Lok Sabha Question No. 83 (STARRED), answered on 2024-02-08
Subject: Startup Companies
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Dr. T. Sumathy (a) Thamizhachi Thangapandian

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA STARRED QUESTION NO. *83 TO BE ANSWERED ON 08.02.2024

## STARTUP COMPANIES

| *83.                                                                          | DR. T. SUMATHY (a) THAMIZHACHI THANGAPANDIAN:                                                                                                           |
|-------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
| Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state: | Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:                                                                           |
| (a) award                                                                     | whether the Ministry is aware that TamilNadu State has been awarded the 'Best Performer' in the State`s startup ranking and if so, the details thereof; |
| (b)                                                                           | the details of other States on the number of startup companies registered in 2022, State-wise;                                                          |
| (c) communities                                                               | whether the Government has initiated any startup fund for promoting the marginalized including Scheduled Castes and Scheduled Tribes; and               |
| (d)                                                                           | if so, the details thereof and if not, the reasons therefor?                                                                                            |
| ANSWER                                                                        | ANSWER                                                                                                                                                  |
| MINISTER OF MICRO, SMALLAND MEDIUM ENTERPRISES                                | MINISTER OF MICRO, SMALLAND MEDIUM ENTERPRISES                                                                                                          |
| (SHRINARAYAN RANE)                                                            | (SHRINARAYAN RANE)                                                                                                                                      |
| (a) to (d): A statement is laid on the Table of the House.                    | (a) to (d): A statement is laid on the Table of the House.                                                                                              |

## STATEMENT REFERRED TO IN REPLY TO LOK SABHA STARRED QUESTION NO. *83 FOR 08.02.2024 REGARDING STARTUP COMPANIES.

- (a): The  Government  under  the  Startup  India  initiative  launched  the  States'  Startup  Ranking Framework (SRF) to categorise States and Union Territories (UTs) on the basis of policy measures being  taken  by  them  to  promote  their  startup  ecosystems.  So  far,  four  such  exercises  have  been undertaken by the Department for Promotion of  Industry and  Internal Trade (DPIIT).  In  the most recent edition i.e., SRF 2022 the participating States and UTs have been grouped in five categories viz. Best Performer, Top Performer, Leader, Aspiring Leader, and Emerging Ecosystems. As per the results declared for SRF 2022, the State of Tamil Nadu has been categorized as a 'Best Performer'.
- (b): As per eligibility conditions prescribed under G.S.R. notification 127 (E) dated 19th February 2019,  entities  are  recognized  as  'startups'  under  Startup  India  initiative  by  the  Department  for Promotion of Industry and Internal Trade (DPIIT). Since the launch of the Startup India initiative in 2016, DPIIT has recognized 1,17,254 entities as startups as on 31st December 2023.The State/UTwise number of DPIIT recognised startups in 2022 are placed as Annexure-I.
- (c)&(d): Ministry of Social Justice and Empowerment is implementing a Venture Capital Fund for Scheduled Castes intended for financial assistance to Scheduled Caste (VCF-SC) Entrepreneurs under which up-to 75% of the project cost are funded for startups. Ministry of Social Justice and Empowerment also implements Ambedkar Social Innovation and Incubation Mission (ASIIM) under VCF-SC which is being implemented by IFCI Venture Capital Funds Ltd. through which financial assistance up-to Rs. 30 lakh is provided over a period of three years. Ministry of Tribal Affairs has approved Venture Capital Fund (VCF) for Scheduled Tribes with a corpus of Rs. 50 Crore under which  up-to  75%  of  the  project  cost  are  funded  for  startups.The  details  of  various  programs undertaken  by  the  Government  to  promote  startups  under  the  Startup  India  initiative  across  the country are placed as Annexure-II.

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## State/UT-wise number of recognised startups for the year 2022 are as under:

| S. No   | States/ UTs                              | NOs in 2022   | Cumulative   |
|---------|------------------------------------------|---------------|--------------|
| 1.      | Andaman and Nicobar Islands              | 9             | 52           |
| 2.      | Andhra Pradesh                           | 382           | 1,846        |
| 3.      | Arunachal Pradesh                        | 9             | 33           |
| 4.      | Assam                                    | 282           | 1,087        |
| 5.      | Bihar                                    | 517           | 2,237        |
| 6.      | Chandigarh                               | 81            | 404          |
| 7.      | Chhattisgarh                             | 233           | 1,213        |
| 8.      | Dadra and Nagar Haveli and Daman and Diu | 12            | 48           |
| 9.      | Delhi                                    | 2,548         | 12,500       |
| 10.     | Goa                                      | 104           | 439          |
| 11.     | Gujarat                                  | 2,262         | 9,267        |
| 12.     | Haryana                                  | 1,327         | 6,196        |
| 13.     | Himachal Pradesh                         | 117           | 405          |
| 14.     | Jammu and Kashmir                        | 167           | 677          |
| 15.     | Jharkhand                                | 232           | 1,083        |
| 16.     | Karnataka                                | 2,546         | 12,651       |
| 17.     | Kerala                                   | 1,070         | 4,962        |
| 18.     | Ladakh                                   | 4             | 9            |
| 19.     | Lakshadweep                              | 0             | 3            |
| 20.     | Madhya Pradesh                           | 891           | 3,731        |
| 21.     | Maharashtra                              | 4,763         | 21,063       |
| 22.     | Manipur                                  | 31            | 112          |
| 23.     | Meghalaya                                | 10            | 41           |
| 24.     | Mizoram                                  | 6             | 24           |
| 25.     | Nagaland                                 | 7             | 47           |
| 26.     | Odisha                                   | 442           | 2,081        |
| 27.     | Puducherry                               | 29            | 126          |
| 28.     | Punjab                                   | 294           | 1,282        |
| 29.     | Rajasthan                                | 986           | 4,132        |
| 30.     | Sikkim                                   | 2             | 10           |
| 31.     | Tamil Nadu                               | 1,791         | 7,559        |
| 32.     | Telangana                                | 1,370         | 6,090        |
| 33.     | Tripura                                  | 25            | 84           |
| 34.     | Uttar Pradesh                            | 2,554         | 10,970       |
| 35.     | Uttarakhand                              | 236           | 958          |
| 36.     | West Bengal                              | 991           | 3,832        |
|         | Grand Total                              | 26,330        | 1,17,254     |

The  details  of  various  programs  undertaken  by  the  Government  under  the  Startup  India initiative to promote startups 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-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.
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 vis-a-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 around 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 onehour  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. 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.