ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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The Good, the Bad, and the Ugly of ‘Startup India’

A Review of India’s Entrepreneurship Policy

Promoting high-tech entrepreneurship is widely accepted as a catalyst for economic growth, but outside of developed countries, there has been little independent assessment of these policies. Using a comprehensive set of data sources, we provide the first assessment of the “Startup India” programme launched in 2016. We find that Startup India has had a positive impact in reducing regional entrepreneurial disparities but has been less successful in providing financial support through its fund of funds for startups. Furthermore, the policy has failed to recognise and address the under-representation of marginalised caste groups and women entrepreneurs in the Indian start-up ecosystem.

 

This paper is part of the research conducted under the Global India European Training Network, funded by the European Commission’s Horizon 2020 programme. The authors would like to thank the European Commission for its support. They would also like to thank the anonymous referee and the editor for the useful comments during the revision process.
 

A high rate of entrepreneurial activity is linked with positive outcomes for countries; these include an increased rate of value creation and economic development (Baumol 2002; Leff 1979; Wennekers and Thurik 1999), more employment opportunities (Glaeser et al 2015), and improved international competitiveness (Audretsch and Beckman 2007; van Praag and Versloot 2007). The governments’ policy choices shape institutions that play a crucial role in determining entrepreneurial behaviour (Minniti 2008), both by promoting productive entrepreneurship (Baumol 1996) and reducing the constraints on entrepreneurship (Braunerhjelm et al 2010). This has led to the emergence of entrepreneurship policies as a central tenet of the economic strategies of governments around the world (Arshed et al 2014). However, governmental efforts to transform economies through entrepreneurship policies often fail to live up to the expectations of policymakers (Lerner 2009). The efficacy of entrepreneurship policies in meeting their stated objectives has been contested (Curran and Storey 2002; Williams 2013), with calls for more quantitative rather than qualitative evaluations of entrepreneurship policies that focus on the changes over time (Naudé 2013). Arenal et al (2019), in their analysis of research on entrepreneurship policy, also highlight that the field continues to be dominated by Anglo-Saxon countries, with major contributions from researchers affiliated with the United States (US) and the European Union.

We aim to address this crucial gap by evaluating India’s entrepreneurship promotion policy, “Startup India.” The Indian government unveiled the policy in January 2016 with the vision of transforming the entrepreneurial ecosystem in India to nurture innovation and support the growth of startups. To the best of our knowledge, this is the first paper to review this flagship policy initiative. We draw on a comprehensive set of sources—including data from the Economic Census, private research platforms, such as Tracxn, parliamentary proceedings, ministerial press releases, Startup India’s official portal, industry reports, media articles, and video interviews with key stakeholders—to track the progress of the Startup India initiative from its launch up to March 2020.

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Updated On : 12th Dec, 2021
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