “With 26 startups being recognised by @DIPPGOI every day, #NewIndia is rapidly growing as a startup hub!,” government investment promotion agency Invest India had tweeted last year. The Startup India initiative was launched by Prime Minister Narendra Modi on January 16, 2016.
DPIIT in its Vision document last year had aimed at 50,000 new startups, 20 lakh direct and indirect jobs by 2024 along with 500 new incubators and accelerators, 100 innovation zones in urban local bodies, and seven research parks to help startups. DPIIT had also proposed allocating the entire corpus of Rs 10,000 crore Fund of Funds along with increasing CSR funding to incubators. The department had also said that an India Startup Fund of Rs 1,000 crore for technology startups and another Rs 1,000 crore in seed funding to startups would be set-up.
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Out of the existing Rs 10,000 crore Fund of Funds, as of February 18, 2020, SIDBI had committed Rs 3123.20 crore to 47 SEBI registered Alternative Investment Funds (AIFs) that have invested Rs 3,378.47 crore into 320 startups out of which Rs 912.91 crore have been drawn from Fund of Funds for startups. The fund does not invest directly into startups but offers capital to the AIF as daughter funds who in turn fund startups through equity and equity-linked instruments.
However, while startups remain a key component to entrepreneurship in India, their share in the country’s gross domestic product (GDP) is not known. “No data on contribution to GDP by startups is maintained by the Department for Promotion of Industry and Internal Trade,” Commerce Minister Piyush Goyal had said in a written reply to a question in the Rajya Sabha in September this year.
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