The Indian government brought schemes like Startup India, Digital Communication Innovation Square (DCIS), NITI Aayog’s Women Entrepreneurship Platform (WEP), Cent-Kalyani Scheme, Cent Stand Up India, Promoting Innovations in Individuals, Startups, and MSMEs (PRISM), and SIDBI Make in India for Enterprises (SMILE), which focus on promoting innovation, entrepreneurship, and financial support across various sectors, particularly for women, ST/SC, and MSME businesses.
All of these initiatives and schemes highlight the government’s willingness and drive to establish India as the startup hub of the world. With each passing day, more decisions of the government are focused on giving a more fertile ground for startups to grow and prosper.
As of March 14, 2024, India has 1,23,900 DPIIT-recognised startups, with at least one startup present in every state. Since 2016, the government—supported by 16 ministries with dedicated schemes—has introduced 53 regulatory reforms to enhance the startup ecosystem.
India’s startup landscape is thriving, with a record 114 unicorns as of March 2024, collectively valued at $350 billion.
Numerous measures have been put in place from all directions towards the enhancement of innovation and entrepreneurship, and Indian startups stand to gain a lot from this.
One such key benefit is the availability of resources and assistance to help startup founders create world-class products and services, creating conditions that foster a favourable scenario for startups to flourish.
Also essential is the way the initiatives can engage and empower marginalised communities. These measures result in the provision of resources, knowledge, and funding, thereby nurturing and promoting diversity in the entrepreneurial sphere. This empowerment helps in achieving gender equality, and, at the same time, contributes to economic development.
Additionally, the provision of supportive measures for innovative startups is crucial in the development of concepts into marketable businesses. Through grants and the provision of technical assistance and mentoring, entrepreneurs are equipped with essential skills to overcome challenges inherent in the commercialisation of their innovations.
Not only does this enable startups to realise their growth potential but it also promotes industrial development and innovation.
Wider availability of funds for enterprises means less capital restraints and more focus on the startup’s growth and operational efficiency. This provision of funding makes people support more of the initiatives geared towards manufacturing and economic development in the country.
The recent removal of the angel tax reflects a fundamental transformation as regards the view of the government related to startup funding assistance by angel investors.
The government seeks to encourage more investors by pointing out that there are no more taxes that were a deterrent to financing startups by angel investors—expected to ease the burden of raising funds, which, in turn, is likely to increase the level of investments.
The withdrawal of the angel tax will be beneficial as both domestic and global investors will have confidence in the Indian startup ecosystem. In one of its simplest ways, this meant less hassle for proving fair market value that normally weighed heavily on most of the promising, scale-up businesses.
Further, this does not only foster investment but, especially, sustains entrepreneurship because it shows the intention to lower the entry barriers to new business. The removal of the angel tax fosters India’s entrepreneurial ecosystem in the startup world.
The Indian government encouraged growth in the Indian startup ecosystem with various initiatives, creating an environment for innovation and entrepreneurship.
Tax policies and grants stimulate risk-taking in initiating business by the youths. In addition, university-based incubators and accelerator programmes are set up all over the country to help develop skills and provide resources.
All these measures enable startups to flourish and participate in job creation and economic growth, which makes India a powerhouse in the entrepreneurial environment of the world.
Mitesh Shah is the Co-founder of Inflection Point Ventures.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)
