India celebrates National Startup Day on January 16, highlighting nine years of the ‘Startup India’ initiative, which has spurred innovation and growth.

What is a startup?

The definition of startups was modified in 2019 with a view to include more entrepreneurs in its ambit. 

An entity shall be considered as a startup:

i) If it is incorporated as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership firm (under Section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) in India.

ii) Up to ten years from the date of its incorporation/registration.

iii) If its turnover for any of the financial years since incorporation/registration has not exceeded Rs 100 crore.

iv) If it is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.

Key points on Startup India:

• Launched as a flagship initiative of the government of India in 2016, Startup India aimed to nurture innovation and catalyse the growth of startups across the country.

• With more than 1.59 lakh startups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT) as of January 15, 2025, India has firmly established itself as the third-largest startup ecosystem in the world.

• This 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.

• Startups in fintech, edtech, health-tech, and e-commerce have tackled local challenges and gained global recognition.

Features of the Startup India Initiative

• Ease of Doing Business: Simplified compliance, self-certification, and single-window clearances streamline processes for startups.

• Tax Benefits: Eligible startups enjoy tax exemptions for three consecutive financial years.

• Funding Support: The Rs 10,000 crore Fund of Funds for Startups (FFS) supports early-stage funding.

• Sector-Specific Policies: Focused policies for sectors like biotechnology, agriculture, and renewable energy foster targeted growth.

Major milestones of Startup India:

• Over the past nine years, the Startup India initiative has played a pivotal role in shaping a vibrant entrepreneurial ecosystem in the country. By fostering innovation and inclusivity, it has achieved remarkable milestones that highlight its impact on India’s economy and society.

• The number of DPIIT-recognised startups has grown from around 500 in 2016 to 1,59,157 as of January 15, 2025.

• As 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.

Industry-wise jobs created by startups

• 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 & life sciences 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.

Flagship schemes implemented under Startup India

• The Startup India initiative has launched various flagship schemes to provide comprehensive support to startups across different stages of their journey. 

• These schemes aim to address critical areas such as funding, market access, and credit guarantees, ensuring the growth and sustainability of startups.

1) Startup India Seed Fund Scheme (SISFS)

• The Startup India Seed Fund Scheme (SISFS) has been approved for the period of four years starting from 2021-22.

• The Scheme aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialisation.

• It is implemented with effect from April 1, 2021 with a corpus of Rs 945 crore.

2) Credit Guarantee Scheme for Startups (CGSS)

• CGSS is aimed at providing credit guarantee up to a specified limit against loans extended by Member Institutions (MIs) to finance eligible borrowers, that is startups.

• The credit guarantee cover under the scheme would be transaction based and umbrella based. The exposure to individual cases would be capped at Rs 10 crore per case or the actual outstanding credit amount, whichever is less.

3) Fund of Funds for Startups (FFS) Scheme

• The government has established FFS with corpus of Rs 10,000 crore, to meet the funding needs of startups.

• DPIIT is the monitoring agency and Small Industries Development Bank of India (SIDBI) is the operating agency for FFS. The total corpus of Rs  10,000 crore is envisaged to be provided over the 14th and 15th Finance Commission cycles based on progress of the scheme and availability of funds.

• It has not only made capital available for startups at early stage, seed stage and growth stage but also played a catalytic role in facilitating raising of domestic capital, reducing dependence on foreign capital and encouraging home grown and new venture capital funds.

Manorama Yearbook app is now available on Google Play Store and iOS App Store