Government Launches Extensive Strategy to Amplify Startup Investments

The Indian government is gearing up to bolster investments in startups, with an array of potential improvements to the existing seven-year-old Startup India program. According to a report by ET, the Department for Promotion of Industry and Internal Trade (DPIIT) is in the process of formulating an action plan that introduces performance indicators to gauge and enhance the growth and vitality of the Indian startup ecosystem.

These indicators encompass tracking investment inflows, monitoring startup numbers within specific sectors, and evaluating the generation of employment opportunities. The overarching goal is to comprehensively assess the startup landscape in India.

The action plan goes beyond data collection and analysis. It also entails addressing critical challenges that affect startups, such as regulatory approvals, taxation issues, the ease of conducting business, and the prospects for global expansion. A focal point of this initiative is the identification and removal of process bottlenecks that deter businesses, high-net-worth individuals (HNIs), and other investors from engaging with startups. Furthermore, sector-specific hurdles will be scrutinized to facilitate targeted interventions.

An official involved in the initiative emphasized the intent to formulate policy interventions and provide both short and long-term recommendations. These measures aim to streamline investments and expedite capital infusion into Indian startups.

The Indian government launched the Startup India initiative in 2016 with the aim of nurturing the startup ecosystem, fostering innovation, and promoting entrepreneurship in the country. This initiative introduced key components such as the Startup India Seed Fund Scheme (SISFS) and the Fund of Funds For Startups (FFS) scheme. These initiatives were designed to streamline capital access for startups at various stages of their development.

Earlier this year, DPIIT unveiled the inaugural edition of the 'National Incubator Capacity Building Program' under the 'Startup India' initiative. This hands-on training program is geared towards helping startup incubators grow sustainably.

Since the inception of the Startup India initiative in 2016, DPIIT has identified a staggering 99,380 entities in its quest to nurture the Indian startup ecosystem.

This initiative comes at a crucial juncture for Indian startups, as they grapple with funding challenges amidst economic and geopolitical uncertainties. Despite investors mobilizing over $22 billion for Indian startups in the past year, funding momentum has yet to regain its previous pace. According to Inc42 data, Indian startups secured $6.1 billion in funding across 528 deals as of July 28, 2023, a notable contrast to the $19 billion raised in 900 deals during the first half of 2022.