(MENAFN- KNN India)
New Delhi, Dec 12 (KNN) India's celebrated startup ecosystem, renowned for its innovation and job creation, is grappling with significant challenges, as over 5,000 startups registered under the Startup India initiative have shut down.
Government data as of December 5, 2024, reveals that these closures account for 3.3 per cent of the 1.52 lakh startups recognised by the Department for Promotion of industry and Internal Trade (DPIIT).
Maharashtra reported the highest number of closures, with 929 startups ceasing operations, followed by Karnataka (644), Delhi (593), Uttar Pradesh (487), and Telangana (301).
These closures underscore challenges such as fierce competition, funding shortages, and ambiguous market strategies, which often overwhelm emerging enterprises.
Despite setbacks, the Startup India initiative has significantly contributed to job creation, generating 16.6 lakh direct jobs across 55 industries.
The IT services sector leads with 2.04 lakh jobs, trailed by healthcare and life sciences (1.47 lakh), professional services (94,060), education (90,414), construction (88,702), and food and beverage (88,468). This demonstrates the ecosystem's resilience and its critical role in India's economic fabric.
The challenges extend to Micro, Small, and Medium Enterprises (MSMEs). According to Udyam portal data, 61,469 MSMEs have shut down since July 2020, with a sharp rise in closures-over 12,000-between July and November 2024. The majority of these were micro-units, reflecting vulnerabilities in smaller enterprises.
Experts emphasise that while closures signify growing pains, they also offer lessons for shaping a more robust ecosystem.
Key recommendations include improved access to mentorship, sustainable funding channels, and tailored policies that foster long-term stability.
As India's entrepreneurial spirit continues to thrive, addressing these systemic issues will be vital for ensuring startups and MSMEs achieve their potential as engines of innovation and employment.
(KNN Bureau)
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