Allaying fears of the Indian startup ecosystem, Manmeet Nanda, joint secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) said that she doesn’t foresee any issue in Indian startups’ financial requirements.
“I don’t foresee any kind of an issue for our startups and in terms of their financial requirements,” Nanda said.
Her statement assumes significance in the wake of certain Indian startups and venture capital firms having exposure to the US, worrying about their funds parked with the Silicon Valley Bank.
As per the latest ‘Tracxn Geo Quarterly Report: India Tech – Q1 2023’ report,
the startup ecosystem in India saw a considerable decline in investment in the first quarter of 2023 when compared to the same period in 2018.
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“We have not seen a plunge (in funding) that way…it’s a system readjustment. We have not received any information on a problem there,” Nanda said.“There is no need for any kind of worry. Our fundamentals are strong,” she reassured.
The DPIIT has had talks with the Indian Banking Association so as to take proactive steps to reach out to Indian startups, understand their financial requirements and figure out how to improve their penetration to various banks across different sectors.
Nanda also said that there has been a 40% growth in the number of DPIIT registered startups- around 29,000-in the last one year taking the total registered startups to 95,000. The leading startup sectors are healthcare, life sciences, education, agriculture, professional and commercial services. Maharashtra, Karnataka, Delhi, Uttar Pradesh and Gujarat are the leading states.
The start up India seed fund has already approved Rs 590 crore for selective incubators. The incubators selected for these seed funds are about 155 already.
“Most of these startups and incubators are selected for funding belong to tier two and tier three cities,” Nanda said.
Amid tightening liquidity conditions in the country, the union government last year notified the establishment of the Credit Guarantee Scheme for Startups (CGSS) to improve the availability of collateral free loans to startups.
Startup ranking
In a first, the department will assess the private ecosystem of states and UTs in the upcoming fifth edition of the startup rankings.
“We were only judging what the states did but now activities of private players, academic institutions, venture capitalists and private companies will be assessed on how they’re promoting entrepreneurship,” Nanda said.
Of the Rs 10,000 crore Fund of Funds scheme, Rs 8,294 crore have been approved to 103 Alternate Investment Funds .
18 financial institutions have onboarded the government’s Credit Guarantee Scheme as of April 6 and loan sanctioning has begun for 4-5 startups, she said.