 "Startup India initiative sparks nation's modern entrepreneurial revolution")
Highly successful countries have one thing in common – a vibrant entrepreneurial ecosystem. And it’s not a coincidence, because global studies have shown that startups are key drivers of innovation, employment, and economic growth.
India has historically been an entrepreneurial nation, accounting for 25–35 per cent of global GDP through the centuries, until colonisation and then socialism killed the spirit of enterprise and brought the country to its knees. So, Prime Minister Modi’s clarion call with the launch of Startup India in 2016 was a far more significant event than most people realise. It resurrected our old DNA – and how! From under 500 DPIIT-registered startups in 2016, there are now close to 1,50,000, and India is today the world’s third-largest startup ecosystem, with over 100 unicorns.
A slew of supportive measures has made this possible. Reduced compliance burdens, increased ease of doing business, and the abolition of the “angel tax” are just a few. The GEM portal, set up in 2016 to provide access to government procurement, has already registered close to 27,000 startups and has been pivotal in mainstreaming startups in large government and public sector projects, facilitating public procurements worth over Rs 10 trillion ($120 billion). It is now the world’s second-largest government procurement platform after South Korea’s KONEPS.
The Rs 10,000 crore Startup Fund of Funds, managed by SIDBI, pulled in an additional Rs 60,000 crore of private capital and spawned a huge domestic VC industry. The PM’s encouragement has led to more government funds of funds at the central and state levels. PSUs have followed suit, and even corporates and family offices have waded in. The domestic pool of risk capital, virtually non-existent a decade ago, is over $10 billion today, reducing dependence on foreign capital. The government has been busy opening more sectors for startups, such as defence through IDEX, space through IN-SPACe, and has focused on specific programmes and missions in emerging areas like EVs, green hydrogen, renewable energy, AI, quantum computing, and several others.
In effect, the role of the Prime Minister as chief startup evangelist has evolved into the mainstreaming of entrepreneurship. And intent has been backed by political will. Where the word “startup” had not figured in any budget before this government, every Union Budget in the past decade has featured proposals to enable startups to find their feet or pry open technology opportunities. All of this encouragement and support from the government, led by the PM himself, has led to some very important outcomes that bode extremely well for the country.
Startups now have a plethora of opportunities beyond the internet, SaaS, AI, etc. – in space, defence, biotech, semiconductors, agritech, and more. Many successes are already visible. A rapidly growing middle class allows Indian companies to build major consumer brands and even take them overseas. The government has created a digital public infrastructure such as UID, UPI, and ONDC, which is the envy of the world and creates myriad opportunities for startups. Access to funding, both debt and equity, has increased dramatically. The media today actively celebrates startups in both print and television. Doing a startup is now aspirational, and the best and brightest of the country prefer this over a job. The quality of founders, the boldness of their propositions, and their breadth of global ambitions now rival Silicon Valley!
Our startups are now doing both – building in India for the world and, simultaneously, viewing our many challenges in agriculture, healthcare, environment, etc., as opportunities and leveraging technology and innovative business models to solve them at scale. We have now let the genie out of the bottle and unleashed India’s biggest engine for employment and economic growth. I believe that by 2047, we will have a million startups, and they will be a key driver of Viksit Bharat. (The author is co-founder of Indian Angel Network (IAN) & Former Chairman of Nasscom. Views expressed are personal)
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