(GIST OF YOJANA) Startups-Revolutionising India’s growth story

(GIST OF YOJANA) Startups-Revolutionising India’s growth story


Startups-Revolutionising India’s growth story


  • In recent years, startups have emerged as a key driver of economic growth in India. With the government’s focus on promoting entrepreneurship and innovation, the startup ecosystem in India has been growing at a rapid pace. 
  • According to a report by NASSCOM, India is the third-largest startup ecosystem in the world, with over 50,000 startups. 
  • The country’s entrepreneurial ecosystem has also seen an exponential spurt in funding activities over the past few years. Indian startups raised over $25 billion in 2022 alone. 
  • Indian Unicorns are also flourishing in the fast-paced, dynamic ecosystem while developing innovative solutions and generating large-scale employment.
  • India is home to over 108 unicorns today -becoming the second-largest unicorn nation in the world.
  • These startups are revolutionising India’s growth story by creating new job opportunities, driving innovation, and contributing to the country’s GDP. 

Increased funding:

  • The spike in funding for startups was majorly led by the increased adoption of digitisation and the easy availability of capital at the early stages of growth for startups. 
  • Startup India has introduced various schemes to simplify and facilitate the process of raising funds at both early and mature stages. 
  • One such scheme, supporting early-stage funding from angel investors and venture capital firms, is the Startup India Seed Fund Scheme (SIFSS) with an outlay of Rs 945 crore, which provides financial assistance to early-stage startups for proof of concept, prototype development, product trials, market entry and commercialisation.
  • Another government scheme committed to assisting startups financially is the Fund of Funds scheme launched in 2016. 
  • Apart from the several managerial and regulatory challenges, one of the biggest problems faced by startups is easy access to early-stage debt to finance their capital requirements. Traditional lending institutions, such as commercial banks, rely on the same old mandate. 
  • The Government has established the Credit Guarantee Scheme for startups for providing credit guarantees to loans extended to DPIIT-recognised startups by Scheduled Commercial Banks, Non-Banking Financial Companies (NBFCs), and Venture Debt Funds (VDFs) under SEBI registered Alternative Investment Funds.



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Courtesy: Yojana