Nevertheless, in its vanity show the Union Government said that the occasion celebrates the nation's strides in fostering a robust and inclusive entrepreneurial ecosystem. Launched as a flagship initiative of the Government of India, Startup India aimed to nurture innovation and catalyse the growth of startups across the country.
The Department for Promotion of Industry and Internal Trade (DPIIT) has recognised 1.59 lakh startups in the country as on January 15, 2025. Centre has claimed that the vibrant ecosystem, driven by over 100 unicorns, continues to redefine innovation and entrepreneurship on the global stage. Major hubs like Bengaluru, Hyderabad, Mumbai, and Delhi-NCR have led this transformation, while smaller cities have increasingly contributed to the nation's entrepreneurial momentum.
The key milestones of Startup India programme were enumerated on this occasion. It was said that the number of DPIIT-recognised startups has grown from around 500 in 2016 to 1,59,157 as of January 15, 2025 of October 31, 2024, a total of 73,151 recognised startups include at least one woman director, showcasing the rise of women entrepreneurs in India. From 2016 to October 31, 2024, recognised startups have reportedly created over 16.6 lakh direct jobs, significantly contributing to employment generation.
Core features of the startup India initiatives were – Ease of Doing Business; Tax Benefits; Funding support from the Rs 10,000 crore Fund of Funds; and Sector-specific Policies. Government said that as of October 31, 2024, DPIIT-recognised startups have created over 16.6 lakh direct jobs across various sectors, significantly contributing to employment generation. The IT Services industry leads with 2.04 lakh jobs, followed by Healthcare & Lifesciences with 1.47 lakh jobs, and Professional & Commercial Services with around 94,000 jobs. These contributions highlight the role of startups in driving economic growth and creating diverse employment opportunities across industries.
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Three flagship schemes were implemented under Startup India. The Startup India Seed Fund Scheme (SISFS) was launched for four-years period starting from 2021-22 with a corpus of Rs945 crore. The scheme supports startups in areas like proof of concept, prototype development, product trials, market entry, and commercialisation. As of October 31, 2024, the EAC has approved 213 incubators, which have in turn selected 2,490 startups for a total approved funding of Rs 454.04 crore. The performance is obviously very dismal.
As for the Credit Guarantee Scheme for Startups (CGSS), only Rs 555.24 crore in loans were guaranteed to 235 startups, including Rs 24.60 crore to 18 women-led startups as of October 31, 2024. It is also not a satisfactory level of performance.
Under the Fund of Funds Startups (FFS) scheme, by 2024 since 2016, Rs 11,148 crore was committed, catalysing investments of Rs 21,221.36 crore in 1165 startups. The speed of work is obviously slow.
To understand all these, including the deceptive ranking of India being the third largest startup ecosystem of the world we need to look into The Global Startup Ecosystem Report (GSER) 2024. It identified top 40 global ecosystems. No startup ecosystem of India figures in even top 20. Bengaluru-Karnataka's rank was 21 (tied) while Delhi ranked 24. Mumbai ranked 37. That is all. Only three startup ecosystem figured in top 40 in the world.
Now let us see how the three top Indian startups at Bengaluru, Delhi and Mumbai were performing on the scale of 10. Bengaluru's performance score is just 5, funding score is 9, talent and experience is 2, market reach is 5 and knowledge is 3. Delhi's performance score is 7, funding 7, talent and experience 3, market reach 5, and knowledge 1. Mumbai's performance score was 4, funding score is3, talent and experience 1, market reach 1 and knowledge score 1.
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How bad the performance score of the top three startup ecosystems in India is can be imagined even by common people, if we compare these with the top performers. Let us take example of the top three startup ecosystem of the world – Silicon Valley, London, and New York City. Silicon Valley scored 10 in all counts but knowledge in which it scored 9. London scored 10 in all counts. New York City scored 10 in all counts but in knowledge in which it scored 8.
These are the success factor highlights. Take the example of Mumbai startup ecosystem, which experienced sharp ranking decline as per the GSER 2024. It fell six spots to 37 in 2023. In 2021, Mumbai's seven large exits were 6th among Asian ecosystems; however, in2022, this number dropped to three, and in 2023, zero. Unfortunately, early-stage deals have followed a similar trajectory.
While Mumbai startups secured 31 Series A deals in 2021, 9th among Asian ecosystems, there were just 11 deals in 2023, tied for 17th. Mumbai still has many strengths it can leverage. Because of its market size, B2C startups that achieve product-market fit have tremendous scaling opportunities. The grocery delivery startup Zepto, based in Mumbai, became a unicorn in 2023 following its $200M Series E round. Zepto will undoubtedly be a large exit candidate soon, recycling that much-needed capital and managerial talent into the ecosystem. Mintifi, a Fintech startup focused on small business lending, raised $160 between Series C and D rounds in 2022 and 2023, respectively.
It shows that India needs to stop boasting and work hard for startups to survive and prosper. Rise in numbers is not so important as their survival, prosperity, and the quality of their performance. Vanity on the basis of deceptive ranking would not pay. (IPA Service )
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