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Startup India: Under Modi’s pet scheme, startup jobs jump 126%; this many companies recognised

37,171 startups have been recognised till date under the scheme out of which majority are in Delhi, Maharashtra, Karnataka, and Uttar Pradesh.

The Indian startup ecosystem is currently the third-largest following the US and China with 21 unicorns.

There has been a 126 per cent jump in the number of jobs created by DPIIT-recognised startups from April last year under the Startup India campaign launched by Prime Minister Narendra Modi in January 2016, according to the latest government data. From 1,87,004 jobs reported by 16,105 startups, as tweeted by former DPIIT Secretary Ramesh Abhishek in June last year, the figures have scaled to 4,22,986 jobs reported by 34,267 startups as of September 6, 2020, according to Commerce Minister Piyush Goyal. The minister had shared details in reply to a question in the Rajya Sabha earlier this week.

The Fund of Funds was established in January 2016 with a corpus of Rs 10,000 crore. According to Goyal, Rs 1322.05 crore was released to SIDBI as on September 9, 2020, out of which Rs 500 crore was released in 2015-16; Rs 100 crore in 2016-17; Rs 431.3044 crore in 2019-20 and Rs 290.75 crore in 2020-21. Moreover, Rs 1054.97 crore was provisioned under FFS for BE 2020-21. As on November 21, 2019, 47 SEBI registered Alternative Investment Funds (AIFs) had raised a corpus fund of Rs 25,728 crore while Rs 695.94 crore has been drawn from the FFS. Rs 2,669.83 crore were invested into 279 startups.

As of December 2019, according to Goyal, 2,85,890 jobs were reported by 23,657 startups. Currently, 37,171 startups have been recognised till date out of which majority are in Delhi (14,840), Maharashtra (18,978), Karnataka (11,587), and Uttar Pradesh (10,241), according to the real-time data available on the Startup India portal.

In terms of employment reported, Maharashtra (80,714 jobs), Karnataka (71,533 jobs), Delhi (49,497 jobs), UP (33,803 jobs), and Haryana (29,770 jobs) have been the top states, according to the data shared by Goyal.

Also read: Interview | Rs 6.9 lakh cr sitting idle in banks can be given to stressed MSMEs: Niranjan Hiranandani

Importantly, in order to boost startup investments in India, the Standing Committee on Finance chaired by BJP leader Jayant Sinha had recommended to the Centre to abolish tax on Long Term Capital Gains (LTCG) for all investments in startups. the committee had submitted a report to the Lok Sabha speaker last week noting that investments by angel funds, alternative investment funds, investment LLPs should be exempted from taxation of LTCG for at least the next two years to boost investments during the Covid pandemic. “After this 2 year period, the Securities Transaction Tax (STT) may be applied to CIVs so that revenue neutrality is maintained,” the report had said.

Also, the report further stressed on the need for multiple large domestic funds powered by domestic capital to invest in growth in the number of unicorns to avoid dependence on the US and Chinese investors. “Committee is of the opinion that SIDBI Fund-of-Funds vehicle should be expanded and fully operationalised/utilised to play an anchor investment role. SIDBI should play a pivotal role in disbursing more funds that would help startups and unicorns to scale up significantly,” the report had added.

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