Rise of the Indian Startup Economy
Impactful impact of Startup Ecosystem on Indian Economic System
Startups are being the most prominent growth engines for GDP growth of India by implementing impactful solutions in business with various technological advancements. Realizing the significance of startup ecosystem, Indian Government has taken various measures to strengthen the startup businesses. In the financial budget 2023, Ministry of Finance allotted the lump sum of 283.5 crores to poise the utmost support for startups in India. Startups cultivate the entrepreneurial spirits by encouraging the individuals to take risks in business, pursue their goals by embracing the technology. Startups act as unique platform for aspiring entrepreneurs to enhance the skills and motivate to face a failure which fosters creativity and grow confidence in business.
Startups are constantly increasing employment opportunities and often hire talents from diversified backgrounds in various sectors including marketing, branding, technology, and operations to increase success rate and simultaneously scaling up business. Hence startups contribute in generating job opportunities especially for skilled and young citizens. They attract domestic & foreign investments by introducing innovative technologies and business model to the market. Evolution of more innovative startups will surely result in better GDP elevation of India.
As per the global economical survey, the expansion of startups has made India the third largest startup ecosystem in the world next to America and China. Startup ecosystem is hoping to contribute 5 percent in GDP growth of India for next five years. Indian Gross Domestic Product (GDP) is expected to grow by 6.9 percent in the fiscal year (FY) 2022-23 and 6.2 percent in FY 2023-24.
Role of Government
Recognizing the potential of tech-based startups driving the economic growth, Indian Government is constantly implementing various initiatives and implementations to nurture the startup culture. They launched several funding programs like FFS (Fund of Funds for startups) to exhibit maximum financial support to promote startups. The scheme ‘StartupIndia’ is playing a crucial role in providing appropriate resources for startups to improve their establishment and mechanism. This scheme aims in uplifting the women entrepreneurs and scheduled communities of India. Additionally, Government has taken various steps for startups in simplifying the registration process, reducing taxes on loans and assisting to avail the financial reimbursement from schemes.
Further, for the betterment of startups, Government have established incubation centers, research and development centers and innovation hubs to provide sufficient sources for startups. All these initiatives by government aim to foster the appreciative framework for startups to thrive the economical growth of the country. The utmost impactful government support for the startups has resulted with a drastic change in the startup ecosystem of India. In 2016, there were only 452 startups, but till 2022 there are 84,012 registered startups in India.
Calculating at the exponential growth of startup economy 1000 crore rupees was allocated for the Fund of Funds for Startups Scheme by 15th and 16th Finance Commission cycle, out of this fund 7,527.95 crore was approved for Alternate investment fund (AIF), for Karnataka alone the amount of AIF is 1,719.75 crore. In 2022, within the allocated fund of 945 crore, 455.25 crore was approved for 126 incubation centers and 186.15 crore has been disbursed. To improve its position in ease of doing Business Index, over 50 regulatory reforms have been undertaken by the Government since 2016.
The Landscape of Unicorns & Soonicorns
Unicorns are startups which have achieved and crossed total net worth value of $1 billion. Similarly, soonicorns are on the way to become a unicorn in short period of time. The landscape of unicorns and soonicorns in India has witnessed robust growth in various sectors. Unicorns and soonicorns are revolutionizing the retail, HealthTech, SaaS, AgriTech sectors by introducing innovative solutions in respective fields. Unicorns in India such as Ola, RazorPay, Purplle, HealthifyMe, Swiggy, and many more are major game changers. This widened growth of unicorns and soonicorns is attracting Indian as well as foreign investors to invest in Indian startups; these glorious achievements are helping in achieving global economic development of India. According to the report of Invest India 2023, “India is a hub to 108 unicorns with a net worth of $340.80 billion”.
This estimation shows the position of startups in India. Between the years 2015-2022 Indian startup ecosystem has witnessed a clean 9x increase in startups. In the last four years 35000 startups have started operating. As per the data accumulated by Hurun List 2023, India is now a proud parent of 34 unicorns from 10 unicorns in 2016. There are 52 startups which are going to be unicorn in coming years. Fintech alone has witnessed the growth of 18 soonicorns in past year. As per the report of Inc42, 52 soonicorns in 2020 were transformed into 73 unicorns till 2021 with Bengaluru holding the baton of success leaving behind Mumbai and Delhi NCR. Indian startups raised more than $42 billion across 1,583 deals in 2021.
Conclusion
Producing and consuming the country made products and services have undoubtedly helped us to save the extra pennies, which we needed to pay for importing foreign goods and services and this is the key importance of uplifting and encouraging the startup ecosystem. Further it has amplified the growth of Indian economy and made it third largest economy in the world after US and China. India has skillful manforce owing to which it can achieve the status of global manufacturer in near future, and for this Government of India started ‘Make in India’ campaign.
Indian Government has to take the front seat in this revolution of creating more incubation centers, co-working spaces, entrepreneurial cells, and instilling an entrepreneurial spirit in every student at a young age is even more necessary. Last but not the least, Government should focus on Self Help Group to uplift the cultural heritage and present it in global chamber proudly so that we can get the next millionaires from our villages.
Startups are being the most prominent growth engines for GDP growth of India by implementing impactful solutions in business with various technological advancements. Realizing the significance of startup ecosystem, Indian Government has taken various measures to strengthen the startup businesses. In the financial budget 2023, Ministry of Finance allotted the lump sum of 283.5 crores to poise the utmost support for startups in India. Startups cultivate the entrepreneurial spirits by encouraging the individuals to take risks in business, pursue their goals by embracing the technology. Startups act as unique platform for aspiring entrepreneurs to enhance the skills and motivate to face a failure which fosters creativity and grow confidence in business.
Startups are constantly increasing employment opportunities and often hire talents from diversified backgrounds in various sectors including marketing, branding, technology, and operations to increase success rate and simultaneously scaling up business. Hence startups contribute in generating job opportunities especially for skilled and young citizens. They attract domestic & foreign investments by introducing innovative technologies and business model to the market. Evolution of more innovative startups will surely result in better GDP elevation of India.
As per the global economical survey, the expansion of startups has made India the third largest startup ecosystem in the world next to America and China. Startup ecosystem is hoping to contribute 5 percent in GDP growth of India for next five years. Indian Gross Domestic Product (GDP) is expected to grow by 6.9 percent in the fiscal year (FY) 2022-23 and 6.2 percent in FY 2023-24.
Role of Government
Recognizing the potential of tech-based startups driving the economic growth, Indian Government is constantly implementing various initiatives and implementations to nurture the startup culture. They launched several funding programs like FFS (Fund of Funds for startups) to exhibit maximum financial support to promote startups. The scheme ‘StartupIndia’ is playing a crucial role in providing appropriate resources for startups to improve their establishment and mechanism. This scheme aims in uplifting the women entrepreneurs and scheduled communities of India. Additionally, Government has taken various steps for startups in simplifying the registration process, reducing taxes on loans and assisting to avail the financial reimbursement from schemes.
Further, for the betterment of startups, Government have established incubation centers, research and development centers and innovation hubs to provide sufficient sources for startups. All these initiatives by government aim to foster the appreciative framework for startups to thrive the economical growth of the country. The utmost impactful government support for the startups has resulted with a drastic change in the startup ecosystem of India. In 2016, there were only 452 startups, but till 2022 there are 84,012 registered startups in India.
Calculating at the exponential growth of startup economy 1000 crore rupees was allocated for the Fund of Funds for Startups Scheme by 15th and 16th Finance Commission cycle, out of this fund 7,527.95 crore was approved for Alternate investment fund (AIF), for Karnataka alone the amount of AIF is 1,719.75 crore. In 2022, within the allocated fund of 945 crore, 455.25 crore was approved for 126 incubation centers and 186.15 crore has been disbursed. To improve its position in ease of doing Business Index, over 50 regulatory reforms have been undertaken by the Government since 2016.
The Landscape of Unicorns & Soonicorns
Unicorns are startups which have achieved and crossed total net worth value of $1 billion. Similarly, soonicorns are on the way to become a unicorn in short period of time. The landscape of unicorns and soonicorns in India has witnessed robust growth in various sectors. Unicorns and soonicorns are revolutionizing the retail, HealthTech, SaaS, AgriTech sectors by introducing innovative solutions in respective fields. Unicorns in India such as Ola, RazorPay, Purplle, HealthifyMe, Swiggy, and many more are major game changers. This widened growth of unicorns and soonicorns is attracting Indian as well as foreign investors to invest in Indian startups; these glorious achievements are helping in achieving global economic development of India. According to the report of Invest India 2023, “India is a hub to 108 unicorns with a net worth of $340.80 billion”.
This estimation shows the position of startups in India. Between the years 2015-2022 Indian startup ecosystem has witnessed a clean 9x increase in startups. In the last four years 35000 startups have started operating. As per the data accumulated by Hurun List 2023, India is now a proud parent of 34 unicorns from 10 unicorns in 2016. There are 52 startups which are going to be unicorn in coming years. Fintech alone has witnessed the growth of 18 soonicorns in past year. As per the report of Inc42, 52 soonicorns in 2020 were transformed into 73 unicorns till 2021 with Bengaluru holding the baton of success leaving behind Mumbai and Delhi NCR. Indian startups raised more than $42 billion across 1,583 deals in 2021.
Conclusion
Producing and consuming the country made products and services have undoubtedly helped us to save the extra pennies, which we needed to pay for importing foreign goods and services and this is the key importance of uplifting and encouraging the startup ecosystem. Further it has amplified the growth of Indian economy and made it third largest economy in the world after US and China. India has skillful manforce owing to which it can achieve the status of global manufacturer in near future, and for this Government of India started ‘Make in India’ campaign.
Indian Government has to take the front seat in this revolution of creating more incubation centers, co-working spaces, entrepreneurial cells, and instilling an entrepreneurial spirit in every student at a young age is even more necessary. Last but not the least, Government should focus on Self Help Group to uplift the cultural heritage and present it in global chamber proudly so that we can get the next millionaires from our villages.
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