Startup Ranking of States for 2022

Context- The Department of Industrial Policy and Promotion has recently released the Startup Ranking of States for 2022.

About 

• States’ Start-up Ranking was released in February 2018 to acquire the vision of constructing a sturdy startup environment inside the country.
• A total of 33 states and Union territories took part in the assessment, categorised into five groups: first-class performers, top performers, leaders, aspiring leaders, and emerging start-up ecosystems.

State’s Performance in Startup Ranking (2022):

• Category A States (Population extra than 1 crore)

• Best performer: Gujarat, Karnataka, Kerala, Tamil Nadu

• Top Performer: Maharashtra, Odisha, Punjab, Rajasthan, Telangana

• Leader: Andhra Pradesh, Assam, Madhya Pradesh, Uttar Pradesh, Uttarakhand

• Aspiring states: Bihar, Haryana

• Emerging Ecosystems: Chhattisgarh, Delhi, Jammu and Kashmir

• Category B States (Population less than 1 crore)

• • Best performer: Himachal Pradesh
  • Top Performer: Arunachal Pradesh, Meghalaya
  • Leader: Goa, Manipur, Tripura
  • Aspiring states: Andaman and Nicobar Islands, Nagaland
  • Emerging Ecosystems: Chandigarh, Dadra and Nagar Haveli and Daman and Diu, Ladakh, Mizoram, Puducherry, Sikkim

Startup Ecosystem in India

• • It includes ‘a network of interconnected entities, companies, and resources that assist the growth, improvement, and achievement of Startups inside a specific geographic location’.

• Over the past seven years (2015-2022), there has been an:

• Regulating Startups in India

• • Regulatory reforms are needed to decorate ease of doing commercial enterprise, ease of raising capital and decrease compliance burden for the startup environment. These include:
    • Startups may be registered as a private limited organization, partnership corporation, or a restricted legal responsibility partnership.
    • The startup should no longer be extra than 10 years old.
    • The turnover has to be less than a hundred crores in any of the preceding monetary years.
    • A certificate of an eligible business from the Inter-Ministerial Board of Certification of DPIIT is a prerequisite for availing the tax benefits.
    • The Ministry of Labour & Employment has allowed the startups to self-certify compliance under numerous Labour Laws.

Significances of Startups

• Creating Wealth and Employment: Startups are contributing economically, getting cash, and producing employment.
  • Majority of the Startups had been developing at a price of greater than 35% the last two years.
  • About 50% of DPIIT recognized Startups are from Tier II & Tier III towns.
• Impacts on Society: Startups are growing a manifold effect in society by introducing innovative answers, growing big-scale employment, contributing to economic growth, and garnering big demand from the private as well as government sector.
• Impact on Women: Over the past 5 years, the wide variety of Startups in India which are pushed through women has extended by 4%.
  • There is at least one-girl director in about 49% of all DPIIT recognized firms.

Challenges associated with Startups in India

• High Competition: There are hundreds of startups, from e-commerce and fintech to healthcare and education, competing for investment, skills, and customers in India’s startup atmosphere.
• Regulatory Hurdles: High taxes, stringent labour legal guidelines, and bureaucratic delays in obtaining licences and permits are only a few of the regulatory obstacles startups in India need to triumph over.
  • Startups have a tough time expanding and scaling their companies because of those limitations, which can take time and money.
• Poor Infrastructure: A society’s or economy’s inadequate or insufficient physical and organisational structures, systems, and facilities are referred to as poor infrastructure.
  • Poor infrastructure consists of inadequate healthcare and educational facilities, insufficient power supply, inadequate water and sanitation, and inadequate transportation networks.
• Management and Leadership Issues: Despite getting the popularity of Best and or Top Performers, the Indian states nonetheless face challenges in incubation and mentorship aid, fostering innovation and entrepreneurship, and making plans for a sustainable future.

Related Initiatives

• • The DPIIT has implemented various flagship schemes under the Startup India initiative to help Startups at various stages of their business cycle to enable them to graduate to a level where they are able to raise investments or seek loans for a steady and healthy sustenance, like:
    • Fund of Funds for Startups (FFS);
    • Startup India Seed Fund Scheme (SISFS); and,
    • Credit Guarantee Scheme for Startups (CGSS).

• Other Initiatives:

• • Innovations for Defence Excellence (iDEX)
  • Innovation and Agri-Entrepreneurship Development Program
  • Atal Innovation Mission (AIM)
  • Promoting Innovations in Individuals, Start-usaand MSMEs (PRISM)
  • Make in India

Conclusion and Way Forward

• The government is increasingly displaying extra enthusiasm to increase the GDP rate of growth from grass root levels with introduction of liberal policies and initiatives for entrepreneurs like ‘Make in India’, ‘Startup India’, MUDRA etc.
• Continually refine and streamline regulatory tactics to make it simpler for startups to check in and operate. Introduce policies that offer tax incentives, subsidies, and other monetary aid for startups.
• Promote entrepreneurship training and talent development packages to equip aspiring entrepreneurs with the necessary knowledge and skills.

Source: The Hindu

Practice question:

Q. What term is commonly used to describe a privately-held startup valued at over $1 billion?

1. Centaur
2. Pegasus
3. Unicorn
4. Gryphon

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