After garnering negative attention for its recent political turmoil, Maharashtra has twin reasons to celebrate some achievements in the business domain. The state generated 1.46 lakh jobs in India in the past six years, the highest in the country. Moreover, 13,519 start-ups were registered in Maharashtra during this period, placing it head and shoulders above other states in the country.
Maharashtra was ranked as the 'top performer' in the 'Start-Up Ranking of States 2021' prepared by the Department for Promotion of Industry and Internal Trade (DPIIT). Piyush Goyal, Minister of Commerce and Industry, released this report dipping into data from January 2016 to June 2022. According to DPIIT, start-ups generated 7.68 lakh jobs during these six years, registering 72,993 such businesses.
Karnataka followed Maharashtra's heels, generating 1.03 lakh jobs and registering 8,881 start-ups between 2016 and 2022. Delhi came third with 87,643 jobs and 8,636 start-up registrations. Next was Uttar Pradesh, generating 67,694 jobs and 6,654 registrations.
The State of Two States
The governments of Maharashtra and Karnataka have been trying hard to create a conducive and thriving ecosystem for start-ups in their respective states for several years. The above numbers show that their efforts have yielded results. The Maharashtra State Innovation Society has been hosting the Maharashtra Startup Week since 2018. Last year, over 1,800 start-ups applied to participate in this event and bag the opportunity to win work government contracts across sectors including agriculture, cleantech, education and skilling, governance, healthcare, miscellaneous, etc. The fifth edition this year is focused on start-up solutions that can create social impact, offer solutions to solve public challenges and help bring innovation in governance.
Last week, the Confederation of Indian Industry's (CII) Karnataka chapter launched a start-up task force to strengthen the start-up ecosystem of Bengaluru. Arjun M Ranga, Chairman of CII Karnataka, told the Economic Times that the start-up task force would assist start-ups in getting access to large corporates and mentorship from CEOs. It will help create the proof of concept connecting start-ups with angel or venture investors.
Recently, 'Startup Karnataka', a government initiative to promote start-ups in the state, was announced for August. This blockchain hackathon, in association with crypto exchange CoinSwitch, is centred around the themes of smart city, digital governance, and supply chain.
Banking On Start-Ups
The BJP administration had announced 'Startup India' in 2015 and formally launched it a year later. Under the Startup India Seed Fund (SISF) scheme, Rs 365.75 crore was disbursed to 99 incubators, and Rs 76 crore was approved for 436 start-ups.
During a Lok Sabha session, Som Prakash, Minister of State for Commerce, said that the government had undertaken 52 regulatory reforms since 2016 to enhance ease of doing business, raise capital, and reduce the compliance burden for start-ups. However, no centralised information on money raised by start-ups in the country was available.
Minister Prakash added that start-ups could self-certify their compliance under nine labour and three environment laws within five years of incorporation. Those incorporated on or after 1st April 2016 can apply for income tax exemption. Recognised start-ups granted an inter-ministerial board certificate are exempt from income tax for three consecutive years out of 10 years since incorporation.
As per the data presented by Minister of State for Skill Development and Entrepreneurship Rajeev Chandrasekhar in Lok Sabha, the DPIIT has implemented the Fund of Funds for Start-ups (FFS) scheme and Startup India Seed Fund (SISF) scheme to provide financial assistance to start-ups via AIFs and incubators, respectively.
He added that the government had established FFS with a corpus of Rs 10,000 crore to meet the funding needs of start-ups over the 14th and 15th Finance Commission cycles based on the scheme's progress and fund availability. The total sanctioned for providing seed funding to start-ups through incubators is Rs 945 crore under the SISF Scheme for four years, starting from 2021-22.