Lok Sabha Question No. 5432 (UNSTARRED), answered on 2023-04-05
Subject: Startups
Ministry: COMMERCE AND INDUSTRY
Asked by: Ramesh Pokhriyal Nishank

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

## LOK SABHA

## UNSTARRED QUESTION NO. 5432. TO BE ANSWERED ON WEDNESDAY, THE 05 TH  APRIL, 2023.

## STARTUPS

## 5432.  DR. RAMESH POKHRIYAL 'NISHANK':

Will the Minister of COMMERCE AND INDUSTRY be pleased to state: वाणिज्य एवं उद्योग मंत्री

- (a) the number of startups set up in the country during the last five years;
- (b) the percentage of success of the said startups;
- (c) the State-wise details thereof;
- (d) the steps taken for promotion of entrepreneurship in North Eastern Himalayan States; and
- (e) the results thereof?

## 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): The  Government  with  an  intent  to  build  a  strong  ecosystem  for  nurturing innovation, startups and encouraging private investments in startup ecosystem of the country launched Startup India initiative on 16th January 2016.

As per eligibility conditions prescribed under G.S.R. notification 127 (E) dated 19th February 2019, entities are recognised as 'startups' under Startup India initiative  by  the  Department  for  Promotion  of  Industry  and  Internal  Trade (DPIIT).  Since  the  launch  of  Startup  India  initiative  in  2016,  DPIIT  has recognised 92,683 entities as startups as on 28 th  February 2023.

The number of startups recognised in the country in the last five years is as under:

| Number of entities recognised as startups by DPIIT   | Number of entities recognised as startups by DPIIT   | Number of entities recognised as startups by DPIIT   | Number of entities recognised as startups by DPIIT   | Number of entities recognised as startups by DPIIT   |
|------------------------------------------------------|------------------------------------------------------|------------------------------------------------------|------------------------------------------------------|------------------------------------------------------|
| 2018                                                 | 2019                                                 | 2020                                                 | 2021                                                 | 2022                                                 |
| 8,635                                                | 11,279                                               | 14,498                                               | 20,046                                               | 26,542                                               |

- (b) & (c): The regular businesses are often measured by success or failure in a specific number of years of operation, whereas, the startups and scale-ups (established startups) are more accurately measured by failure or success in a particular phase making it difficult  to  put  together  a  statistic  covering  all  types  of  new businesses  and  their  failure  rate  with  any  level  of  accuracy.  Therefore,  the

information with respect to the success or failure of startups is not centrally maintained by the Government.

- (d) & (e): Startup India initiative was launched on 16th January 2016 with an objective to build a strong eco-system for nurturing innovation and startups in the country that  would  drive  sustainable  economic  growth  and  generate  large  scale employment opportunities. The details of various programs undertaken by the Government  to  promote  startups  across  the  country  under  Startup  India initiative are at Annexure-I.

All the steps taken by Government to promote this initiative are inclusive and are implemented across States, cities, towns and rural areas. In addition, the Government  has  taken  various  initiatives,  specifically  for  development  of entrepreneurship in North Eastern States. The list of some of these initiatives is at Annexure-II.

Sustained Government efforts in this direction have resulted in increasing the number  of  recognised  startups  in  the  North-Eastern  States  (comprising  of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura) from 10 in 2016 to 1,110 in 2023 (as on 28th February 2023).

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## ANNEXURE REFERRED TO IN REPLY TO PARTS (d) & (e) OF THE LOK SABHA UNSTARRED QUESTION NO. 5432 FOR ANSWER ON 05.04.2023.

## 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:

- 1 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.
- 2 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.
- 3 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.
- 4 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.
- 5 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 e-Marketplace (GeM) Startup Runway  has  been  developed  which  is  a  dedicated  corner  for  startups  to  sell products and services directly to the Government.
- 6 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.
- 7 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.
- 8 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.
- 9 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 that provides a soft-landing platform for startups from the partner nations and aid in promoting cross collaboration.
- 10 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.
- 11 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.
- 12 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.
- 13 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.
- 14 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.
- 15 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.
- 16 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.
- 17 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.
- 18 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.
- 19 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.
- 20 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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## ANNEXURE REFERRED TO IN REPLY TO PARTS (d) & (e) OF THE LOK SABHA UNSTARRED QUESTION NO. 5432 FOR ANSWER ON 05.04.2023.

## List of initiatives undertaken by the Government specifically for promotion of entrepreneurship in North-Eastern States is as under:

1. ASCEND Startup Workshop Series and Women for Startups Workshops : The  Government  organized  a  series  of  startup  workshops  -  ASCEND (Accelerating Startup Calibre & Entrepreneurial Drive), for the entrepreneurs, aspiring entrepreneurs, and students from North-eastern region. In addition, the workshops are being conducted with a specific focus on women entrepreneurs across  the  north-eastern  states.  The  workshops  were  organized  during  the month of November 2022 and December 2022 in Manipur, Assam, Meghalaya, Mizoram, Arunachal Pradesh, Nagaland, Sikkim, and Tripura. The workshops witnessed  participation  of  over  11,000  ecosystem  stakeholders  such  as government  officials,  startups,  aspiring  entrepreneurs,  investors,  academic institutions, etc.
2. North-East Region Entrepreneurship & Startup Summit (NERES) : Ministry of Skill Development and Entrepreneurship organised NERES, an entrepreneurship and startup summit aimed at offering a platform to promising startups  and  aspiring  entrepreneurs  across  North-East  Region  (NER).  The objective of NERES was aimed at stirring up entrepreneurial minds across the NER states and promotes startup entrepreneurs by offering them a platform to pitch their business ideas and also addressing various challenges faced by the startups.  The  programme  provided  a  platform  for  aspiring  and  existing entrepreneurs/startups to participate and showcase their business ideas and plan. It also helped them to learn more about the good practices and network with  fellow  startups.  The  programme  has  paved  the  way  for  startups  and entrepreneur to seek support from mentors and an ecosystem that support their business growth.
3. Knowledge Exchange Workshops :  DPIIT  organized  knowledge  exchange workshops  for  dissemination  of  good  practices  and  mutual  learning  among States and UTs.
- i. In year 2018, two-days knowledge exchange workshops were organized in leading incubators in  the  country.  The  workshops  offered  an opportunity for participating States and UTs to interact with each other, exchange best practices, interact with leading Startups, investors, and incubators. State Government officials from Assam, Tripura, Manipur, and Meghalaya participated in Hyderabad (Telangana). State Government officials from Nagaland and Sikkim participated in workshop in Vishakhapatnam (Andhra Pradesh).
- ii. In year 2019, State Government officials from Mizoram participated in workshop organized in  Maharashtra.  State Government  officials from Assam,  Arunachal  Pradesh,  and  Nagaland  participated  in  workshop organized in Kerala.
- iii. International  Exposure  Visits  (2019):  with  the  objective  to  enable  the states to understand and assimilate best practices from these international ecosystems and assist in implementation of these practices in  their  respective  ecosystems,  visits  across  two  locations  -  San Francisco, California, and  Seattle,  Washington  in  the  months  of September-October 2019 were organized. Officials from Assam were a part of this delegation.
- iv. In year 2020, a 5-day virtual capacity building program was conducted in  June  2021  as  part  of  Knowledge  Exchange  Week  2021.  The workshops saw participation from over 130+ state government officials from 34 States and Union Territories of India, including all the NorthEastern States.
- v. For  the  States'  Startup  Ranking  exercise  2022,  the  Government organised  knowledge  exchange  workshop  in  Meghalaya  (Shillong)  in November 2022, wherein the he sessions were delivered by eminent speakers  from  multiple  state  governments  and  startup  ecosystem stakeholders and saw participation of government officials from across the country including from north-eastern region.
3. Startup India Yatra Initiative :  Startup India launched Startup India Yatra in 2017  to  promote  entrepreneurship  in  rural  and  non-metro  regions  across States.  Under  this  program,  grassroot  Startup  aspirants  were  provided incubation, mentorship, and  funding support. As part of the program, bootcamps  were  organized  in  tier-2  and  tier-3  districts  of  the  state  where participants attended ideation workshops and pitch their ideas.

As  a  part  of  this  initiative,  bootcamps  were  organized  in  Manipur,  Assam, Tripura, Arunachal Pradesh, Meghalaya, Mizoram, and Nagaland. More than 6600 individuals from 44 districts of these 7 states were reached under Startup Yatra. 179 incubation offers were extended along with a funding support of Rs. 20.1 lakhs.

4. WING : As a part of DPIIT's program WING - a capacity development program for  existing  and  aspiring  women  entrepreneurs was conducted in Guwahati, Assam which saw participation from 45 attendees and, in Kohima, Nagaland which saw participation from 114 attendees across two parallel workshops. The participants were given mentoring sessions in the following areas:
- i. Venture Ideation and Business Model Validation
- ii. Governance: Legal/Compliance
- iii. Marketing/Branding: Creating differential
- iv. Finance & Financial Decisions
- v. Mastering Customer Acquisition Strategy & Scaling-up

## 5. Azadi Ka Amrit Mahotsav (Startup Sensitization Training in Meghalaya & Assam ):

- i. Meghalaya :  To  commemorate  75  years  of  India's  Independence,  the Central  Government  and  State  Government  of  Meghalaya  celebrated Azadi  Ka  Amrit  Mahotsav  and  collectively  hosted  a  physical  training session  in  Shillong  on  the  25 th   September  2021.  The  session  was especially  dedicated  to  the  entrepreneurs  of  Meghalaya.  Some  of  the successful entrepreneurs of the state shared their success stories, focusing on their journey, challenges, and how they overcame it.
- ii. Assam : The Central Government along with State Government of Assam, participated  in  the  Vanijya  Utsav  celebrations  in  Assam  held  on  22 nd September 2021 at Guwahati. The Government presented on 'Schemes & Benefits  for  Startups'  and  further  participated  in  the  Startup  Bootcamp hosted for the incoming cohort 3.0 of startups chosen by Assam Startup. The Startup Bootcamp was held on 23 rd  September 2021, Assam Startup Nest.  Around  30  startups  and  more  than  100  delegates  representing multiple  government  departments  from  the  state  of  Assam  participated
3. across both the events. The sessions were instrumental in sensitizing the startups and the delegation present about the programs under the Startup India initiative.
6. Incubator  Capacity  Building  Engagement  (Mizoram) :  The  Central Government  along  with  State  Government  of  Mizoram  organized  a consultation session with incubators from Mizoram on 22 nd  October 2021 as a part of Capacity Building Program.

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