India’s Startup Ecosystem Thrives with Over 1.4 Lakh Startups, Government Continues Support
New Delhi: India has surpassed 1.4 lakh startups, as reported by Union Minister of State for Commerce and Industry, Jitin Prasada, on Friday. In a response to the Rajya Sabha, Prasada highlighted that, as of June 30, the Department for Promotion of Industry and Internal Trade (DPIIT) has officially recognized 1,40,803 entities under the ‘Startup India’ initiative.
Since the launch of this initiative in 2016, the government has implemented over 55 regulatory reforms aimed at enhancing the ease of doing business, facilitating capital raising, and reducing the compliance burden for startups.
The Union Budget 2024-2025 has further bolstered this support by abolishing the angel tax on startups, which is expected to attract more foreign investment and alleviate the funding challenges faced by many startups.
Additionally, the government has sanctioned Rs 945 crore under the Startup India Seed Fund Scheme (SISFS) for the four-year period starting from 2021-22. To further support startups, the Fund of Funds for Startups (FFS) scheme was established with a corpus of Rs 10,000 crore, managed by DPIIT and operated by the Small Industries Development Bank of India (SIDBI).
The Centre has also introduced a credit guarantee scheme to provide credit guarantees for loans to DPIIT-recognized startups, extended by commercial banks, Non-Banking Financial Companies (NBFCs), and venture debt funds (VDFs) under SEBI-registered alternative investment funds.
Despite these advances, private equity and venture capital investments in India saw a decline in 2023, totaling $39 billion compared to $62 billion in 2022. Nonetheless, the government’s ongoing efforts are expected to sustain and potentially enhance the growth trajectory of India’s vibrant startup ecosystem.
