How Startups are strengthening the Indian ecosystem

India is currently at a critical moment in its efforts to develop itself as a technologically advanced centre for economic and social solutions. A thriving startup environment generates a wealth of opportunities and supports economic growth. The International Finance Corporation began analysing the investment returns in a few local markets, notably India, at the beginning of the 1980s. Amazingly, the outcomes were better than expected, and they provided a solid justification for luring foreign direct investments into these economies. Over the years, India's digital and technological development has given rise to a variety of opportunities for investors, business owners, and skilled labour. Contrarily, the COVID-19 pandemic was a development engine for the whole Indian startup ecosystem since India experienced the largest growth while dealing with the global epidemic. India currently has the third-largest startup ecosystem in the world, behind China and the United States of America, and is the economy with the quickest rate of growth.

Where it all started?

In 2016, the government introduced the Startup India programme to boost India's startup culture. The objective was to build a strong ecosystem around them that would support innovation across the board and promote long-term economic growth and job growth. In 2021, India was ranked as the 19th-best startup cluster in the world, just six years after the program's launch. According to official statistics, startups have created 7.68 lakh employment in India during the last six years, with the number of individuals employed rising by 14% over the time. Despite a downturn in funding, PE/VC funds closed 1,130 startup deals in 2022, according to Venture Intelligence. The succession of funding deals supporting startups and the emergence of new-age enterprises can be considered as substantial factors to the competitiveness of the Indian market if we were to add the 1,215 deals completed in 2021. The Indian startup environment, as well as possible buyout agreements and IPOs in 2023, can be supported by a sizable amount of granules.

Tarun Sharma, Founder and CEO, Yodda Elder Care, said, “The budget is inspiring and encouraging for the start-up ecosystem. For the elders and seniors, setting up 157 new nursing colleges is a positive step in increasing the number of caregivers and is in line with the commitment to increasing public health expenditure to reach 2.5% of GDP by 2025. Also, the limit enhancement in the senior citizen savings scheme to Rs 30 lakhs is likely to encourage more savings from seniors.

While this budget might is very positive for the masses, it misses the intent and lacks inclusiveness for the senior citizens. With the rise of the ageing population, there is an urgent need for professional at-home care services for elders. While businesses like caregiving or home visits from nurses have been freed of tax burdens, at-home elder care continues to be taxed at a rate of 18% GST a factor limiting the affordability and reach of such services. We urgently need these services to be tax-exempt or taxed at a lower rate to ease the burden on the senior citizens.”

Neha Bagaria founder & CEO of JobsForHer, said, “We appreciate the emphasis on training the young population, and the decision to decrease the total tax obligation, which encourages domestic spending. However, we were hoping for a gender-inclusive budget that would offer more chances for women's career growth, tax incentives to hasten their skills development, lower the cost of higher education for women, and provide support for female entrepreneurs. Hope these are also included in future drafts”.

Indian Entrepreneurs and Startups at forefront during COVID-19 crisis

Global nations have been startled and shaken by the speed and severity with which the COVID-19 catastrophe has descended. People from all walks of life are being affected by its contagious spread in more than 140 nations, which has been expedited by the intricately interconnected world we all live in, where human movement is essential to practically every nation's economy. The Government of India is taking numerous precautions in parallel to make sure that this global pandemic does not wreak havoc in a country with as diverse a set of challenges as one could imagine having. The difficult task of keeping more than 1.3 billion people safe from the clutches of the coronavirus. One of them is to take use of its over 250 incubators and 30,000 acve companies in its innovation and startup ecosystem.

A crisis of this magnitude requires strong government assistance. Furthermore, it calls for strong collaborations between academia, government, and business. The Indian government's unwavering support of its startup and incubator ecosystem over the past few years is one of the brightest shining lights on the horizon to dispel the darkness of despair that seems to be enveloping many parts of the world, even though no one could have anticipated a crisis of such epic proportions to arise so unexpectedly.

Bhanu Chopra, Founder & MD, RateGain Travel Technologies Limited, said, What I loved about the budget presented by Hon. Minister Nirmala Sitharaman is the focused on upskilling, innovation and technology- the realization that the curriculum of today is no longer enough for people to succeed in the AI-enabled future. The Minister's focus on involving educational establishments, and making center of excellences for innovation will bring a new mindset in future generations to experiment, fail, and pivot from a very young age - setting up a country that is agile, ever ready to embrace new technology, and be the economy that the world relies on to drive growth! Make AI in India and For India.

The Future Awaits

India's startup-friendly conditions often don't call for significant financial investments or financial incentives. However, they do require support at all stages of development, including company strategy, community building, and establishing connections with knowledgeable business mentors. This support comes from successful entrepreneurs and strategic angels. A complete interaction between all stakeholders is necessary for innovation to be supported and R&D to be pushed in the country. Real leaders will differentiate themselves from the rest in the coming years based on how their organisations react.

Javed Tapia, Founder & Managing Director, Clover Infotech, said, “The measures introduced in the Union Budget 2023 in terms of ease of doing business such as reducing compliance requirements and legal provisions will play a key role in attracting global investments into India. By relaxing contract execution policies, facilitating availability of credit, and extending tax benefits to start-ups and MSMEs, the FM has taken progressive steps to build a favourable support ecosystem for start-ups and MSMEs. The training and skilling initiatives under the ‘Make AI in India’ and ‘Unified Skill India Digital Platform’, will create a highly skilled workforce that can significantly accelerate our economic growth.”

Founder of Geniemode- Mr. Tanuj Gangwani, said, "Today's budget for the first time offered a package of assistance for traditional artisans through the PM Vishwakarma KAushal Samman (PM VIKAS) scheme. This step is in the right direction and will enable artisans to improve their products' quality, scale and reach, integrating them with the MSME value chain. While tax rebates on personal income will benefit the commoner, we were expecting decriminalization of GST and TDS, which were not addressed in today's budget. Moreover, we were concerned about the high cotton prices and hoped a cotton price stabilization fund scheme would be installed. While the scheme wasn't introduced, the budget announcement spoke about adopting a cluster-based value-chain approach, encouraging collaboration between farmers, the state and the government, which will help reduce fluctuations in natural fibre, making it an overall positive value add."