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Nearly half of the 1,15,000 startups registered with the Department for Promotion of Industry and Internal Trade (DPIIT) are located in tier-II and tier-III cities, as of December 31, 2023. States such as Gujarat, Karnataka, Kerala, and Tamil Nadu have been identified as the "best performers" in promoting a conducive startup ecosystem for Indian entrepreneurs.
The recent fourth edition of the National Startup Awards (NSA), organized by DPIIT, witnessed the participation of 2,324 startups, incubators, and accelerators. The number, however, was slightly lower than the 2,667 applications received in 2022. Notably, 58 per cent of this year's applicants hailed from tier 2 and tier 3 cities.
“India has emerged as a global powerhouse for innovation and achieved multiple milestones in 2023. Over 1.15 lakh startups have now been recognized by DPIIT, and over 12 lakh direct jobs have been created by these recognized startups,” said Union Minister of Commerce and Industry Piyush Goyal.
Surge In Tax Benefits For Recognized Startups
Amidst the boom in startups, 2,975 government-recognized startups have been granted income tax exemptions, according to DPIIT. Under the Startup India initiative, the government provides income tax benefits to eligible startups.
DPIIT Joint Secretary Sanjiv said that the number of startups receiving income tax benefits has risen from 1,100 in March 2023 to 2,975 by the year-end. To streamline the process, an SOP is being formulated for expediting applications for eligibility certificates, necessary for claiming tax exemptions.
Enhancing Ease Of Doing Business
He also mentioned plans to address pending applications, aiming to finish them by March 31. “Monthly meetings will be conducted to enhance the ease of doing business for startups, ensuring a smoother process for obtaining eligibility certificates,” the official added.
Responding to concerns about intellectual property rights, the joint secretary highlighted that 1,800 patents have been granted to budding entrepreneurs. Regarding funding challenges, he noted a shift towards debt funds, emphasizing that while equity funding may have reduced, startups are exploring alternative routes such as IPOs. The government continues to support startups through various schemes, including the Startup India seed fund scheme, fund of fund scheme, and credit guarantee scheme.
