What do you understand by startup? Comment upon start up scenario in India. Discuss the challenges faced by them.

Approach:

Startup is a venture in early stages of its development, it is founded by two to three entrepreneur who focus on capitalising a market demand by developing a viable product or service

Startup scenario

• India has the 3rd largest startup ecosystem in the world
• 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.
• It is expected growth of a consistent annual growth of 12-15%
• India has about 50,000 startups in India in 2018
• India has about 50,000 start-ups in India in 2018; around 8,900–9,300 of these are technology led start-ups 1,300 new tech start-ups were born in 2019 alone implying there are 2-3 tech start-ups born every day, as per government figures.

Challenges

• Building and Scaling an Indian Startup
• many Indian founders have a technical background and lack business knowledge.
• Hiring Qualified Employee startups see a gap between the knowledge taught to students in colleges and the knowledge needed for the jobs Indian startups are yet to attract international talent.
• Bureaucracy and visa requirements make it difficult to hire employees from outside India
• Good and Services Tax (GST), still lack of clarity on how it works and which items are applicable as tax base or not Financial resources
• Availability of finance is critical for the startups and is always a problem to get sufficient amount Revenue generation
• Several startups fail due to poor revenue generation as the business grows. As the operations increase, expenses grow with reduced revenues forcing startups to concentrate on the funding aspect.
• Supporting infrastructure There are a number of support mechanisms that play a significant role in the lifecycle of startups which include incubators, science and technology parks, business development centers etc.
• Regulations Starting a business requires a number of permissions from government agencies. Although there is a perceptible change, it is still a challenge to register a company.
• Regulations pertaining to labor laws, intellectual property rights, dispute resolution etc. are rigorous in India.
• Lack of a good branding strategy, Absence of an effective branding strategy is another issue that prevents startups from flourishing at a faster pace

Government steps

1. Start-Up India

This initiative provides three-year tax and compliance breaks intended for cutting government regulations and red tapism. Startup India Action Plan of 2016 thus proposed the CGSS to fuel entrepreneurship by making credit accessible to innovators and encourage banks and other lending institutions to provide them with venture debt

2. Mudra Yojna

Through this scheme, startups get loans from the banks to set up, grow and stabilize their businesses.

3. SETU (Self-Employment and Talent Utilization) Fund

Government has allotted Rs 1,000 Cr in order to create opportunities for self-employment and new jobs mainly in technology-driven domains.

4. E-Biz Portal

Government launched e-biz portal that integrates 14 regulatory permissions and licenses at one source to enable faster clearances and improve the ease of doing business in

India.

Conclusion

The startup arena has lot of challenges ranging from finance to human resources and from launch to sustaining the growth with tenacity. Being a country with large population, the plethora of opportunities available are many for startups offering products and services