Over the past 30 years, there has been significant proliferation of new and emerging enterprises driving innovation and creating employment opportunities, thus expediting socio-economic development.
Recognising their disruptive potential in taking India’s growth trajectory to new horizons, the government launched its flagship ‘Startup India’ scheme on January 16, 2016, to create an ecosystem for start-ups.
A host of other initiatives such as Standup India, ASPIRE, Tax Breaks, Atal Innovation Mission and the like have been introduced to raise the entrepreneurial spirit in today’s youth.
India is the world’s third largest ecosystem for start-ups after the US and China. In 2022, it had around 70,000 registered start-ups (from 471 in 2016), of which, 100 start-ups acquired ‘unicorn’ status having a valuation of $1 billion and above. The Department for Promotion of Industry and Internal Trade (DPIIT) has recognised that start-ups have created of over nine lakh direct jobs from 2016 to 2022. Today, start-ups in India are making their mark in key strategic sectors such as space and defence.
In strategic sectors
With the liberalisation of the space sector, start-ups can pave the way for robust space tourism and exploration, cooperating with Indian Space Research Organisation (ISRO). India witnessed a new beginning in November, when Skyroot Aerospace, a space start-up launched the first private rocket ‘Vikram-S’. Another start-up, ‘Agnikul Cosmos’, is developing a first of its kind launch vehicle.
In the defence sector, start-ups manufacturing military equipment will go a long way in reducing import dependence for arms and pave the way for self-reliance for maintaining strategic autonomy. Start-ups are also leading the way in developing drones, precision artillery and other technical equipment through innovative technologies like Internet of Things, artificial intelligence, machine learning, etc. Edtech start-ups such as Byjus, Unacademy, etc., have played a key role in making digital education accessible during the Covid-19 lockdown period.
Fintech start-ups such as PayTM, MobiKwik, etc., have revolutionised the digital payment ecosystem and have contributed immensely in making a less-cash economy a reality. Through fintech start-ups, the government can realise the goal of financial inclusion and empowerment of the vulnerable with digital transfers.
Start-ups can power the gig economy, that is characterised by contractual, part-time and freelance workforce in sectors such as food delivery, urban taxi services, healthcare. Companies such as Zomato, Swiggy, Ola, Uber, etc., have made it easier for people to access goods and services with the click of the button. By 2024, the gig sector is expected to account for about 4 per cent of India’s total workforce, as per a report. The sector is expected to employ as many as 2.35 crore workers by 2024.
Through e-commerce and m-commerce, emerging start-ups have contributed immensely in bringing about “ease of living” for people whilst providing economic succour to the many low-skilled youth. Similarly, many agri-tech start-ups are helping to ameliorate the problems farmers in the hinterland face.
According to a report by Stride One, start-ups have the potential to contribute 4-5 percent to country’s GDP over the next 3-5 years. Similarly, they will be playing a critical role in realising India’s goal of becoming a $5 trillion economy.
It has to, however, overcome challenges such as complex regulatory environment, lack of trained/skilled workforce, challenging macroeconomic environment, market risks due to economic uncertainty, inadequate mentoring, lack of infrastructure in tier-2 cities, digital inequality and rural-urban divide.
A Start-Up-20 engagement group has been created to enable start-up participation in setting the global agenda.
The writer teaches at MBM University, Jodhpur