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Startups recently have become a rapidly growing trend playing an important role in the economy. These startups have bought along with them, employment opportunities, creativity, and potential growth. Nevertheless, each coin has two sides. This article analyses the ‘Startup India Scheme’ an initiative by the Government of India for helping these newcomers in the economy to excel and flourish.  

On 15th August 2015, the Hon’ble Prime Minister of India announced the Startup India initiative and it was launched by the Government of India in 2016. The slogan for this movement is ‘Startup India, Stand up India’. This Startup movement plans to cover multiple sectors which include agriculture, health, etc. It also plans to expand from tier 1 cities to tier 2 and tier 3 cities. The Department for Promotion of Industry and Internal Trade (DPIIT) which comes under the Ministry of Commerce and Industry has been mandated to coordinate the implementation of the Startup India initiative along with other Government Departments. The five primary Government Departments playing an important role in taking forward this initiative are the Department of Science and Technology (DST), Department of Biotechnology (DBT), Ministry of Labour and Employment and Ministry of Corporate Affairs (MCA), Ministry of Human Resource Development (MHRD) and NITI Aayog. This initiative has its focus on three areas namely, Simplification and Handholding, Funding Support and Initiatives, and Industry-Academia Partnership and Incubation.

For any initiative to be implemented an action plan is a basic and necessary requisite. The Startup India Action Plan consists of 19 Action Points as follows:


  • Compliance Regime Based on Self-Certification
  • Startup India Hub
  • Startup India Portal and Mobile App
  • Legal Support and Fast-Tracking Patent Examination at Lower Costs.
  • Relaxed Norms of Public Procurement for Startups
  • Faster Exit for Startups


  • Funding Support through Fund of Funds (with a corpus of Rs. 10,000 crores which is managed by SIDBI)
  • Credit Guarantee Fund for Startups
  • Tax Exemption on Capital Gains
  • Tax Exemption to Startups for 3-years
  • Tax exemption on Investments above Fair Market Value


  • Organizing Startup Fests for Showcasing Innovation and Providing a Collaboration Platform
  • Launch of Atal Innovation Mission (AIM) with Self-Employment and Talent Utilization (SETU) Program
  • Harnessing Private Sector Expertise for Incubator Setup
  • Building Innovation Centres at National Institutes
  • Setting up of 7 New Research Parks
  • Promoting Startups in the Biotechnology Sector
  • Innovation Focused Programs for Students
  • Annual Incubator Grand Challenge

From January 2016 to December 2020: The Government of India has recognized a total of 41061 startups and 4,70,000 jobs were reported by more than 39,000 startups. There were 41,317 startups recognized by DPIIT. 590+ districts had at least one recognized startup. 319 eligible startups were granted an exemption under 80-IAC of the Income Tax Act. The number of jobs reported by recognized startups went from more than 49 thousand in 2017 to more than 1.7 lac in 2020. Currently, according to the Startup India website, there are 53,000+ DPIIT recognized startups and 500000+ users on the portal. According to the Startup India Kit, as of February 2021, there are 3,39,398 evangelists and entrepreneurs, 113 investors, 690 incubators, 670 mentors, 172 accelerators, 55 government bodies, and 128,862 startups.

The website of Startup India offers information from the Action Plan to various government schemes. One of the interesting schemes under this initiative is the Startup India Seed Fund Scheme.

Startup India Seed Fund Scheme:

This scheme, as the name suggests provides financial assistance to startups for various purposes like proof of concept, prototype development, product trials, market-entry, and commercialization. Startups along with creativity are in a need of funding as well. They get investments from angel investors or venture capital firms only after submitting the proof of concept. Proof of concept is a paper or document based on your research that shows the feasibility or practicality of an idea or a business plan. Once a startup is provided with financial assistance for the above-mentioned purposes, they advance to a position where they can then approach the angel investors, venture capitalists, etc. Commercial banks and financial institutions also become approachable for loans. In the operations: DPIIT (Department for Promotion of Industry and Internal Trade) is the Nodal department, the EAC (Experts Advisory Committee) consisting of government representatives and industry experts, Incubators who are government-assisted or non-government assisted and operational for at least 2-3 years and Startups (DPIIT-recognised) incorporated less than 2 years ago. There is an eligibility criterion for both, the startups as well as the incubators.

The role of women in various domains has been increasing and flourishing. Under the Startup India initiative, women’s importance and role are recognized and programs specific to women are designed. Some of the active programs on the website are – LeadHERs: Investor Mock Pitching Session, LeadHERs: Curated Workshops, Virtual Incubation Program for Women Entrepreneurs, and HexGn Startup Ready.

The Startup India initiative has many more features that can be very well explored through its website. Information regarding the initiatives by the Central Government and policies by the State Governments are also available.


INDIAN ECONOMY FOR CIVIL SERVICES, UNIVERSITIES AND OTHER examinations by Ramesh Singh (12th Revised Edition, 2020-21)


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