Lok Sabha Question No. 2959 (UNSTARRED), answered on 2023-12-20
Subject: Startups
Ministry: COMMERCE AND INDUSTRY
Asked by: Nama Nageswara Rao

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY

## DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE LOK SABHA

UNSTARRED QUESTION NO. 2959.

TO BE ANSWERED ON WEDNESDAY, THE 20 TH  DECEMBER, 2023.

## Startups

## 2959. SHRI NAMA NAGESWARA RAO:

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

- (a) whether it is a fact that most of the startups are unable to sustain due to various factors and if so, the reasons therefor;
- (b) the  details  and  the  number  of  recognized  startups  that  are  functioning  and closed across the country during the last five years, State/UT-wise;
- (c) whether  any  measures  have  been  taken  by  the  Government  to  protect  the startups reeling under pressure; and
- (d) if so, the details thereof?

## (a) ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY

## वाणिज्य एवं उद्योग मंत्रालय में राज्य मंत्री ( श्री सोम प्रकाश ) (SHRI SOM PARKASH)

- (a) to (d): The Government with an intent to build a strong ecosystem for nurturing  innovation,  startups  and  encouraging  investments launched  the  Startup  India  initiative  on  16th  January  2016. Sustained efforts under the Startup India initiative have led to an increase in the number of recognised startups from over 300 in 2016 to 1,14,902 in 2023 as on 31st October 2023.

State/Union Territory (UT)-wise number of Department for Promotion  of  Industry  and  Internal  Trade(DPIIT)  recognised startups during the last five years viz. 2018, 2019, 2020, 2021 and 2022 is placed as Annexure-I.

As  per  Ministry  of  Corporate  Affairs,  approximately  95%  of  the DPIIT-recognised startups (incorporated as either a Private Limited Company or a Limited Liability Partnership) are categorized as active as on 31 st     December 2022.

The various schemes/programs implemented by the Government under the Startup India initiative to support startups are placed as Annexure-II .

*********

## ANNEXURE-I

## ANNEXURE REFERRED TO IN REPLY TO PART (a) to (d) OF THE LOK SABHAUNSTARRED QUESTION NO. 2959 FOR ANSWER ON 20.12.2023.

State/Union Territory (UT)-wise number of DPIIT recognised startups during the last five years viz. 2018, 2019, 2020, 2021 and 2022 are as under:

| States/ UTs                              | 2018   | 2019   | 2020   | 2021   | 2022   |
|------------------------------------------|--------|--------|--------|--------|--------|
| Maharashtra                              | 1,479  | 1,997  | 2,537  | 3,566  | 4,768  |
| Karnataka                                | 1,062  | 1,578  | 1,656  | 2,087  | 2,547  |
| Delhi                                    | 1,032  | 1,309  | 1,718  | 2,137  | 2,558  |
| Uttar Pradesh                            | 676    | 809    | 1,293  | 1,881  | 2,559  |
| Gujarat                                  | 395    | 566    | 847    | 1,657  | 2,263  |
| Tamil Nadu                               | 400    | 562    | 715    | 1,068  | 1,792  |
| Haryana                                  | 434    | 663    | 787    | 1,038  | 1,327  |
| Telangana                                | 446    | 560    | 755    | 932    | 1,370  |
| Kerala                                   | 285    | 602    | 671    | 903    | 1,072  |
| Rajasthan                                | 211    | 323    | 463    | 593    | 987    |
| West Bengal                              | 242    | 276    | 364    | 649    | 991    |
| Madhya Pradesh                           | 256    | 302    | 403    | 540    | 890    |
| Bihar                                    | 126    | 137    | 237    | 377    | 518    |
| Odisha                                   | 141    | 172    | 258    | 367    | 442    |
| Andhra Pradesh                           | 137    | 162    | 215    | 286    | 382    |
| Punjab                                   | 58     | 86     | 136    | 239    | 294    |
| Chhattisgarh                             | 111    | 152    | 143    | 160    | 234    |
| Jharkhand                                | 71     | 79     | 153    | 181    | 233    |
| Assam                                    | 60     | 62     | 108    | 182    | 282    |
| Uttarakhand                              | 64     | 87     | 109    | 156    | 236    |
| Jammu and                                |        |        |        |        |        |
| Kashmir                                  | 39     | 30     | 58     | 123    | 168    |
| Goa                                      | 43     | 40     | 60     | 78     | 105    |
| Chandigarh                               | 22     | 37     | 52     | 63     | 81     |
| Himachal Pradesh                         | 15     | 27     | 40     | 55     | 117    |
| Puducherry                               | 12     | 10     | 13     | 16     | 29     |
| Manipur                                  | 7      | 3      | 10     | 33     | 31     |
| Tripura                                  | 1      | 7      | 18     | 11     | 25     |
| Andaman and Nicobar Islands              | 2      | 7      | 5      | 13     | 9      |
| Dadra and Nagar Haveli and Daman and Diu | 1      | 3      | 5      | 12     | 12     |
| Nagaland                                 | 2      | 2      | 5      | 6      | 7      |
| Meghalaya                                | 2      | 5      |        | 6      | 10     |
| Arunachal Pradesh                        | 1      | 2      |        | 4      | 9      |
| Mizoram                                  | 2      |        | 1      | 2      | 6      |
| Sikkim                                   |        | 2      | 1      | 3      | 2      |
| Ladakh                                   |        |        | 1      |        | 4      |
| Lakshadweep                              |        |        | 1      |        |        |
| Grand Total                              | 7,835  | 10,659 | 13,838 | 19,424 | 26,360 |

*********

## ANNEXURE REFERRED TO IN REPLY TO PART (a) to (d) OF THE  LOK  SABHAUNSTARRED  QUESTION  NO.  2959  FOR ANSWER ON 20.12.2023.

Details of programs implemented by the Government to support startups in the country are as under:

1. Startup  India  Action  Plan: An  Action  Plan  for  Startup  India  was unveiled on 16th 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. Startup India: The Way Ahead: Startup India: The Way Ahead at 5 years celebration of Startup India was unveiled on 16th 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.
3. 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-orbreak 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.
4. 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.
5. 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.
6. Regulatory Reforms: Over 55 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.
7. 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)  also facilitates and promotes procurement  of  products  and  services  by  the  Government  from startups.
8. 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.
9. 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.
10. Faster Exit for  Startups: The  Government has notified Startups  as 'fast track firms' enabling them to wind up operations within 90 days visa-vis 180 days for other companies.
11. 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.
12. 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.
13. Startup India Hub: The Government launched a Startup India Online Hub on 19th 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.
14. 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 20 countries that provides a soft-landing platform for startups from the partner nations and aid in promoting cross collaboration.
15. 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, EnterpriseTech, 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.
16. 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.
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, Government 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.,  16th 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.
21. 21 ASCEND: Under ASCEND (Accelerating Startup Caliber & Entrepreneurial Drive), sensitization workshops  on  startups  and entrepreneurship were  conducted for  all  eight  North  Eastern  States with  the  objective  to  capacitate  and  augment  knowledge  on  key aspects of entrepreneurship and continue efforts towards creating a robust startup ecosystem in these States.
22. The Startup India Investor Connect Portal has been co- developed under the Startup India Initiative with SIDBI, serving as an intermediary platform that links startups and investors in order to help entrepreneurs from various industries, functions, stages, regions, and backgrounds in mobilizing capital. The portal has been built with the aim to enable in particular;  early-stage  startups  located  anywhere  in  the  country  to showcase themselves to leading investors/ venture capital funds.
23. National  Mentorship  Portal  (MAARG)  : In order to facilitate accessibility to mentorship for startups in every part of the country, the Mentorship, Advisory, Assistance, Resilience, and Growth (MAARG) program has been developed and launched under the Startup India Initiative.
24. MeitY Start-up Hub (MSH): A nodal entity to interconnect deep tech startup infrastructure pan India a 'MeitY Start-up Hub' (MSH) has been set up under Ministry of Electronics & Information Technology (MeitY). MSH is assisting incubators and startups improving their scalability, market  outreach,  etc.  and  has  also  established  partnerships  with various stakeholders paving  the way  for an  economy  built  on innovation and technological advancement.
25. TIDE  2.0  Scheme: Technology  Incubation  and  Development  of Entrepreneurs (TIDE 2.0) Scheme was initiated in the year 2019 to promote tech entrepreneurship through financial and technical support to  incubators  engaged  in  supporting  ICT  startups  using  emerging technologies such as IoT, AI, Block-chain, Robotics etc. The Scheme is  being  implemented  through  51  incubators  through  a  three-tiered structure with an overarching objective to promote incubation activities at institutes of higher learning and premier R&D organisations.
26. Domain specific Centres of Excellence : MeitY has operationalised 26 Centres of Excellence (CoEs) in diverse areas of national interest for driving self-sufficiency and creating capabilities to capture new and emerging  technology  areas.  These  domain  specific  CoEs  act  as enablers  and  aid  in  making  India  an  innovation  hub  in  emerging through democratisation of innovation and realisation of prototypes.

## 27. Biotechnology  Industry  Research  Assistance  Council (BIRAC):

- An industry-academia interface agency of Department of Biotechnology, Ministry of Science & Technology is supporting biotech startups  in  all  biotech  sectors  including  clean  energy  and  emerging technologies.  Project  based  funding  is  provided  to  startups  and companies for product/technology development under its's key Schemes  including  Biotech  Ignition  Grant  (BIG),  Small  Business Innovation  Research  Initiative  (SBIRI)  and  Biotechnology  Industry Partnership  Program (BIPP). Incubation support to the  startups  and companies is also provided through Bioincubators Nurturing Entrepreneurship for Scaling Technologies (BioNEST) Scheme.
28. SAMRIDH  Scheme: MeitY  has  launched  the  'Start-up  Accelerator Program of MeitY for Product Innovation, Development  and Growth (SAMRIDH)' with an aim to support existing and upcoming Accelerators to further select and accelerate potential software product based startups to scale.
29. Next  Generation  Incubation  Scheme  (NGIS): NGIS  has  been approved  to  support  software  product  ecosystem  and  to  address  a significant portion of National Policy on Software Product (NPSP) 2019.
30. Support  for  International  Patent  Protection  in  E&IT  (SIP-EIT) Scheme: MeitY had initiated a scheme titled 'Support for International Patent  Protection  in  E&IT  (SIP-EIT)  that  encourages  international patent  filing  by  Indian  MSMEs  and  startups  so  as  to  encourage innovation  and  recognize  the  value  and  capabilities  of  global  IP. Reimbursement provided under the scheme is up to a maximum of Rs. 15 lakhs per invention or 50% of the total expenses incurred in filing and processing of patent application up to grant whichever is lesser.
31. 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 program 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 program has paved the way for startups and entrepreneur to seek support from mentors and an ecosystem that support their business growth.
32. Atal Innovation Mission: The Atal Innovation Mission (AIM) is a flagship initiative of the Government, set up by NITI Aayog to promote innovation and entrepreneurship across the length and breadth of the country.  AIM  has  established  Atal  Tinkering  Labs  (ATLs)  with  the objective  of  fostering  curiosity,  creativity  and  imagination  in  young minds  and  inculcate  skills  such  as  design  mind-set,  computational thinking,  adaptive  learning,  physical  computing,  rapid  calculations, measurements etc.
33. National  Initiative  for  Developing  and  Harnessing  Innovations (NIDHI): Department of Science and Technology (DST) had launched an  umbrella  program  called  National  Initiative  for  Developing  and Harnessing  Innovations  (NIDHI)  in  2016  for  nurturing  ideas  and innovations (knowledge-based and technology- driven) into successful startups.
34. Innovations for Defence Excellence (iDEX): iDEX was launched by the Department of Defense Production, Ministry of Defense, to achieve self-reliance  and  foster  innovation  and  technology  development  in Defense and Aerospace by engaging industries such as MSMEs and startups, R&D institutes and academia and providing grants to carry out R&D.

*********