Lok Sabha Question No. 1295 (UNSTARRED), answered on 2022-12-14
Subject: Startups in UP
Ministry: COMMERCE AND INDUSTRY
Asked by: Jagdambika Pal

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

## LOK SABHA

UNSTARRED QUESTION NO. 1295. TO BE ANSWERED ON WEDNESDAY, THE 14 TH  DECEMBER, 2022.

## STARTUPS IN UP

## 1295.  SHRI JAGDAMBIKA PAL:

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

- (a) the details of the steps taken by the Government to incentivise Startup schemes in India in the last three years;
- (b) the number of Startups increased in the last five years especially in the State of Uttar Pradesh;
- (c) whether India ranked in the top ten countries to start a new Startups;
- (d) if so, details thereof and if not, the current status of India's rank; and
- (e) the details of the total number of unicorns in the country especially for the State of UP?

## 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 and startups in the country launched Startup India initiative on 16th  January  2016.  In  order  to  meet  the  objectives  of  the  initiative,  the Government  unveiled  an  Action  Plan  for  Startup  India  that  laid  the foundation of Government support, schemes and incentives envisaged to create  a  vibrant  startup  ecosystem  in  the  country.  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 measures taken by the Government to promote startups across the country, including in the last three years, are placed at Annexure-I . All the initiatives under the Startup

India are inclusive and are implemented across States, cities, towns and rural areas.

- (b): Under Startup India Initiative, entities are recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) as startups as per eligibility conditions prescribed under G.S.R. notification 127  (E) dated 19th February,  2019.  As on  30th  November 2022,  84,012  entities  have  been recognised as startups from across the country by the DPIIT.

The number of entities recognised as startups by the DPIIT in the last five years nationally and specifically from the State of Uttar Pradesh are:

|   Year | Total Number of Entities Recognised as Startups by the DPIIT   | Number of Entities Recognised as Startups by the DPIIT from the State of Uttar Pradesh   |
|--------|----------------------------------------------------------------|------------------------------------------------------------------------------------------|
|   2017 | 5,147                                                          | 385                                                                                      |
|   2018 | 8,689                                                          | 764                                                                                      |
|   2019 | 11,328                                                         | 873                                                                                      |
|   2020 | 14,534                                                         | 1,370                                                                                    |
|   2021 | 20,089                                                         | 1,966                                                                                    |

- (c) to (e): As per the Economic Survey 2021-22 (page number 314) published by the Department of Economic Affairs, Ministry of  Finance, "  Startups  in  India have  grown  remarkably  over  the  last  six  years.  The  number  of  new recognised startups have increased to over 14,000 in 2021-22 from only 733  in  2016-17.  As  a  result,  India  has  become  the  third  largest  startup ecosystem in the world after the US and China. Further, a record 44 Indian startups  have  achieved  unicorn  status  in  2021taking  the  overall  tally  of unicorns in India to 83, most of these are in the services sector".

*****

## ANNEXURE REFERRED TO IN REPLY TO PART (a) OF THE  LOK SABHA UNSTARRED QUESTION NO. 1295 FOR ANSWER ON 14.12.2022.

## Programs Launched 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,  NonBanking 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  fast-tracked 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 selfcertify 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 (Brazil, Sweden, Russia, Portugal, UK, Finland, Netherlands, Singapore, Israel, Japan, South Korea, Canada, Croatia, Qatar and UAE) that provides a softlanding  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
9. 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.

*****