Economy

With a focus on job creation, the government seeks to strengthen the startup ecosystem

The Centre has started looking into methods to reinforce the existing regulatory and legal framework since it regards government-registered startups as a major source of livelihood and entrepreneurship, with a total of 56,000 and counting.

At least one strartup may be found in each of the 630 districts, according to data from the Department of Promotion of Industry and Internal Trade (DPIIT).

According to government sources, the DPIIT is working on the next set of measures and has met with state-run banks to explore how they can consider lending to startups after taking the risk into account. “There are many methods to deal with this,” a government source told TOI, “and the department has explored some of the ideas with banks in which they can share in the upside later.” The matter was even raised at a recent finance ministry-organized gathering of state-run bank heads.

The government does not believe that equity is a barrier, noting India’s third-largest ecosystem, which contains more than 70 unicorns, with more than 40 of them added just this year. In addition to private sources of cash, Sidbi had formed a fund of funds.

DPIIT is looking to continue the government’s major startup push, which began nearly six years ago. Some of the system’s flaws, such as tax-related concerns or flipping, which has seen some firms transfer out of the nation in quest of a lower tax liability, are likely to be solved.

According to sources, the DPIIT is planning a week-long Innovation Week in early January to coincide with Prime Minister Narendra Modi’s Startup India initiative’s sixth anniversary, during which IITs will be linked with those who provide funding, and the 190 finalists of the Startup awards will make a pitch to investors.

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