Before the start-up era took precedence, traditional businesses were usually the go-to. With a lot of technological advancements coming up, IT industry started to prosper and with that, came the age of Start-ups. The main difference between a start-up and traditional business is their main goals.
While traditional businesses aim for profitability and long-term stability, start-ups usually aim for top-end revenue and growth potential. Start-ups are risky but can be very rewarding as well. This culture enticed and motivated a lot of people. Thus, began the Start-up era.
According to the Economic Survey, India has been ranked third in the global start-up ecosystem. This marks a significant increase in the popularity of start-ups which was hanging by the threads earlier. National Association of Software and Services Company (NASSCOM) said that start-ups in India saw a 108 per cent growth in total funding from USD two billion in 2017 to USD 4.2 billion in 2018.
With unemployment levels rising to a new height, more push is given to start-ups so that it may create employment opportunities and compensate fairly. India saw more than 1200 start-ups in 2018 according to NASSCOM. But the reports show that the seed stage funding of Indian start-ups has declined from USD 191 million in 2017 to USD 151 million in 2018. In the words of Amitabh Ghosh, director of NASSCOM,
“If you fall at the seed stage, innovation is hit. It is the area, which needs protection.”
On 15 th August 2015, Narendra Modi launched a campaign called Startup India, an initiative by the government of India. Under the Startup India Scheme, eligible companies can get recognized as Startups by DPIIT to access a host of tax benefits, easier compliance, IPR fast-tracking & more. According to the reports, between 2016-2019, 15,113 startups were recognised under the Startup India programme across 492 districts in 29 states and six Union territories.
While the reports showcase glowing numbers, things aren’t as good as it seems. Out of 1368 applications received by Startup India by mid-December in 2017, only 502application forms recognized them as ‘startups’ by the Department of Industry Policy and Promotion (DIPP). The delay and lack of efficiency caused many startups to crash down.
While this remains a difficult point to venture, it has benefitted and directed a lot of startupsin the right direction. Oyo Rooms followed by Byju’s Classes and Paytm mall were among the top start-ups that raised the most capital in 2018.
Indian Budget 2019 also gave a major boost to the Startup sector. Nirmala Sitharaman,finance minister of India proclaimed the incentives to, “release the entrepreneurial spirit”.
According to the budget 2019, the government will set up a new TV programme on DD, exclusively for startups in the country. This will make sure that the capitalists are aware of the new and upcoming startups so that proper investment can be facilitated. Changes across labour laws, education, rental housing, etc. will have a direct influence on startups in the country.
With agricultural sector being a focus of the budget 2019, the government will help set up around 80 “livelihood business incubators” and 20 tech business incubators in FY19-20, which according to Sitharaman will help to create 75,000 skilled entrepreneurs in agricultural industry sectors. This will help increase employment opportunities too, which is a major problem for India.
How have start-ups effected our country’s economy?
For a start, it brings new innovations into being. With innovative ideas hitting the market, it induces a competitive edge which makes India a more lucrative spot for investment.
It also creates plenty employment opportunities. As the statistics prove, successful startups like Oyo Rooms, Byju Classes, etc bring in a lot of money, boosting up the wealth index. Start- ups also empower and motivate people to discover success on their own. They stimulate forward thinking and technological development which helps the economy to prosper.
A sense of entrepreneurship and feeling of ‘being your own boss’ develops among the people, which inspires and motivates the public to do something unique, different and empowering. It keeps the economy growing, healthy and prospering.
Written by Sonal for The Connectere