The Startup India initiative

How lack of representation for marginalised groups as well as the heavy clustering of start-ups in certain regions have led to entrepreneurial disparities

Anish Tiwari, Colm O’Gorman and Teresa Hogan, ‘ The good, the bad, and the ugly of ‘Startup India’ — a review of India’s entrepreneurship policy’ , Economic & Political Weekly (EPW), Vol (50), 2021.

A research paper from Dublin City University in Ireland, reviewing India’s entrepreneurial policy Startup India, affirmed its positive impact in reducing regional entrepreneurial disparities. However, it cited shortcomings in addressing the under-representation of women and marginalised caste groups in the national startup ecosystem. The paper was published in the Economic and Political Weekly in December 2021. Startup India was introduced in 2016 as a “clarion call to innovators, entrepreneurs, and thinkers of the nation to lead from the front in driving India’s sustainable growth and create large scale employment opportunities.”

Minister for Commerce and Industry Piyush Goyal informed the Lok Sabha the other week that the entrepreneurial portal had more than 65,000 startups registered. Of which, 40 attained the ‘unicorn’ status in the last twelve months, bringing the total as of date to 90. He stated that India ranked third among global startup eco-systems.

The evidence collated by authors of the research paper suggested that the networking, training and mentoring facilities provided by Startup India alongside entrepreneurship outreach campaigns in tier-2 and tier-3 cities, helped address regional entrepreneurial disparities in India. The program was aimed at scouting entrepreneurs from these cities and integrate them into the portal. It would then facilitate a network between venture capital funds, angel networks, banks, incubators, accelerators, universities, legal partners, consultants and research & development institutions.

The paper states the initiative helped redirect many State govts’ policymaking in favour of startups. Quoting from Startup India’s Report (2018), the researchers mention, only four States had dedicated startup policies prior to its launch. After its launch and as of December 2019, 23 States and 2 Union Territories had formulated a dedicated startup policy.

Despite the initiative, the researchers pointed out that entrepreneurship continued to be “highly concentrated” in three megacities, namely, Mumbai, Bengaluru and Delhi NCR. The three cities accounted for 93% of all funding raised between 2014 and 2019. The paper pointed out that India’s venture capital industry is also clustered in and around these three cities.

The same notion was established by the Reserve Bank of India (RBI) in its Pilot Survey on the Indian Startup Sector (2019). The research involving 1,246 participants stated nearly three-fourths of the participants were from Karnataka, Maharashtra, Telangana, Delhi and Tamil Nadu.