CHAPTER – 1

INTRODUCTION
 INTRODUCTION
OVERVIEW OF STARTUP INDIA
The “Startup India” project, which aims to foster an atmosphere
that is beneficial to the establishment of new businesses in India,
was recently made public by the government of India. A number of
initiatives geared toward achieving this goal have been kicked off
by different ministries within the Indian government. The
Department for Promotion of Industry and Internal Trade, Ministry
of Commerce and Industry of the Government of India has issued a
description for an organisation that is to be regarded to be a
Startup in terms of bringing consistency in the recognised
companies. This was done in order to bring about the goal of
bringing about conformity in the recognised businesses.
Startup India Scheme is an initiative by the Government of India for
generation of employment and wealth creation. The goal of Startup
India is the development and innovation of products and services
and increasing the employment rate in India. Benefits of Startup
India Scheme is Simplification of Work, Finance support,
Government tenders, Networking opportunities. Startup India was
launched by Prime Minister Shri. Narendra Modi on 16th January
2016. The mission of the government of India’s flagship
programme, Startup India, is to foster a culture of
entrepreneurship and innovation in India by creating a robust
environment that welcomes participation from a diverse range of
people. Startup India has introduced a number of programmes
with the intention of assisting business owners and changing India
into a nation of people who create jobs rather than a nation people
who search for jobs.
Action Plan of Startup India Scheme
The action plan of Startup India is based on the following factors:

1. Simplification of Work

This initiative simplifies the work for the new entrants in order to
motivate them. This includes following steps taken by the
government:

 Firstly, the government has set-up Startup India hubs where all
the works related to incorporation, registration, grievance
handling, etc.
 Secondly, an application and an online portal is set-up by the
government to facilitate registration from anywhere and anytime.
 Thirdly, the patent acquisition and registration are now fast for
the startups.
 Lastly, according to the Insolvency and Bankruptcy Bill, 2015
facilitates fast winding up of the startups. A new startup can
wind-up itself within 90 days of the incorporation.
2. Finance Support
 In order to motivate the startups, the government provides
various financial supports. These steps taken by the government
are as follows:
 The government has set up a corpus of Rs.10,000 crores for 4
years (Rs.2500 crore each year). From such fund, the
Government invests in various startups.
 Special funds are provided, investment in which leads to
exemption from the income tax on the Capital Gain.
Income tax exemption is available for the startups for the first 3
years after the incorporation.
 Under The Income Tax Act, where a Startup (company)
receives any consideration for issue of shares which exceeds the
Fair Market Value of the shares, such excess consideration is
taxable in the hands of the recipient as Income from Other
Sources.
 Investment by venture capital funds in Startups is exempted
from the application of this provision. The same extends to the
investment made by incubators in the Startups.

Benefits of Startup India

 Financial Benefits
 Income Tax Benefits
 Registration Benefits
 Government Tenders
 Huge Networking Opportunities

1. Financial Benefits

 Most of the startups are patent based. It means they produce or

provide unique goods or services. In order to register their
patents, they have to incur a heavy cost which is known as the
Patent Cost.
 Under this scheme, the government provides 80% rebate on the
patent costs. Moreover, the process of patent registration and
 related is faster for them. Also, the government pays the fees of
the facilitator to obtain the patent.

2. Income Tax Benefits

 Startups enjoy a good amount of benefits under the Income Tax
head. The government exempts their 3 years income tax post
the incorporation year.
 But they can avail it only after getting a certificate from the
Inter-Ministerial Board. Also, they can claim exemption from
tax on Capital Gains if they invest money in specified funds.
3. Registration Benefits
 Everyone believes that incorporation and registration of
business are far more difficult than running it. It is because of
the long and complex steps of registration.
 Under the Startup India scheme, an application is there to
facilitate registration. A single meeting is arranged to at the
Start-up India hub. Also, there is a single doubt and problem-
solving window for them.
4. Government Tenders
 Everyone seeks to acquire Government tenders because of high
payments and large projects. But it is not easy to acquire the
government tenders.
 Under this scheme, the startups get priority in getting
government tenders. Also, they are not required to have any
prior experience.
5. Huge Networking Opportunities
 Networking Opportunities means the opportunity to meet with
various startup stakeholders at a particular place and time. The
government provides this opportunity by conducting 2 startups
fests annually (both at domestic as well as the international
level).
 Startup India scheme also provides Intellectual Property
awareness workshop and awareness.
 OBJECTIVES OF THE STUDY
The primary objective would be: -

The primary objective of the Startup India initiative is to promote

and support startups in India, fostering entrepreneurship and
promoting innovation. The initiative aims to create a conducive
environment for startups to grow through various means, such as
simplifying the regulatory framework, providing financial support
and incentives, and facilitating access to networks and resources.
The ultimate goal is to drive sustainable economic growth and
generate employment opportunities across the country.

The other objectives would be: -

In addition to the primary objective of promoting and

supporting startups, the Startup India initiative has several
other objectives:

1. Creating Employment Opportunities: By nurturing a thriving

startup ecosystem, the initiative aims to generate
employment opportunities, especially for the youth.

2. Fostering Innovation: Encouraging innovation and fostering

a culture of entrepreneurship are key objectives to drive
economic growth and competitiveness.

3. Simplifying Regulations: Simplifying the regulatory

framework for startups to reduce compliance burden and
promote ease of doing business.
4. Providing Financial Support: Providing financial support
through various schemes, such as funding, tax incentives, and
subsidies, to facilitate startup growth and sustainability.

5. Facilitating Networking and Collaboration: Facilitating

networking opportunities and collaborations among startups,
investors, and other stakeholders to promote knowledge
sharing and growth.

6. Promoting Women Entrepreneurship: Encouraging and

supporting women entrepreneurs to participate in and benefit
from the startup ecosystem.

7. Promoting Sustainable Development: Encouraging startups

to focus on sustainable development practices, including
environmental sustainability and social impact.

8. Building a Robust Startup Ecosystem: Developing a robust

ecosystem with incubators, accelerators, mentoring networks,
and support services to nurture startups at different stages of
growth.

Objectives of my research work are as follows:

1. For Promote new technology/ knowledge/ innovation-

based startups

2. To Make India Nation of “Job Creator” and not Jobs Seeker”

3. Attract Capital and technological investment in India

4. For make an exciting startup ecosystem, by establish a

system between academia, financial institutions, industries,
and other institutes

RESEARCH METHODOLOGY
My research work is highly focus on the startup India as well as
during the research work, I learned the importance of startup India
and which factors affects it. I got great experience about the project.

DATA COLLECTION
The method of data collection which I choose is SECONDARY DATA.
The secondary data is the data which is collected from other sources
i.e. published or unpublished data.

For collecting secondary data, I took the help of internet. I searched

all important websites related to my topic. After that I deeply study
the collected data. I also refer all books available, magazines, and
economical newspapers for update knowledge about my topic.

In these steps I will collect all required information for my project

report to make my project good one.

TOOLS AND TECHNIQUES OF DATA ANALYSIS

There are two types of data analysis methods: -

1. Quantitative Data Analysis

As the name suggests, quantitative analysis involves looking at the
complex data, the actual numbers, or the rows and columns.

2. Qualitative Data Analysis

There are situations where numbers in rows and columns are

impossible to fit. This is where qualitative research can help you
understand the data’s underlying factors, patterns, and meanings
via non-numerical means.

My data consists of both quantitative as well as qualitative data as it

provides a complete and better information about the project.

PLAN OF THE STUDY

The plan of study is to educate and to understand about the recent
programs launched by the government. The project shows about
how the startup India is initiated and is providing various
opportunities to the economy.
 LIMITATION OF STUDY

1. Limited Scope for Certain Sectors:

Some sectors may find the Startup India initiative less applicable due
to the nature of their businesses. While technology and innovation-
driven startups may thrive, traditional businesses or those in highly
regulated industries may not fully benefit from the program

2. Dependency on Government Policies:

The advantages provided under Startup India are subject to

government policies, which can change over time. Depending
heavily on these policies might expose startups to uncertainties, and
any alterations in the government’s stance could impact the benefits
they were initially entitled to.

3. Potential for Misuse:

The Startup India initiative aims to support genuine startups, but

there is a risk of misuse. Some entities may attempt to exploit the
benefits without aligning with the true spirit of entrepreneurship,
potentially diluting the effectiveness of the program.
 CHAPTER – 2
CONCEPTUAL REVIEW
 COMPILATION OF DATA
Startup India was inaugurated by the former finance minister, Arun
Jaitley, organized by the Department for promotion of industry and
internal trade, the major objective of Startup India is to discard some
of the restrictive States Government policies which include:
1.License Raj
2.Land Permissions
3.Foreign Investment Proposals
4.Environmental Clearances
The Startup India scheme is based majorly on three pillars which are
mentioned below:
1.Providing funding support and incentives to the various start-ups of
the country.
2.To provide Industry-Academia Partnership and Incubation.
About the Startup India Portal
This website, also known as the Startup India Portal is an online
platform for startups and entrepreneurs. It houses one of the largest
networks in the Indian Startup Ecosystem, connecting tens of
thousands of key stakeholders such as startups, investors, incubators)
on a single platform and allowing them to discover and collaborate
with each other.
 The Portal also aims to reduce knowledge asymmetry and better
equip entrepreneurs for success by providing them with essential
information, online courses, a database of government schemes,
market research reports, free software applications and other useful
resources.
The portal is one of the programs mandated under the Startup
India Initiative.

Highlights of the Startup India Scheme

Startup India Scheme

Date of launching 16th January 2016

Government Ministry Ministry of Commerce and Industry

Department Department for Promotion of Industry and Internal Trade

Launched by Arun Jaitley (Former Finance Minister of India)

HISTORICAL EVOLUTION

The Indian startup ecosystem has rapidly grown over the last
decade and established itself as one of the key startup hubs
globally. The purpose of this article is to provide an overview of the
evolution of startups in India, key sectors, growth drivers and
challenges.

India has emerged as the third largest startup ecosystem in the

world after the US and China. As per NASSCOM, India has added
over 1,600 tech startups in 2021 taking the total number of tech
startups to over 12,500. There has been a 2x growth in the number
of startups from around 7,000 in 2016 to over 14,000 in 2022. This
growth has been fuelled by factors like rising internet and
smartphone penetration, government support, access to funding,
evolving tech landscape and a young tech-savvy population.

The startup revolution in India has also been boosted by some

iconic startup success stories like Flipkart, Paytm, Zomato, Ola Cabs
etc. Many Indian startups have achieved the unicorn status with
over 100 startups valued at over $1 billion. India ranks third
globally in terms of number of unicorns after the US and China.

The future outlook for the Indian startup space is very promising
given the large market opportunity, policy support and availability
of risk capital. With the right nurturing, the Indian startup
ecosystem has the potential to drive innovation, create large-scale
employment and contribute to the economic growth of the
country. The government has launched initiatives like Startup India
to boost entrepreneurship and create a supportive environment
for startups.

The Indian startup ecosystem has rapidly grown and evolved over
the past decade. Some key events and milestones include:

 2005-2010 - The number of tech startups began to increase,

with companies like RedBus, Justdial, and Snapdeal getting
founded. Venture capital investment was still relatively small.
 2011 - The Startup India Standup India campaign was
launched by the government to promote entrepreneurship.
 2012-2015 - The startup ecosystem saw rapid growth, with
the number of startups increasing from around 800 to over
5,000. E-commerce startups like Flipkart, Ola, and Oyo
attracted major funding.
  2016 - India saw a startup funding peak, crossing $10 billion
with over 1,400 deals. Large startups like Flipkart and Oyo
attracted multi-billion-dollar valuations.
 2017 onward - Consolidation phase started. Funding declined
after the 2016 peak but then recovered. Number of active
startups increased from 7,000 - 8,000 in 2016 to over 50,000
by 2020. Tier 2 & 3 cities began to emerge as startup hubs.
 2020 - During the pandemic, startups showed resilience. India
produced 44 unicorns in 2021, overtaking the previous
annual record. Current ecosystem estimated at over 60,000
startups.
 2022 - India continues to have the 3rd largest startup
ecosystem after US and China. Projected to have 100
unicorns by 2025. Shift from B2C to SaaS and B2B startups.

The Indian startup ecosystem has shown immense growth, with

increasing founder enthusiasm, availability of funding, and
supportive government policies. Key milestones demonstrate the
maturation and size of the ecosystem over the past decade.

India has seen a surge of startups in key sectors like ecommerce,

fintech, healthtech, edtech, foodtech, and more. Some of the top
sectors driving startup growth in India include:

a. Ecommerce

Ecommerce has been one of the biggest success stories, with

startups like Flipkart, Snapdeal, and Shopclues pioneering online
shopping in India. Flipkart is the leading player, acquired by
Walmart in 2018 for $16 billion. Other top startups in ecommerce
include Grofers, BigBasket, Nykaa, FirstCry, and Lenskart.

b. Fintech

Financial services are a rapidly growing sector, with startups

innovating in areas from mobile payments to lending. Leading
fintech startups include Paytm, PolicyBazaar, Pine Labs, Razorpay,
Zerodha, and Cred. Paytm pioneered mobile wallet payments and
has now expanded into banking and financial services.

c.Foodtech

Foodtech startups like Swiggy and Zomato have driven a food

delivery revolution. These startups have made restaurant food
accessible with online ordering and delivery. Other players in
foodtech include FreshMenu, Faasos, and Box8.

d.Edtech

The education sector is being disrupted by startups like Byju's,

Unacademy, Vedantu, and Toppr. These startups are delivering
education online, tapping India's demand for learning and test
preparation. The potential for growth in edtech is immense.

Healthcare, agritech, logistics, and transportation are other

important sectors seeing emerging startups. India's startups are
creatively addressing key pain points and market gaps across
diverse industries. With increasing internet and smartphone
penetration, these startups are positioned for rapid growth.

e. Funding

India has seen a surge in startup funding over the past decade,
driven by increasing interest from venture capital firms and private
equity investors. Some key funding trends include:

 Venture capital funding has steadily increased year-over-year,

reaching over $36 billion in 2021. Sequoia Capital, Accel
 Partners, Blume Ventures, and Matrix Partners are among the
most active VC investors in Indian startups.
 Private equity investment has also risen significantly, crossing
$66 billion in 2021. Major PE firms like Softbank, Temasek,
Warburg Pincus, and General Atlantic have been deploying
large checks into growth-stage startups.
 Angel networks like Indian Angel Network, Mumbai Angels,
and Hyderabad Angels have enabled early-stage capital
access. Total angel funding reached around $1.7 billion in
2021.
 The Indian government has also launched various startup
funds through organizations like SIDBI and NITI Aayog to
improve access to risk capital.
 Flipkart, Paytm, OYO, Byju's, Zomato, and Nykaa have been
among the biggest recipients of private capital in recent
years, raising billions of dollars each.
 Growing consumer internet, fintech, and Software as a
Service (SaaS) sectors receive the majority of funding
currently.
 The expanding funding landscape has facilitated the rise of
numerous unicorns and decacorns despite a global slowdown
in 2022. With improved regulatory policies, India's startup
funding outlook remains robust.
 CHAPTER 3
DATA PRESENTATION AND ANALYSIS
 Startup India – State Rankings
States’ Startup Ranking Framework is an evolved evaluation tool
aimed to strengthen the support of States and UTs to holistically
build their startup ecosystems. The rankings are based on the
criteria of policy, incubation hubs, seeding innovation, scaling
innovation, regulatory change, procurement, communication,
North-Eastern states, and hill states.
The latest edition of the States’ Startup Ranking 2020 was released
on September 11, 2020. UPSC aspirants can visit the linked article
and get the list of top states with the best startup ecosystem.
The States’ startup rankings from 2019 and 2018 have been given
in the following tables for the reference of the candidates:

Startup India State Rankings 2018

Ranks States

Best performer Gujarat

Top performers Karnataka, Kerala, Odisha, and Rajasthan

Leader Andhra Pradesh, Bihar, Chhattisgarh, Madhya Pradesh, and Telangana

Aspiring Haryana, Himachal Pradesh, Jharkhand, Uttar Pradesh, and West Bengal
leaders

Emerging Assam, Delhi, Goa, Jammu & Kashmir, Maharashtra, Punjab, Tamil Nadu,
states and Uttarakhand

Beginners Chandigarh, Manipur, Mizoram, Nagaland, Puducherry, Sikkim, and Tripura

Startup India State Rankings 2019

Ranks States

Best Gujarat, Andaman and Nicobar Islands

performer

Top Karnataka, Kerala

performers

Leader Maharashtra, Odisha, Rajasthan, Bihar and Chandigarh

Aspiring Telangana, Uttarakhand, Haryana, Jharkhand, Punjab

leaders

Emerging Chhattisgarh, Himachal Pradesh, Andhra Pradesh, Tamil Nadu, Madhya

states Pradesh, Uttar Pradesh Assam, Delhi, Mizoram and Sikkim
Over the past two years, job-related headlines from the startup
ecosystem have been dominated by layoffs. While retrenchments
have certainly plagued Indian startups, the ecosystem as a whole
has also emerged as one of the biggest in terms of job creation.

Indian startups have created employment for more than 10 Lakh

people over the past seven years, with several startups having
created tens of thousands of jobs alone. Several factors have
worked in favour of the trend observed.

The answer becomes much more obvious when superimposing the

funding trends over employment generation, but as the number of
startups itself rose rapidly, so did the employees be hired by them.

That said, 2023 saw a marked decline in funding and new startups
being launched. The ripple effect of the latter would likely be felt
over the next few years, as fewer companies opening now would
lead to fewer job opportunities down the line.
 CHAPTER 4
FINDINGS AND CONCLUSIONS
 CONCLUSION
While the world-changing potential in startups is sometimes
overhyped, successful startups do have the potential to create a
significant positive impact on the world. And even when startups fail,
they still have an impact, especially through the learnings for the
founders, employees, investors and other stakeholders.
Startups are one of the most promising ways to solve the critical
problems humanity is facing because they can react much faster to
problems that arise and can innovate solutions more freely than
traditional corporations. The startup ecosystem, in turn, enables the
prototyping and market testing of a massive number of new potential
innovations, accelerating the progress through which pressing global
issues can be solved.
Finally, startups have an impact also on the lives of the startup
entrepreneurs themselves. By embarking on a startup journey, the
entrepreneur will learn a great deal about discovering actual
problems, innovating solutions, analyzing markets and building the
organization and processes to support these activities. This helps the
entrepreneur develop an entrepreneurial mindset, through which
they can also contribute to other life activities, even if they later end
up working in a more traditional organization.
India's startup ecosystem is a remarkable success story driven by
government support, access to capital, a vast market, and a pool of
talented entrepreneurs. While challenges persist, the future looks
promising as India continues to produce innovative solutions and
disruptive technologies that impact not only the nation but the world
at large. With the right policies and continued investments, India's
startup ecosystem is poised for even greater heights in the coming
years.
 FINDINGS
In short, it can be seen that PM Modi’s entire Action Plan offers
various opportunities for all types of start-ups in India thereby
aiming to give a small push to new innovative businesses and
provide them assistance in establishing their business. The
Government also aims to minimize regulatory barriers in setting up
startups despite facing certain major challenges like elimination of
unscrupulous entities. Apart from this, there are some other grave
concerns relating to the certification of start-ups’ “innovation” by
Government authorities.
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