Start-up registrations near 100K-mark, no. of new ventures up since Covid

Top 5 sectors, including IT services, and health care, account for third of registered start-ups

The number of government-registered start-ups is nearing the six-figure mark, and stands at 98,927 as of May 9, according to the latest data on the Startup India website.

India has added 12,214 start-ups so far in 2023, shows an analysis of data previously shared in parliament and latest figures. The government had noted that there were 86,713 start-ups as of December-end 2022. This means that India added start-ups at the rate of over 90 a day in this calendar year (chart 1).

Registration of start-ups with the Department for Promotion of Industry and Internal Trade (DPIIT) helps avoid the so-called angel tax. The angel tax is when the government imposes a tax on investments that start-ups receive. The tax department reportedly saw the angel tax as a measure to prevent money laundering using inflated start-up valuations. This, however, also affected genuine start-ups whose valuations can rise significantly as they scale up.

Not all sectors have received equal attention from start-up founders. Of more than 50 sectors, just five: information technology services; health care and lifesciences; education; agriculture; and food and beverages account for around a third of the registered start-ups (chart 2). The others in the top ten sectors include professional and commercial services, construction, technology hardware, finance technology and renewable energy. The top ten accounted for 56 per cent of start-ups as of February.

State-wise numbers also reveal some evidence of concentration. Analysis shows that Maharashtra, Karnataka, Delhi and Uttar Pradesh have emerged as preferred start-up destinations, accounting for half of all new registrations and a similar share of the resultant employment. Others in the top ten list of start-up states include Gujarat, Haryana, Tamil Nadu, Telangana, Kerala and West Bengal. The top ten states account for 82 per cent of start-up registrations.

Maharashtra provides the most employment via start-ups, according to government figures. It shows generation of 51,357 jobs, followed by Delhi (30,083) and Karnataka (24,487). Gujarat is ahead in terms of people employed with 23,832, compared to 22,969 in Uttar Pradesh. Tamil Nadu, Telangana, Haryana, Madhya Pradesh and Rajasthan are the others in the top ten list in terms of employment generation through start-ups. The top ten account for over 80 per cent of the jobs generated. (chart 3)