PROJECT REPORT

ON

UNIVERSITY BUSINESS SCHOOL, GNDU, AMRITSAR

REPORT SUBMITTED BY: SUBMITTED TO:

Himanshi tandon

2020010005036 Prof. Satvir Kaur

 ACKNOWLEDGEMENT

First of all, I am thankful to The Great Almighty, who bless me sound health,
abilities and gives courage to perform and complete my work in a successful
manner.
I wish to express my sincere gratitude to Prof. for providing me an opportunity
to do my project report on “Start-ups in India”. Her exemplary guidance,
constant encouragement and careful monitoring throughout the project are so
great that, even my most profound gratitude is not enough.
My gratitude is incomplete without the thanks to the other staff members of
the University Business School, for their constant help and support throughout
the project. I also acknowledge with a deep sense of reverence, my gratitude
towards my parents, family and friends, who has always supported my morally
as well as economically.
At last, but not the least, I am thankful to everyone who directly or indirectly
helped me to complete this project report.

Himanshi Tandon
 Preface

India is the second largest populous country in the world with 1.2 billion
population strength. To cover up this large population there exist large
potentiality of job market in India. But According to the latest Asia Pacific
Human Development Report, India is facing severe scarcity of job market;
growth in unemployment among young graduates and it will last for next 35
years. According to Labour Ministry data, around 1 million people enter the
workforce in India every month. To eradicate this scarcity of job market, ours
Honourable Prime Minister Narendra Modi, announced on 15th August 2015,
“Start Up India, Stand Up India” to promote Bank Financing for start-ups and
offer incentives to boast entrepreneurship and job creation.
In recent years, the Indian start-up ecosystem has really taken off and come
into its own driven by factors such as massive funding, consolidation activities,
evolving technology and a burgeoning domestic market. The numbers are
telling from 3,100 startups in 2014 to a projection of more than 11,500 by
2020, this is certainly not a passing trend. It’s a revolution. And it’s going to
change the way the markets are working today in India. The strategies of the
Central Government take into account the collective aspirations and enterprise
of the risk taking Indian. The success of the Silicon Valley start-ups has many
indomitable and resolute Indians in the heart of it.
India aspires to contribute to 15-20 percent global GDP. It happens when
Startup movement attains critical mass. Start-up India looks beyond the
argument that it is a better packaging of existing institutional support. The
complexities of managing the diversity of thoughts, processes and people of
India are very well known. The plan of Start-up Indians is to flourish under an
ocean of changes in mindset and thinking. It is giving feather to wings of the
unstoppable Indian.
 CONTENTS
1. Introduction …………………………………………………………………………………………….6

2. What is startup company………………………………………………………………………….7

3. The startup scenario in India…………………………………………………………………….8

4. Drivers of Startup ecosystem…………………………………………………………………….12

5. Startup India……………………………………………………………………………………………..14

6. Action Plan…………………………………………………………………………………………………15

7. Outcomes of Action plan………………………………………………………………….16

8. Startup India : The Way Ahead………………………………………………………….22

9. Conclusion………………………………………………………………………………………..32

10. Bibliography………………………………………………………………………………………33
 Introduction
Indian Institutes of Technology (IITs) have been ranked the world's fourth
largest producer of billion-dollar start-ups, according to a study by UK-based
accounting company Sage. IIT alumnus accounts for 12 billion-dollar start-ups
including Flipkart, Snapdeal, Shop Clues, Zomato and Ola. Stanford University
topped the list with 51, followed by Harvard University and The University of
California (26 Jan 2017). Start-up is defined as “an entrepreneurial venture or a
new business in the form of a Company, a partnership or temporary
organization designed and search of a repeatable and scalable business model.
“Start-up India brings excitement and immense possibilities for the future.
India acknowledged the stark reality of modern business and its complexity.
The Central government tried to address the problems faced by the young,
entrepreneurial Indian, whose risk-taking ability is unparalleled across the
globe. Policy paralysis and lack of transparency were just few of the
bottlenecks faced by the entrepreneur.
Technology has a predefined role to play in Start-ups. The Internet-led industry
contributes $30 billion today, which is a fraction of the $250 billion by 2020.
USA internet business could grow from $240 trillion today to $3.5 trillion and
China from $700 billion to 1.5 trillion during the same period. The sheer size of
change that Start-ups can choose to bring is mammoth and exponential. Start-
ups have been the flavour of the season over the last few years for the Indian
markets.
However, 2015 has turned out to be a year offering a bit of a reality check to
one and all and redefined the dynamics to a great extent. The year also set the
tone for the next stage in the evolution of the start-up ecosystem. The
maturity in decision making that should ideally come in at this stage would be
a step in the right direction taking the start-up space in India towards greater
heights, as it deserves. The larger problems plaguing the businesses, such as
the unorganised and fragmented Indian market, lack of clear and transparent
policy initiatives, lack of infrastructure, lack of knowledge and exposure,
complications in doing business, etc. The framework and course of regulations
need to be updated and adopted as per the times. The right policy matter
announcements by lawmakers can be a push. In times like these, pro reforms
announcements are required to provide the much-needed impetus to the
general business environment in the country in the start-up space.
 What is Start-up Company ?
A start-up venture could be defined as a new business that is in the initial stages
of operation, beginning to grow and is typically financed by an individual or small
group of individuals. It is a young entrepreneurial, scalable business model built
on technology and innovation wherein the founders develop a product or
service for which they foresee demand through disruption of existing or by
creating entirely new markets. Start-ups are nothing but an idea that manifests
into a commercial undertaking.
Grant Thornton (2016) defines start-up business as an organization which is
a) Incorporated for three years or less
a) At a funding stage of Series B or less (B Series means second round of
funding)
b) An entrepreneurial venture/a partnership or a temporary business
organization
c) Engages in development, production or distribution of new
products/services or processes
d) Revenue of up to INR 25 cr.
e) Not formed through splitting or restructuring
f) Employing 50 people or less
Department of Industrial Policy and Promotion (DIPP) define a start-up as an
entity incorporated or registered in India with following parameters:
• Established not prior to seven years, (for Biotechnology Startups not prior
to ten years)
• With annual turnover not exceeding INR 25Cr in any preceding financial
year, and
• Working towards innovation, development or improvement of products
or processes or services,
• It is a scalable business model with a high potential of employment
generation or wealth creation
It is to be noted that such entity is not formed by splitting up, or reconstruction,
of a business already in existence. Also, an entity shall cease to be a start-up if
its turnover for the previous financial years has exceeded INR 25cr or it has
completed 7 years (biotechnology start-ups 10 years) from the date of
incorporation/ registration (‘Start-up India’, 2017)
 The Start-up Scenario in India
The start-up scenario in India is really India ranks 3rd when it comes to its ‘start-
up ecosystem’ with the first two spots occupied by the USA and China
respectively. What a tremendous shift it has been from the situation only a few
years back with over 1000 start-ups being added to the list in the year 2018
alone. India has the 3rd largest startup ecosystem in the world; expected to
witness YoY growth of a consistent annual growth of 12-15%
India has about 50,000 startups in India in 2018; around 8,900 – 9,300 of these
are technology led startups 1300 new tech startups were born in 2019 alone
implying there are 2-3 tech startups born every day.

Cities like Bangalore and the ones in the NCR region can be rightfully called the
start-up hubs of India for housing almost 80% of the total count.

Ecommerce start-ups in India constitute 60% of the total start-ups and hence
dominate the field.

India has succeeded in becoming a leader in the start-up space in the past
decade. The pace of growth in the startup ecosystem has increased to 15%
year-on-year in 2018, while the growth of the number of incubators and
accelerators has grown to 11%. Significantly, the number of women
entrepreneurs stood at 14%, up from 10% and 11% in the previous two years.

Startups in the country have been able to create an estimated 40,000 new jobs
over the year, taking the total jobs in the start-up ecosystem to 1.6-1.7 lakh
Bangalore has been listed within the world’s 20 leading startup cities in the 2019
Startup Genome Project ranking. It is also ranked as one of the world’s five
fastest growing startup cities

The Indian startups have gone on to raise sizeable ticket sizes from various
global and domestic funds. The top 15 deals constituted about 40% of total
deal value, demonstrating that most funds are valuing deal quality more than
quantity.
Private equity deal volume in India rose for the second straight year, and while
the average deal size declined slightly from the prior year, the total value of
$26.3 billion in 2018 was the second-highest of the last decade. The number of
deals greater than $50 million increased from the previous year.
It wouldn’t be wrong to say that the start-up ecosystem in India is not just
growing in scale but also maturing with years. Where till a few years back the
monopoly of cities like Bangalore and NCR was clear in the industry, now
smaller cities like Pune and Jaipur have also made their mark with the recent
emergence of start-ups. As a result of which India holds the 57th position in
the Global Innovation Index. The sector was dominated by B2B ventures
previously but now the rise in the number of B2C ones is evident. In that case,
it is not surprising that about 35 billion USD has come into the country for
investment in the past 4 years. India is growing, undeniably. So is the start-up
scenario in India. A lot of new and encouraging stories of start-ups have
garnered much-deserved attention. The start-up ecosystem in India is both
growing and maturing over the years.

TOP 10 HIGHLIGHTED SECTORS IN

TERMS OF NUMBER OF STARTUPS ARE:

IT SERVICES
HEALTHCARE & LIFE SCIENCES
EDUCATION
PROFESSIONAL & COMMERCIAL SERVICES

FOOD & BEVERAGES

AGRICULTURE
FINANCE TECHNOLOGY
TECHNOLOGY HARDWARE
FINANCE TECHNOLOGY,
CONSTRUCTION,
GREEN TECHNOLOGY
STARTUP INDIA
IN NUMBERS (JAN 2016-DEC 2020)

4.7 Lac
jobs reported by
39,000+ startups

41,317 Rs 4,509 Crore

startups of investments made in
recognized 384 startups through the
by DPIIT Fund of Funds scheme

590+ 44% 30
districts with of the States and
atleast one recognised UTs have a
recognized startups have dedicated
startup at least one startup policy
woman director
319 53,226
eligible orders received
startups have by startups with
been granted a value of over 37+
exemption under Rs 2,279 Crores regulatory
80-IAC of the through GeM reforms have
Income Tax Act portal been undertaken
by States and UTs

2.8 Lac
39 users
regulatory enrolled in
reforms enabled Startup India
with the help of L&D program
various Ministries.
 DRIVERS OF STARTUP ECOSYSTEM
• Increasing smartphone penetration, expected to reach 490.9 million by
2022
The increasing smartphone and internet penetration is one of the major drivers
of this growth. The number of active internet users in India is growing at a rapid
scale with a year-on-year growth of 11%. The speed and magnitude of growth
are immense and so has increased consumption of data and information from
innumerable sources helping people make informed decisions.

• Expanding domestic market

The major challenge start-ups used to face was the resistance shown by people
in trying out or consuming their products/services, especially because of the lack
of information. The situation today stands changed and with an informed
consumer at the other end that can be reached out through various channels;
the task of building trust just got easier. Lucrative services and deals are drawing
people in and increasing the domestic markets the start-ups in India seek to
target.
• Establishment of start-up conducive environment

• Increasing talent pool due to IT boom in the early 2000s

India is buzzing with a huge talent base. The start-up ecosystem in India could
not be imagined without the necessary human resource to help build it. With
the youth largely opting to pursue the field of IT, the human resource is only
increasing hence strengthening the supply side.

• Availability of good funding, credits to incubators, angel investors

banks, mentors, etc.
Credits to the growing start-up scenario in India a good number of funders,
investors

• Promising pro entrepreneurship policies

Government’s pro start-up and pro entrepreneurship policies like ‘Start-up
India’, ‘Make in India’, ‘Digital India’, etc. are giving the necessary
encouragement to business owners.
Corporate Connect
Enterprises are realizing the disruptive potential of start-ups and are thus,
partnering/investing in them. Examples of corporate support:
• Facebook in partnership with Startup India disbursed cash grants of
$50,000 each to the top 5 selected startups
• 10000 Women program by Goldman Sachs is providing women
entrepreneurs all around the world with a business and management
education, mentoring and networking and access to capital.
• Microsoft Ventures Accelerator Program in India has recently picked up
16 startup
Government Support
Government of India is understanding the value of working with disruptive
innovators across the value chain and using their innovations to improve public
service delivery.
• Department of Animal Husbandry and Dairying has conducted a grand
challenge in association with Startup India to award top startups in 5
categories 10 lakhs INR.
• Small Industries Development Bank of India has launched a scheme to
provide assistance to existing Small and Medium Businesses in need of
capital for growth
• Over 26 states in the country have Startup policies
Startup India was launched on 16th January 2016 as a clarion call to the innovators,
entrepreneurs, and thinkers of the nation to lead from front in driving India’s
sustainable economic growth and create large scale employment opportunities.
Startup India laid the foundation for building a self-reliant India and harness the
potential of a nation bestowed with largest youth population in the world. Armed
with the philosophy of “innovate, develop and Make-in-India for the world”.
Startup India, today, has become a globally known journey of India’s fast paced,
always innovating and resilient entrepreneurial ecosystem.
Aimed to make India, one of the largest and vigorous startup ecosystems in the
world, a 19- point Startup India Action Plan was launched in January 2016 which
paved the way for the introduction of a number of policy initiatives to build a strong,
conducive, growth- oriented environment for Indian startups. Five years since the
launch of the initiative, India is witnessing a golden chapter in the history of Indian
entrepreneurship, which it being counted amongst the largest startup ecosystems in
the world with 30+unicorns and over 41000 recognized startups from various states
and Union territories. Efforts have been put in by the Government and various
stakeholders towards making the vision of Startup India a reality. While the global
pandemic of COVID-19 caused a socio-economic turbulence across the world, the
resilience and innovations spurred by Indian startup community contributed
immensely for re-shaping the building-blocks of the economy and unlocking the
potential of our youth.
As the world is pivoting and navigating the unfolding of refreshed socio-economic
landscape, Government of India “Startup India: The way Ahead”, an agenda for
action to further fuel the startup movement in India which is a key driver of creating
an Aatma Nirbhar Bharat. With this Way Ahead action agenda, the Government
intends to provide an all-inclusive vision for a vibrant and vigorous startup
movement.
 THE ACTION PLAN

INDUSTRY-ACADEMIA PARTNERSHIP &

INCUBATION
7. Organizing startup fests for 11.Setting up of seven new research
showcasing innovation and parks modelled on the research
providing a collaboration park setup at IIT Madras
platform.
8. Launch of Atal Innovation 12.Promoting startups in the
Mission (AIM) with Self- biotechnology sector
Employment and Talent
FUNDING SUPPORT
SIMPLIFICATION 13.Launching of innovation
Utilization (SETU) programme focused programmes for & INCENTIVES
& HANDHOLDING 9. Harnessing private sector students 15. Provision of funding support
1. Compliance regime based on expertise for incubator setup 14.Annual incubator grand through a Fund of Funds with a
self-certification 10. Building innovation centres at
challenge corpus of Rs 10,000 crore
2. Startup India Hub national institutes 16. Credit guarantee fund for
3. Rolling out of mobile app startups
and portal 17. Tax exemption on capital gains
4. Legal support and fast-tracking
patent examination at lower 18. Tax exemption to startups for
costs. three years
5. Relaxed norms of public 19. Tax exemption on
procurement for startups investments above fair
6. Faster exit for startups market value

KEY
PILLARS
 KEY OBJECTIVES

• Foster a culture of innovation amongst citizens and students in particular.

• Promote innovation in all sectors of economy across the country, including

semi-urban and rural areas.

• Support creative and innovative ideas through incubation and research and
development to transform them into valuable products, processes or
solutions to improve productivity and efficiency.

• Create an environment of absorption of innovation in industry.

• Facilitate public organisations to assimilate innovation with a view to

improving public service delivery.

• Promote creation, protection and commercialisation of intellectual property

Rights

• Make it easier to start, operate, grow and exit businesses by reducing

regulatory Compliances and cost.

• Incentivize domestic capital for investments into startups.

• Promote ease of access to capital for startups.

• Mobilize global capital for investments in Indian startups.

• Keep control of startups with originals promoters.

 CONCLUSION
Startup India is a welcome initiative which can act as an effective
instrument for India’s transformation through startups, tecnology
and innovation. This transformation can encourage entrepreneurship
among the youth of india and turn them from jobseekers to job
creaters.

Amongst the many incentives bestowed through the initiative, key

ones for startups include, exemption from paying income tax on their
profit for the first three years, a simple exit policy, fast-tracking of
the patent applications, 80% exemption in patent fee, self
certification based compliance system, etc. Also, this plan is intended
to put startups on a level playing field with the MSMEs, and a fund
worth INR100 billion shall be created for the same.
A tax and regulatory friendly environmment created through this
initiative, may bring new investments in india, and accelerate its
economic growth. It will be worthwhile to watch out for these
incentives becoming a part of the Act, probably, in the coming
budget.
The government’s action plan has come at a time whwn the Indian
economy is in need of fresh capital, better regulatory environment
and co-operative attitude of the relevant departments, and
therefore if implemented in true spirit, it can place India on a high
growth trajectory.
 BIBLIOGRAPHY
https://assets.kpmg/content/dam/kpmg/in/pdf/2017/01/KPMG-Flash-News-Action-Plan-
on-'Startup-%20India'-1.pdf

https://en.wikipedia.org/wiki/Startup_India

https://www.indiatoday.in/india/story/startup-india-19-key-points-of-pm-modis-action-
plan-304205-2016-01-17

https://cedcommerce.com/blog/the-maturing-startup-scenario-in-
india/#:~:text=There's%20a%207%25%20year%20on,%2435.3%20billion%20worth%20of%2
0investment