8 years of Startup India- How PM Modi’s pet startup initiative performed so far

8 years of Startup India: How PM Modi’s pet startup initiative performed so far

Launched on January 16, 2016, by Prime Minister Narendra Modi, the Startup India initiative focused on building a strong ecosystem for nurturing innovation among startups and encouraging investments in the startup ecosystem of the country. Under the Startup India initiative, startups need to register with the Commerce Ministry’s Department for Promotion of Industry and Internal Trade (DPIIT) to access a host of tax benefits, easier compliance, IPR fast-tracking and more.

As of January 8, over 1.17 lakh startups in India were registered with DPIIT and 2,977 received income tax exemptions while 3,682 startups were funded till date under the SIDBI Fund of Funds scheme which was established in 2016 with a corpus of Rs 10,000 crore, according to the data available on the Startup India portal.

Under its Fund of Funds for Startups (FFS) scheme, the government committed about Rs 10,229 crore to 129 Alternative Investment Funds (AIFs). A total of Rs 17,272 crore has been invested by the AIFs in 915 startups, as per the review.

FFS doesn’t invest directly in startups, instead capital is provided to SEBI-registered Alternative Investment Funds (AIFs), known as daughter funds, who in turn invest money in growing Indian startups through equity and equity-linked instruments.

Under the Startup India Seed Fund Scheme (SISFS), another flagship scheme of the Startup India programme, Rs 747 crore has been approved to 192 incubators who have put Rs 291 crore in 1,579 startups. The scheme aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization.

Startups looking to register with DPIIT should be operational for not more than 10 years from the date of incorporation. Also, the company should be incorporated as a private limited company or a registered partnership firm or a limited liability partnership with an annual turnover not exceeding Rs 100 crore for any of the financial years since its Incorporation.

Moreover, startups should not have been formed by splitting up or reconstructing an already existing business and should work towards the development or improvement of a product, process or service and/or have a scalable business model with high potential for the creation of wealth & employment, according to the programme’s website.