Som Parkash, Minister of State for Commerce and Industry, revealed that there are 66,359 startups recognised under the Startup India initiative, which was green-flagged in 2016.
His response comes amidst a series of questions raised in the Rajya Sabha around the number of registered startups and fund allocations under the Startup India initiative during the last five years.
In his written reply to questions raised by Rajya Sabha members — Abdul Wahab and Jose K. Mani — the minister also provided a detailed year-wise breakdown of startups registered across the states and union territories from FY2017 to FY2022 until March 21 this year.
The detailed data revealed that Maharashtra has 12,333 startups registered over the years, 49.6 percent higher than Karnataka’s 8,243 startups, and 55.8 percent higher than 7,914 startups registered in Delhi.
With 5,964 and 4,378 startups each, Uttar Pradesh and Gujarat join the top five states as far as cumulative startup registrations are concerned.
Together, these top five states account for 58.5 percent of total startups in India as of March 21 this year.
Compared to just 726 registered in FY 2017, the latest fiscal’s 20,538 startups is an absolute growth of over 28 times.
As part of the questions, the two parliamentarians of the upper house quizzed the ministry about the allocation and distribution of funds under the Startup India initiative to provide funding support to startups in the country.
In his response, the minister said, while the government does not directly fund startups to provide capital at various stages of the business cycle of a startup, it has implemented the Fund of Funds for Startups (FFS) scheme and the Startup India Seed Fund Scheme (SISFS) under the Startup India initiative.
“The Fund of Funds for Startups scheme was approved and established in 2016 with a corpus of Rs 10,000 crore, with contribution spread over the 14th and 15th Finance Commission cycle based on the progress of implementation to provide a much-needed boost to the Indian startup ecosystem and enable access to domestic capital,” the minister noted.
While the FFS does not directly invest in startups, it invests in Alternative Investment Funds (AIFs), registered with market regulator the Securities and Exchange Board of India (SEBI), to make investments into startups.
Small Industries Development Bank of India (SIDBI) is the operating agency for FFS.
As of February 28, 2022, the Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, has allocated Rs 2791.29 crore to SIDBI.
In turn, SIDBI has committed Rs 6,795 crore to 82 AIFs, while Rs 8,785 crore has been invested by supported AIFs in 574 startups.
The minister also added the SISFS aims to provide financial assistance to startups for proof of concept, prototype development, product trials, entry to the market, and commercialisation.
“This would enable these startups to graduate to a level, where they will be able to raise investments from angel investors, venture capitalists, or seek loans from commercial banks or financial institutions,” the minister added.
The funds under the SISFA are released to startups through approved incubators, and Rs 945 crore has been allocated under the scheme for a period of four years, starting from FY 2022.
Earlier this year, Prime Minister Narendra Modi had announced that India will celebrate January 16 as National Startup Day to take the startup culture to the far-flung areas of the country.
While the nation will be celebrating the 75th anniversary of freedom this year, PM Modi emphasised the role of startups will be critical when India’s freedom reaches its centenary year.
Clearly, India’s Startup Inc. is growing leaps and bounds, and the startup culture has been picking up beyond the top states.