PM Modi’s Startup India: Govt recognised startups jump 85X in 4 years even as YoY growth rate contracts

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February 17, 2021 1:43 PM

The latest overall tally of recognised startups as of February 17, 2021, has crossed the 44,000-mark. The annual number of such startups scaled to 5,420 in 2017 followed by 8,946 startups in 2018, 11,683 startups in 2019, and 14,778 startups in 2020.

Startup ecosystem in IndiaRegistration with the Startup India portal is different from registration for DPIIT recognition.

The number of government-recognized startups, under the Startup India initiative launched by Prime Minister Narendra Modi in January 2016, has grown nearly 85X. Registered with the Department for Promotion of Industry and Internal Trade (DPIIT), the number of startups has increased from 504 in 2016 to overall 42,733 startups in 2020, according to the Commerce Ministry’s data. The annual number of recognised startups scaled to 5,420 in 2017 followed by 8,946 startups in 2018, 11,683 startups in 2019, and 14,778 startups in 2020. However, the year-on-year growth rate has contracted sharply from 975 per cent in 2016-17 to 65 per cent in 2017-18, 30.5 per cent in 2018-19, and 26.5 per cent in 2019-20.

According to the data shared by the Ministry of Commerce with Financial Express Online earlier, 8,939 startups were recognized till March 2018. As of January 27, 2021, the number of recognised startups in the new year stood at 1,402, MoS Commerce and Industry Som Parkash said sharing data on the annual number of recognised startups in a written reply to a question in the Lok Sabha recently. Nonetheless, the latest tally of recognised startups as of February 17, 2021, has crossed the 44,000-mark, according to the data from the Startup India platform.

The government also enables investment in recognised startups via SIDBI’s Rs 10,000 crore Fund of Funds for Startups (FFS). Financial Express Online had reported last week that FFS has enabled Rs 5,089.55 crore funding into 391 government-recognised startups as of January 31, 2021. However, the jump in the number of funded startups was only 22 per cent from 320 startups backed under the programme as of February 18, 2020. Dunzo, CureFit, FreshToHome, Jumbotail, Unacademy, Uniphore, Vedantu, Vogo, Zostel, etc., were some of the notable startups funded through FFS.

Also read: Facebook-backed edtech unicorn Unacademy’s acquisition spree continues with TapChief purchase

Importantly, registration with the Startup India portal is different from registration for DPIIT recognition. Startup India portal-registered startups don’t qualify for DPIIT benefits even as they can apply for various acceleration, incubator programmes, and other challenges on the website along with accessing resources such as like learning and development programmes, government schemes, state policies for startups, and more. Startups are required to apply separately to avail other benefits such as access to intellectual property services, relaxation in public procurement norms, easy winding of company, access to SIDBI Fund of Funds.

Eligible startups should be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership with a turnover of less than Rs 100 crores in any of the previous financial years. The government currently considers an entity a startup only up to 10 years from the date of its incorporation and that it should be working towards innovation or improvement of existing products, services, and processes, and should have the potential to generate employment and create wealth.

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