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Impact Of Startups On Indian Economy

The s​tart-up ecosystem is often described as young, innovative, aspirant and futuristic. India, home to a new breed of young start-ups, has evolved to become the fourth largest base of technology start-ups in the world. India’s startup economy has been booming, the last decade has seen significant activity on multiple fronts including the founding of new startups, amount of funding and number of investment rounds, influx of global investors and startups, development of regulatory infrastructure, global mergers and acquisitions, and internationalization. At last count, India had26 unicorns.​

Some of the key factors,that show the positive impact of the Startup industry on the Indian Economy are:

  • Growth drivers like access to capital/mentors, whitespace opportunities and increased M&A activity are accelerating the start-ups growth which in turn helps the economy to safeguard against economic downturns. Indian start- ups, with their unique solutions, are witnessing increased increased traction in global whitespace opportunities such as internet of things, augmented reality, smart hardware, big data & analytics, cloud computing, etc.
  • Domain solutions emerging – Ad-Tech, Edu- Tech and Health-Tech and other niche solutions emerging for healthcare, agriculture, etc.
  • Young entrepreneurs dominate the start-up landscape with over 73 per cent of founders in the age bracket of less than 36 years. Most of these founders with a strong consumer-centric approach, have come up with some of the best-in- class B2C start-ups. Women entrepreneurs have also started to leverage the innovation economy.



Government has setup Startup India with the expectation to construct a strong eco-system for nurturing grass root level startups with innovation in the country that will generate large scale employment opportunities and derive sustainable economic growth. Some of the Legal Support extended by the Government are:

  • 80% rebate in patent filing fees and 50% rebate in trademark filing fees. Additionally, Startups are considered for expedited examination of patent applications to reduce time taken in granting patents.
  • 425 Patent facilitators and 606 Trademark facilitators have been empaneled under this scheme to provide free-of-charge services to Startups.

Additionally, in the Budget 2020, several measures were announced which would positively impact the Startups and MSMEs:

  • Launch of a Digital Platform for the protection of Intellectual Property Rights which shall facilitate seamless applications.
  • More External Commercial Borrowing and Foreign Direct Investment shall be allowed and invited in the Education Sector.
  • To be eligible for registering as a Startup the earlier criteria of turnover of Rs.25 Crore has been increased to Rs.100 Crore.
  • A Startup can now avail tax benefits for a period of 3 years out of a block of 10 years.
  • Tax Audit for MSME shall be required in case the turnover exceeds Rs.5 Crore which was earlier Rs.1 Crore.
  • A new Export Credit Scheme shall be introduced called Nirvik.
  • Schemes are proposed to be announced to encourage Mobile Manufacturing, Medical Device Manufacturing.

Start-up is an open door for a business person to teach and rouse others while some are considering how to do and what to do. Business people are confronting issues yet at the same time they are rising like the sun. They have the assurance to setup and occupy their vitality to plan, bolster and execute their fantasies and adding to the development of the economy. If the growth continues at the same pace then it is expected that Indian start-ups will generate almost 2.5 lakh jobs in the next five years. India is also said to enjoy demographic dividend and it is anticipated that by 2020 India will be a home to 112 million working population falling in the age bracket of 20- 24 years. This demographic dividend will definitely boost the economy of the country.

Varun Sethi