Startup India initiative created over 560,000 jobs since 2016, says govt

More than Rs 2,500 crore has been disbursed for investments into start-ups

The Startup India initiative has created an estimated 187,004 direct jobs since its inception in 2016, with the number of related indirect jobs taking the total tally to more than 560,000, the government has claimed.

“Start-ups create valuable jobs. 187,004 jobs have been reported by 16,105 Department for Promotion of Industry and Internal Trade (DPIIT)-recognised start-ups, i.e., more than 11 direct jobs per start-up. With each direct job leading to 3x indirect jobs, the total jobs created by these start-ups are estimated at more than 560,000,” Ramesh Abhishek, DPIIT secretary, said on Tuesday.

However, the figures are self-reported by start-ups and not verified by the government. This job growth has come at a rough cost of more than Rs 2,500 crore disbursed by the government to fund start-ups. 

In 2016, the Centre had established a Rs 10,000-crore fund of funds under the Small Industries Development Bank of India (Sidbi) to meet the financial needs of start-ups. 

“From the fund of funds, Sidbi has committed Rs 2,570 crore to 45 venture funds, catalysing investments of more than Rs 25,000 crore. 244 start-ups have received funding of Rs 1,561 crore,” Abhishek tweeted.

Abhishek’s comments assume significance as the Narendra Modi government has received criticism for not being able to shore up employment. Last week, the first periodic labour force survey officially showed the unemployment rate at a 45-year-high of 6.1 per cent in 2017-18.

The secretary added that since 2016, when the flagship digital initiative was launched, 18,861 start-ups have been recognised. “In May 2019, 814 start-ups have received recognition. This is more than one start-up every hour. These entities are spread across 513 districts of 29 states and six Union Territories,” Abhishek tweeted.

But start-ups claim the recognition hasn’t increased their chances of sourcing funds from the market even as few qualify for government investments. Banks do not provide Mudra loans or assistance under Startup India schemes to private limited companies that are less than a year old. On the other hand, venture capitalists and angel investors only fund private limited companies,” they had argued.

According to the official website of the Startup India initiative, the certificate gives a company income-tax exemption for a period of three consecutive years and exemption on capital gains and investments above fair market value. It provides for easy winding up of a firm within 90 days. It also helps fast-track up to 80 per cent rebate on filing patents. It also promises to help facilitate funds for investments into start-ups through alternative investment funds.

Officials also pointed to intellectual property support provided by the DPIIT. Abhishek said 1,496 start-ups have received 80 per cent rebate in patent filing fees, while 2,761 got 50 per cent rebate in trademark filing fees. He added that a total of 103 patents have been granted, with the fastest patent being granted in under 81 days.

The government has also announced that start-ups now get government orders on the e-marketplace portal. The GeM Startup Runway also allows exemption from prior turnover, prior experience, and earnest money deposits. 1,862 start-ups have registered to date, receiving 7,697 orders worth Rs 275 crore till April 2019.