Lok Sabha Question No. 2410 (UNSTARRED), answered on 2023-03-15
Subject: Contribution of Startups
Ministry: COMMERCE AND INDUSTRY
Asked by: Gowdar Mallikarjunappa Siddeshwara

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE

## LOK SABHA

## UNSTARRED QUESTION NO. 2410. TO BE ANSWERED ON WEDNESDAY, THE 15 TH  MARCH, 2023.

## CONTRIBUTION OF STARTUPS

## 2410.  SHRI G.M. SIDDESHWAR:

Will the Minister of COMMERCE AND INDUSTRY be pleased to state:

## वाणिज्य एवं उद्योग मंत्री

- (a) whether the Startups are contributing in areas like rapidly increasing urbanization, smart mobility, digitization of rural India, drone, agriculture and health in the country;
- (b) if so, the details thereof;
- (c) whether the Government proposes to take local Startups to the global level; and
- (d) if so, the details of the efforts made by the Government in this direction?

## ANSWER

## वाणिज्य एवं उद्योग मंत्रालय में राज्य मंत्री ( श्री सोम प्रकाश ) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY (SHRI SOM PARKASH)

- (a) & (b): Startups and the entire innovation ecosystem are the engines of growth for any country.  Recognizing  this  aspect,  the  Government  launched  Startup  India initiative on 16th January 2016 with an aim to build a stronger ecosystem for nurturing India's startup culture that would further drive our economic growth, support entrepreneurship, and enable large-scale employment opportunities.

Sustained Government efforts in this direction have resulted in increasing   the number of recognised startups from 442 in 2016 to 92,683 in 2023 (as   on 28 th February 2023).

Startups, have actively contributed in Government's flagship programs such as Atal  Mission  for  Rejuvenation  and  Urban  Transformation  (AMRUT),  Smart Cities Mission, Swachh Bharat Mission, National Heritage City Development and Augmentation Yojana (HRIDAY scheme) to improve urban infrastructure and service provision.

Furthermore,  DPIIT  has  recognised  startups  which  are  spread  across  56 diversified sectors. More than 15% of these startups are in sectors such as Agriculture,  Healthcare  &  Lifesciences,  Automotive,  Telecommunication  & Networking,  Computer  Vision,  etc.  Over  7,000  recognised  startups  are  in sectors  like  Construction,  House-hold  Services,  Logistics,  Real  Estate  and

Transportation and Storage contributing towards urban concerns. Sector-wise number of startups recognised is placed at Annexure-I .

- (c) & (d): Under  the  Startup  India  initiative,  the  Government  constantly  undertakes various efforts for the development and growth of startup ecosystem across the country.

The flagship Schemes namely, Fund of Funds for Startups (FFS), Startup India Seed  Fund  Scheme  (SISFS)  and  Credit  Guarantee  Scheme  for  Startups (CGSS) are supporting startups at various stages of their business cycle to enable  startups  to  graduate  to  a  level  where  they  will  be  able  to  raise investments  from  angel  investors  or  venture  capitalists  or  seek  loans  from commercial banks or financial institutions. The Government also implements flagship  annual  exercises  and  programs  including  States'  Startup  Ranking, National Startup Awards and Innovation Week which play an important role in holistic  development  of  the  startup  ecosystem.  The  Government  through stakeholder consultations seeks regulatory and policy related recommendations  for  enhancing  ease  of  doing  business  and  reducing compliance  burden  for  startup  ecosystem.  The  Government  also  facilitates participation  and  engagement  of  Indian  startup  ecosystem  at  international platforms. Details of such programs implemented under Startup India initiative by the Government to support startup ecosystem across the country are placed as Annexure-II .

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## ANNEXURE-I

## ANNEXURE REFERRED TO IN REPLY TO  PARTS (a) and  (b)  OF  THE  LOK SABHA USTARRED QUESTION NO. 2410 FOR ANSWER ON 15.03.2023

| Sector wise number of recognized Startups as on 28th February 2023   | Sector wise number of recognized Startups as on 28th February 2023   | Sector wise number of recognized Startups as on 28th February 2023   |
|----------------------------------------------------------------------|----------------------------------------------------------------------|----------------------------------------------------------------------|
| S. No.                                                               | Industries                                                           | No. of Recognised startups                                           |
| 1                                                                    | Advertising                                                          | 673                                                                  |
| 2                                                                    | Aeronautics Aerospace & Defence                                      | 910                                                                  |
| 3                                                                    | Agriculture                                                          | 4653                                                                 |
| 4                                                                    | AI                                                                   | 1580                                                                 |
| 5                                                                    | Airport Operations                                                   | 10                                                                   |
| 6                                                                    | Analytics                                                            | 640                                                                  |
| 7                                                                    | Animation                                                            | 93                                                                   |
| 8                                                                    | AR VR (Augmented + Virtual Reality)                                  | 485                                                                  |
| 9                                                                    | Architecture Interior Design                                         | 517                                                                  |
| 10                                                                   | Art & Photography                                                    | 321                                                                  |
| 11                                                                   | Automotive                                                           | 1950                                                                 |
| 12                                                                   | Biotechnology                                                        | 260                                                                  |
| 13                                                                   | Chemicals                                                            | 813                                                                  |
| 14                                                                   | Computer Vision                                                      | 223                                                                  |
| 15                                                                   | Construction                                                         | 3873                                                                 |
| 16                                                                   | Dating Matrimonial                                                   | 81                                                                   |
| 17                                                                   | Design                                                               | 629                                                                  |
| 18                                                                   | Education                                                            | 5962                                                                 |
| 19                                                                   | Enterprise Software                                                  | 1696                                                                 |
| 20                                                                   | Events                                                               | 365                                                                  |
| 21                                                                   | Fashion                                                              | 1279                                                                 |
| 22                                                                   | Finance Technology                                                   | 2930                                                                 |
| 23                                                                   | Food & Beverages                                                     | 4523                                                                 |
| 24                                                                   | Green Technology                                                     | 2046                                                                 |
| 25                                                                   | Healthcare & Lifesciences                                            | 8691                                                                 |
| 26                                                                   | House-Hold Services                                                  | 633                                                                  |
| 27                                                                   | Human Resources                                                      | 1979                                                                 |
| 28                                                                   | Indic Language Startups                                              | 269                                                                  |
| 29                                                                   | Internet of Things                                                   | 1428                                                                 |
| 30                                                                   | IT Services                                                          | 11099                                                                |
| 31                                                                   | Logistics                                                            | 412                                                                  |
| 32                                                                   | Marketing                                                            | 1837                                                                 |
| 33                                                                   | Media & Entertainment                                                | 1426                                                                 |
| 34                                                                   | Nanotechnology                                                       | 145                                                                  |
| 35                                                                   | Non- Renewable Energy                                                | 1639                                                                 |
| 36                                                                   | Other Specialty Retailers                                            | 623                                                                  |
| 37                                                                   | Passenger Experience                                                 | 11                                                                   |
| 38                                                                   | Pets & Animals                                                       | 244                                                                  |
| 39                                                                   | Professional & Commercial Services                                   | 4506                                                                 |
| 40                                                                   | Real Estate                                                          | 810                                                                  |
| 41                                                                   | Renewable Energy                                                     | 2429                                                                 |
| 42                                                                   | Retail                                                               | 2160                                                                 |
| 43                                                                   | Robotics                                                             | 491                                                                  |
| 45                                                                   | Security Solutions                                                   | 972                                                                  |
| 46                                                                   | Social Impact                                                        | 576                                                                  |

| 47                             | Social Network     | 659    |
|--------------------------------|--------------------|--------|
| Sports                         | 453                | 48     |
| Technology Hardware            | 2934               | 49     |
| Telecommunication & Networking | 880                | 50     |
| Textiles & Apparel             | 1362               | 51     |
| Toys and Games                 | 215                | 52     |
| Transportation & Storage       | 1456               | 53     |
| Travel & Tourism               | 1436               | 54     |
| Waste Management               | 593                | 55     |
| 56                             | Not Specified 3511 |        |
| Grand                          | Total              | 92,683 |

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## ANNEXURE REFERRED TO IN REPLY TO  PARTS (c) and  (d)  OF  THE  LOK SABHA USTARRED QUESTION NO. 2410 FOR ANSWER ON 15.03.2023

## Programs Implemented under Startup India initiative

The  details  of  various  programs  undertaken  by  the  Government  to  promote startups under Startup India initiative across the country are as under:

-  Startup India Action Plan : An Action Plan for Startup India was unveiled on 16 th   January  2016.  The  Action  Plan  comprises  of  19  action  items  spanning across areas such as 'Simplification and handholding', 'Funding support and incentives'  and  'Industry-academia  partnership  and  incubation'.  The  Action Plan  laid  the  foundation  of  Government  support,  schemes  and  incentives envisaged to create a vibrant startup ecosystem in the country.
-  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 terms of facilitating raising of domestic capital, reducing dependence on foreign capital and encouraging home grown and new venture capital funds.
-  Credit  Guarantee  Scheme  for  Startups  (CGSS) :  The  Government  has established  the  Credit  Guarantee  Scheme  for  Startups  for  providing  credit guarantees  to  loans  extended  to  DPIIT  recognized  startups  by  Scheduled Commercial Banks, Non-Banking Financial Companies (NBFCs) and Venture Debt  Funds  (VDFs)  under  SEBI  registered  Alternative  Investment  Funds. CGSS is aimed at providing credit guarantee up to a specified limit against loans extended by Member Institutions (MIs) to finance eligible borrowers viz. DPIIT recognised startups.
-  Regulatory Reforms :  Over 50 regulatory reforms have been undertaken by the Government since 2016 to enhance ease of doing business, ease of raising capital and reduce compliance burden for the startup ecosystem.
-  Ease  of  Procurement :  To  enable  ease  of  procurement,  Central  Ministries/ Departments  are  directed  to  relax  conditions  of  prior  turnover  and  prior experience in public procurement for all DPIIT recognised startups subject to meeting quality and technical specifications. Further, Government eMarketplace (GeM) Startup Runway has been developed which is a dedicated corner for startups to sell products and services directly to the Government.
-  Support for Intellectual Property Protection :  Startups are eligible for fasttracked patent application examination and disposal.  The  Government launched Start-ups Intellectual Property Protection (SIPP) which facilitates the startups  to  file  applications  for  patents,  designs  and  trademarks  through registered facilitators in appropriate IP offices by paying only the statutory fees.

Facilitators under this Scheme are responsible for providing general advisory on different IPRs, and information on protecting and promoting IPRs in other countries.  The  Government  bears  the  entire  fees  of  the  facilitators  for  any number of patents, trademark or designs, and startups only bear the cost of the statutory fees payable. Startups are provided with an 80% rebate in filing of patents and 50% rebate in filling of trademark vis-a-vis other companies.

-  Self-Certification  under  Labour  and  Environmental  laws :  Startups  are allowed to self-certify their compliance under 9 Labour and 3 Environment laws for a period of 3 to 5 years from the date of incorporation.
-  Income Tax Exemption for 3 years: Startups incorporated on or after 1st April 2016 can apply for income tax exemption. The recognized startups that are granted an Inter-Ministerial Board Certificate are exempted from income-tax for a period of 3 consecutive years out of 10 years since incorporation.
-  International Market Access to Indian Startups : One of the key objectives under the Startup India initiative is to help connect Indian startup ecosystem to global startup ecosystems through various engagement models. This has been done though international Government to Government partnerships, participation in international forums and hosting of global events. Startup India has launched bridges with over 15 countries (Brazil, Sweden, Russia, Portugal, UK,  Finland,  Netherlands,  Singapore,  Israel,  Japan,  South  Korea,  Canada, Croatia, Qatar and UAE) that provides a soft-landing platform for startups from the partner nations and aid in promoting cross collaboration.
-  Faster Exit for Startups : The Government has notified Startups as 'fast track firms' enabling them to wind up operations within 90 days vis-a-vis 180 days for other companies.
-  Startup India Hub : The Government launched a Startup India Online Hub on 19 th  June 2017 which is one of its kind online platform for all stakeholders of the entrepreneurial ecosystem in India to discover, connect and engage with each other. The Online Hub hosts Startups, Investors, Funds, Mentors, Academic Institutions,  Incubators,  Accelerators,  Corporates,  Government  Bodies  and more.
-  Exemption for the Purpose Of Clause (VII)(b) of Sub-section (2) of Section 56 of the Act (2019) : A DPIIT recognized startup is eligible for exemption from the provisions of section 56(2)(viib) of the Income Tax Act.
-  Startup  India  Showcase :  Startup  India  Showcase  is  an  online  discovery platform for the most promising startups of the country chosen through various programs  for  startups  exhibited  in  a  form  of  virtual  profiles.  The  startups showcased on the platform have distinctly emerged as the best in their fields. These innovations span across various cutting-edge sectors such as Fintech, EntrepriseTech,  Social  Impact,  HealthTech,  EdTech,  among  others.  These startups are solving critical problems and have shown exceptional innovation in their respective sectors. Ecosystem stakeholders have nurtured and supported these startups, thereby validating their presence on this platform.
-  National Startup Advisory Council : The Government in January 2020 notified constitution of the National Startup Advisory Council to advise the Government on measures needed to build a strong ecosystem for nurturing innovation and startups in the country to drive sustainable economic growth and generate large scale employment opportunities. Besides the ex-officio members, the council has a number of non-official members, representing various stakeholders from the startup ecosystem.
-  Startup India: The Way  Ahead :  Startup  India:  The  Way  Ahead  at  5  years celebration of Startup India was unveiled on 16 th  January 2021 which includes actionable plans for promotion of ease of doing business for startups, greater role of technology  in executing  various reforms, building capacities of stakeholders and enabling a digital Aatmanirbhar Bharat.
-  Startup  India  Seed  Fund  Scheme  (SISFS): Easy  availability  of  capital  is essential for entrepreneurs at the early stages of growth of an enterprise. The capital  required  at  this  stage  often  presents  a  make-or-break  situation  for startups  with  good  business  ideas.  The  Scheme  aims  to  provide  financial assistance  to  startups  for  proof  of  concept,  prototype  development,  product trials, market entry and commercialization. Rs. 945 crore has been sanctioned under the SISFS Scheme for period of 4 years starting from 2021-22.
-  National Startup Awards (NSA) :  National Startup Awards is an initiative to recognize and reward outstanding startups and ecosystem enablers that are building  innovative  products or  solutions and  scalable  enterprises, with  high potential of employment generation or wealth creation, demonstrating measurable social impact. Handholding support is provided to all the finalists across various tracks viz. Investor Connect, Mentorship, Corporate Connect, Govt.  Connect,  International  Market  Access,  Regulatory  Support,  Startup Champions on Doordarshan and Startup India Showcase, etc.
-  States'  Startup  Ranking  Framework  (SRF) : States' Startup Ranking Framework is a unique initiative to harness strength of competitive federalism and create a flourishing startup ecosystem in the country. The major objectives of the ranking exercise are facilitating states to identify, learn and replace good practices, highlighting  the policy  intervention  by  states for  promoting  startup ecosystem and fostering competitiveness among states.
-  Startup  Champions  on  Doordarshan :  Startup  Champions  program  on Doordarshan is a one-hour weekly program covering stories of award winning/ nationally recognised startups. It is telecasted in both Hindi and English across Doordarshan network channels.
-  Startup  India  Innovation  Week :  The  Government  organises  Startup  India Innovation week around the National Startup Day i.e. 16 th  January, with the primary goal was to bring together the country's key startups, entrepreneurs, investors, incubators, funding entities, banks, policymakers, and other national/international stakeholders to celebrate entrepreneurship and promote innovation.

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