Start-up Ecosystem In India

Start-Up India Scheme

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Start-up India scheme

Mains level : Startup ecosystem in India


  • Maharashtra, Karnataka, and Delhi have seen the highest number of start-ups recognised under the government’s flagship Start-Up India Scheme in the period from 2016 to 2019.
  • These three states also attracted the highest investments from Alternative Investment Funds (AIFs) in start-ups.

About Start-Up India Scheme

  • Startup India Scheme is an initiative of the Indian government, the primary objective of which is the promotion of startups, generation of employment, and wealth creation.
  • It was launched on the 16th of January, 2016.
  • A startup defined as an entity that is headquartered in India, which was opened less than 10 years ago, and has an annual turnover less than ₹100 crore (US$14 million).
  • The action plan of this initiative is based on the following three pillars:
  1. Simplification and Handholding
  2. Funding Support and Incentives
  3. Industry-Academia Partnership and Incubation
  • An additional area of focus is to discard restrictive States Government policies within this domain, such as License Raj, Land Permissions, Foreign Investment Proposals, and Environmental Clearances.
  • It was organized by The Department for promotion of industry and internal trade (DPI&IT).

Back2Basics

Alternative Investment Funds (AIFs)

  • An alternative investment is a financial asset that does not fall into one of the conventional investment categories. Conventional categories include stocks, bonds, and cash.
  • Most alternative investment assets are held by institutional investors or accredited, high-net-worth individuals because of their complex nature, lack of regulation, and degree of risk.
  • Alternative investments include private equity or venture capital, hedge funds, managed futures, art and antiques, commodities, and derivatives contracts.
  • Real estate is also often classified as an alternative investment.
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