Given the fact that government-registered startups have spread to 630 districts and that their total number has reached 56,000 and counting, the Centre has begun looking into ways to strengthen the existing regulatory and legal architecture, believing that they are a major source of livelihood and entrepreneurship creation.
In each of the 630 districts, there is at least one startup, according to data available from the Department for the Promotion of Industry and Internal Trade (DPIIT).
The Department of Industrial and Information Technology (DPIIT) is working on the next set of measures and has held conversations with state-run banks about how they can consider lending to startups after factoring in the risks involved. To cope with this, “there are a variety of measures available, and the department has discussed some of these options with banks, including the possibility of banks taking a piece of the upside afterward,” an official source told TOI. The topic had even come up during a recent conference of the heads of state-owned banks, which was organized by the finance ministry, and was discussed there.
As evidence, the government notes that India has the third-largest ecosystem in the world, with more than 70 unicorns, including more than 40 that have been launched this year alone, and that equity is not a constraint. Additionally, Sidbi had formed a fund of funds in addition to raising funding from private sources.
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Over the course of nearly six years, the government launched a massive startup campaign, and the DPIIT is attempting to carry that process forward, with some of the issues confronting the system expected to be addressed, such as tax-related issues and flipping, which has seen several startups relocate out of the country in search of lower tax liability.
According to sources, the DPIIT has planned a week-long Innovation Week in early January to coincide with the sixth anniversary of Startup India, which was launched by Prime Minister Narendra Modi. During the week, IITs will be linked with those who provide funding, and the 190 finalists of the Startup awards will also make a pitch to investors.
