A STUDY ON STARTUP IN INDIA

ISSUES, CHALLENGES
AND
OPPORTUNITIES BY GOVERNMENT POLICIES

SYNOPSIS
SUBMITTED IN PARTIAL FULFILLMENT FOR
THE DEGREE OF
DOCTOR OF PHILOSOPHY (COMMERCE)

SUPERVISED BY SUBMITTED BY
JV’N DR. JP MISHRA JV’N MR MOHAN KUMAR
ENROLMENT. NO JVR-1/18/10035

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 Department of Management & Commerce
Jayoti Vidyapeeth Women’s University, Jaipur (Rajasthan)
June , 2019

INDEX

Topic Page No.

Introduction 3

Need of Research 4-5

Objectives of the Study 6

Review of the Literature 7-16

Research Methodology 17-19

Hypothesis 20-21

References 22

A Study on Startup in India, Issues, Challenges and

Opportunities by Government Policies

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 INTRODUCTION
Today corporate culture impaired your personal life, family life & social life. So
most of the employees think about self-employment. From the day of The
Campaign was First announced by Prime Minister Narendra Modi in his 15
August 2015 address from Red Fort. Prime Minister Aimed to make India, one of
the largest and vigorous startup ecosystems in the world, PM Modi’s flagship
initiative Startup India programme took a slew of policy initiatives to build a
strong, conducive, growth-oriented environment for Indian startups and thereby
help generate lakhs of job opportunities in the country.
It was launched on the 16th of January, 2016 by Prime Minister Narendra Modi at
Vigyan Bhawan, New Delhi. After four month of announcement Prime Minister
launched Startup India.
The Nineteen incubation centers under Startup India are running, which help
easier patent filing, tax exemptions, ease of setting-up of business, an INR 10,000
Cr fund, and a faster exit mechanism, among other things. Startup India: Enabling
A Conducive ecosystem beyond “Jugaad”.
Startup India scheme launched for those people who have ideas and capability so
government will give them support to make sure they can implement their idea
and grow. Every person had grow idea in their mind but due to some technical
experience, product and service experience, market place experience, viability of
product and customer approach experience not able to execute their ideas.
Government provide the solution to those person by startup meets and incubation
centers.
Startup India is an uprising plan that has been started to help the people, who want
to start their own business. Startups are created to commercially explore an idea
with innovative potential. To do so, they need a set of technical and business
capabilities, efficiently allocating resources to obtain a product with market value.
That being said, this study aims to identify how innovation capabilities are
arranged in startups.

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 NEED OF THE RESEARCH:-

Today’s scenario everyone got higher study to do a good job, parents also focus
on the same thing for his/her child. They use their skills for multinational
corporate because they feel it’s the best and safest option of life. Due to this
approach we use 90% Chinese product which are destroy our economy. Next war
would be economic war due to our safest job approach.
Every startup need to do a through analysis of what the market needs. If you are
prepared with good market study information and analysis, then you would have a
better chance of proving the viability of your business. A new startup can be both
exciting and frightening. There are lots of useful things to consider - locality, size,
human resources, quality control, etc. And then there are the anxieties and
concerns: "Will I make it?" "Am I in over my head?" "Where do I start?" Legal
regulations and policy are always changing; updates can be obtained during the
many state agencies that are listed within this handbook. Finally, keep in mind that
it is essential to check with both your city and county clerk before undertaking any
business venture.
Today’s everyone knows about startup but they don’t know 70% to 90% startup
goes failed. Mainly reason for crash is lack of innovation — 77% of venture
capitalists surveyed think that Indian startups lack new technologies or unique
business models. We always follow others startup ideas that are not called startup
those are business modal. Here below the list of Indian clones of the Western
Startup, although there’s a lot more.

Flipkart/Snapdeal (2009) → Amazon (1994)

Ola (2010) → Uber (2009)
Zomato (2008) → Yelp (2004)
BookMyShow (2007) → Fandango (2000)
MakeMyTrip (2000) → Expedia (1996)

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We have to keep one thing in our mind that every Society has its own problem
And So we have to find solutions for our own unique problems, possibly the
solution can go worldwide and that’s the only way to build a world-class Indian
startup.

STARTUP FAILURE RATE STATISTICS

Of all small businesses started in 2014:
80 % failure in the second year (2015);
70 % failure in the third year (2016);
62 % failure in the fourth year (2017);
56 % failure in the fifth year (2018).

A probability checklist should be used to work out a business plan before

investing extensive time, money and effort in the process. It can be used to
examine an existing business chance or a new venture. The queries focus on areas
you need to take into account seriously to see if your plan represents a true
business chance.

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 OBJECTIVES

Objectives of the research work are as follows:

1 For Promote new technology/ knowledge/ innovation based startups

2 To Make India Nation of “ Job Creator” and not Jobs Seeker”
3 Attract Capital and technological investment in India
4 For make a exciting startup ecosystem, by establish a system between
academia, financial institutions, industries, and other institutes

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 REVIEW OF LITERATURE:-

The review of the literature forms a very essential part of any research work.
Before starting any research topic, the researcher must know till what extend the
past studies has been done. It also entails how your research must focus on the
existing problem statement to optimize the already existing solutions. It not only
justifies the research methodology which he/she intends to undertake, but also
helps to have introspection how prepared you are to complete the intended
research. This is very helpful in generating new ideas for the problem statement
and avoids duplicating the work with other’s research, hence avoid chances of
Plagiarism. In the broader terms, it has the following advantages.
 It helps the concerned authorities to know that the researcher has done lot
of study of the existing knowledge of the chosen subject.
 It also helps the concerned authorities to know that the researcher has done
has a deep understanding of the topic.
Government think factory NITI Aayog launched the Atal Innovation Mission to
foster innovation among budding entrepreneurs at the grassroots level. As a part
of this, 5,441 Atal Tinkering Labs have been set up across the country. In the
Union allow 2018, the govt. conjointly allotted $480 Mn (INR 3414.19 Cr) for
new-age technologies to additional support innovation within the Indian startup
system

 Between the year 2016 to 2019, only 15,113 startups were documented
under the Startup India programme across 492 districts in 29 states and six
Union territories
 55% of the documented startups are from Tier 1 cities, 27% from Tier 2
cities, and 18% are from Tier 3 cities
 13,176 documented startups have reportedly created 1,48,897 jobs with an
average of 11 employees per startup

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  45% documented startups have at least one or more women directors
 24 Indian states have introduce a startup policy
 The government prepared 22 regulatory amendments and approved 1,275
patent rebates in the last three years
 More than 288.16 thousands registered users are there on the Startup India
hub
 Startup India Hub has addressed 121.83 thousands queries and facilitated
673 startups
 More than 233.27 thousands have registered under the Startup India
learning programme

(Source: Startup India)

In the past few years, several states have taken the onus to build their own
incubators, co-working hubs, etc, to boost the innovation in the state. Earlier,
defence minister Nirmala Sitharaman had asked local MPs to set up co-working
spaces in their constituencies.

Recently, Rajasthan launched Bhamashah Techno Hub, one of the largest

incubators in the country, and Kerala launched one of the biggest coworking
spaces in India. Karnataka announced a credit line of INR 2,000 Cr ($281 Mn) for
the startup ecosystem in the state, with an aim to have at least 20,000 startups by
2020.

Telangana, Andhra Pradesh, Odisha, Madhya Pradesh, and Gujarat are some other
states that offer end-to-end support to startups and have come up great initiatives
to boost their respective ecosystems.

On June 22, 2016, the Union Cabinet truly approved the fund and selected SIDBI
for the disbursement of the Fund of Funds’ corpus to eligible startups through
AIFs (Alternative Investment Funds) registered with the SEBI.

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We have listed down the entire funding AIFs have received from SIDBI below
Fund of Funds as a part of Startup India set up. Apart from fund details, we've
conjointly enclosed the amount of startups that are funded by all of them

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below.

In order to avail funds, Associate in Nursing eligible VC fund 1st makes an in

depth presentation before the risk capital Investment Committee (VCIC). The

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VCIC has been created by SIDBI and includes external specialists like Mohandas
Pai, Sanjeev Bikhchandani, Saurabh Srivastava, H.K.Mittal, Prof. Vaidyanathan,
Kiran Karnik, and more. Looking forward, the following procedure needs to be
followed by an
AIF:

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We now understand the allocation method, here is a brief summary of startups
selected and funded so far under Fund of Funds. It is to be noted that though the
Startup India website claims to have 75 startups, however, we found just 70
unique startups. Information regarding 2 startups was repetitive and names of 3
startups were missing from the list mentioned on the Startup India web site.

Fund Of Funds Indian Startup

Portfolio
Current Status of Startups

75
Total number of Startups

62
Number of Startups that are active

3
Number of Startups which got acquired

5
Number of startups which shut down

5
Number of Startups with no information
Source: SIDBI
Note: Of the seventy five startups funded beneath Fund of Funds (as claimed by
DIPP), the status of 5 has not been cleared yet. The list offered on SIDBI Venture
Fund Claims to Disclose seventy two startups. solely seventy of them square
measure distinctive whereas a pair of square measure repetitive.

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 Last Updated On: 6th December, 2017

Government Loan For Business Startups In India

1. The Credit Guarantee Scheme (CGS)

The credit guarantee theme for small and tiny enterprises was launched by the
govt. of India, to form on the market collateral free credit to the small and tiny
enterprises sector. New and the existing enterprises both are covered under this
scheme. This theme helps small enterprises and 1st generation entrepreneurs, avail
small business loans at a reasonable interest rates. The amount of loan given to
any soul, depends on the individual’s eligibility and feasibility of the business.
Amount Rs 100 lakhs is the maximum limit. The theme conjointly caters to
strengthen and rehabilitate existing sick units.
With Small Industries Development Bank of India as its partner, The Government
of India is running this scheme (CGS), which gives unsecured loans to Micro and
Small Enterprises. A most of Rs one hundred Lakhs are often borrowed within the
variety of Term Loans or assets Loans.

Both inventive and little Enterprises occupied with assembling or administration

exercises aside from in instructive establishments, Agriculture, Self Help Groups
(SHGs) and Training Institutions can profit these credits.

2. MUDRA Loan Scheme

The Motive of gesture (Micro Units Development and finance Agency Ltd) theme,
is to produce adequate funds to the small units and also
the non company tiny sector. The government has known the dearth of
considerable funds needed for the expansion of the tiny and medium scale
business within the country. The theme has been designed keeping in mind the
stage of growth and funding necessities of the beneficiary small units so is
categorized below 3 stages. They are:

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Under the MUDRA Loan scheme can get loan as per client requirements. The
loans under this scheme are security free loans.

Micro Units Development and Refinance Agency Ltd. also sound a

name MUDRA, is an agency introduced by the Government of India. It introduced
to funds non-corporate small business sectors in the country. The loans under
MUDRA are approved for non-farm income-generating activities.

You can avail the following loans under MUDRA:

• Shishu: In this scheme loan provide up to Rs 50,000 without any collateral,

@1% rate of interest/month, repayable over a period of 5 years.
• Kishor: In this scheme provide loans above Rs 50,000 and up to Rs 5
Lakhs.
• Tarun: In this scheme provide loans above Rs 5 Lakhs and up to Rs 10
Lakhs.

These loans ar designed supported the stage of business and funding desires
of the beneficiary

3. Stand Up India Scheme

Continuous loan series having Stand-Up India Scheme Facilitates loans between
Rs 10 Lakhs and 1 Crore, to a minimum of one Scheduled Caste (SC) or
Scheduled Tribe (ST) borrower for surroundings up a greenfield enterprise. In this
scheme enterprise may be in manufacturing, services or the trading sector. The
loans are approved to at least one lady receiver per bank branch. Standup India
scheme aims at promoting woman entrepreneurship among the scheduled castes
and scheduled tribes.

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Stand Up India is a government special scheme which aims to economically make
powerful SC/ST and women entrepreneurs of the country. It also aims to get free
of License Raj and set up Greenfield enterprises. Under this scheme amount range
from Rs 10 Lakhs to Rs 1 Crore can be borrowed to start a manufacturing, trading
or service unit. The loan tenure is 7 years. These loans are given atleast one
women and one SC or ST category borrower per bank branch.

4. Bank Credit Facilitation Scheme

This was started by National Small Industries Corporation, to

fund MSMEs registered in India. National Small Industries Corporation has
combined with various national and private sector banks and arranges credit
support from banks at no cost to the MSMEs. Repayment of loan tenure depends
on the income generated. It provide loan from 5-7 years and can go up to 11 years
in exceptional cases.

5. Coir Udyami Yojana

This scheme aims to set coir units across India. Total Fund provide up to Rs 10
Lakh and one cycle of working capital. The total funds lent should not exceed
25% of the project cost. The capital expenditure is financed through a working
capital in cash credit (short term cash loan) and term loan. Interest rate will be at
par with the base rate. Repayment of loan under this scheme is to be made within
7 years.

6. Market Development Assistance Scheme for MSMEs:

Under Marketing Development Assistance scheme facilitates and helps the micro,
small and medium enterprises gain exposure by participating in international
exhibitions and trade fairs under the MSME India kiosk. This scheme aimed at
displaying the potential as well as growth the small and medium manufacturing
units.

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 7. (NABARD)National Bank for Agriculture and Rural Development:

(NABARD) National Bank for Agriculture and Rural Development is a

development bank that aims to provide and regulate credit and other facilities that
helps to support and develop agriculture, cottage and small industries, handicrafts
and village industries. NABARD acts as a facilitator for rural wealth promoting
institutional development by evaluating, monitoring and inspecting the client
banks.

How to apply for government loan?

Loan borrowers are required to carry the necessary paper work and submit the
necessary documents to avail these loans. Startup Loan schemes are backed by the
government, some of the loans are collateral free. Below few documents required
to carry before applying for the loan:

1. Personal background: Crimes committed can disqualify the applicant or

delay the process of sanctioning the loan
2. Resume or business background: details of the business and the applicants
experience in growing the business will be asked for.
3. Business plan: the applicant needs to write a well thought business plan in
the loan application.
4. Personal and business tax returns: applicant must submit personal and
business tax returns for the past 3 years.
5. Financial statement: applicant must submit the profit and loss statements,
bank statements, balance sheets, and cash flow forecasts.
6. Legal documents: applicant must provide proof that the business is run
legally.

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7. Collateral (if required): Collateral will strengthen your profile and may help
you get a bigger amount of loan.

Startup India registration:

Process to apply for startup India loans:

1. Log on to startup India portal

2. Enter your legal entity
3. Enter your business registration number
4. Enter the registration date
5. Enter your PAN number
6. Enter the address, pin code and state
7. Enter details of authorized representatives
8. Enter the details of partners
9. Upload the required document by self attestation
10. File the registration certificate of the company

Startup business loan eligibility:

Startup India Scheme is a program of the Indian government, the primary purpose
of which is the promotion of startups, generation of employment, and wealth
creation. Startup business loan eligibility criteria as follows:

1. It should be a new firm or not older than 5 years. The total turnover of the
firm should not exceed Rs 25 crores.
2. The company must be a private limited company or a limited liability
partnership (LLPs).
3. To get approval from DIPP, the firm should be funded by an Incubation
fund, Angel Fund or Private Equity Fund.
4. The firm should have obtained a patron guarantee from the Indian patent
and trademark office.

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5. The firm must have a letter by incubation.
6. The firm must provide innovative scheme and products
7. The firms should have obtained the approval from the Department of
Industrial Policy and Promotion (DIPP).
8. Angel fund, Incubation fund, Accelerators, Private Equity Fund, Angel
network must be registered with SEBI.

Startup business loan interest rate:

The rates of interest and tenure of repayment vary across banks. However, the
interest rate ranges from 10.99% to 21% a year. The tenure of repayment of the
loan is up to 5 years.

RESEARCH METHODOLOGY
Research is necessary to decide if your business idea has a chance of being
successful. In the method of business research, all types of data are collected in
order to better define the startup’s focus and to determine what products and
services that customers really want. Startup or business researchers utilize a
variety of research method to gather relevant data so that business enterprises
can make educated decisions. If you want to expand your startup or business,
research can help you determine your odds of success.

We will look at five research methods:-

1. Data collection/analysis
2. Surveys
3. Interviews and focus groups
4. Website Traffic data
5. Case studies
Research has a systematic method that focuses on being objective and collecting a
multitude of information for analysis so that the researcher can come to a

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conclusion. The research process is a multiple-step process where the steps are
interlinked with the other steps in the process. If first step of the process has
change, the researcher must review all the other steps to ensure that the changes
are reflected during the process. Parks and activity professionals are often
involved in conducting research or review projects within the agency. These
professionals have to know the eight steps of the research method as they apply to
conducting a study.
Step 1: Identify the Problem
To start the process is to identify a problem or develop a research question. The
research difficulty may be something the agency found as a problem, some
information or knowledge that is required by the agency, or the desire to identify a
recreation trend nationally.

Step 2: Review the Literature

Continued with the second step problem has been identified, the investigator must
learn more on the topic under investigation. After doing this, the researcher must
review the literature related to the research problem. This step provides
introductory knowledge about the difficulty area. The review of literature also
instruct the researcher about what knowledge have been conducted in the past,
how these studies were conducted, and the conclusions in the problem area.
Step 3: Clarify the Problem
Several times the primary problem acknowledged in the first step of the process is
too large or broad in scope. In the Third Stage of the process, the researcher
clarifies the difficulty and narrows the scope of the study. This can solely be
done when the literature has been reviewed.
The data gained through the review of literature guides
the scientist in elucidative and narrowing the scientific research.
Step 4: Define the Methodology

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Terms and ideas area unit words or phrases employed in the aim statement of the
study or the outline of the study. These items have to be compelled to be
specifically outlined as they apply to the study. Terms
or ideas typically have completely different definitions looking on United Nations
agency is reading the study. To minimize confusion concerning what the terms
and phrases mean, the researcher must specifically define them for the study.
Step 5: Writing a Research Proposal.
Research comes will specialize in a particular cluster of individuals, facilities,
park development, employee evaluations, programs, financial status, marketing
efforts, or the integration of technology into the operations.
A research proposal is needed to:
A. Clarify the key elements of the research.
B. Develop the initial ‘work-plan’
C. Assess resources
D. Provide sufficient information for readers to evaluate the study
E. Get formal sanction
F. Get funding for the research
Step 6: Develop the Instrumentation Plan
The plan for the study is referred to as the instrumentation plan. The
instrumentation set up is the road map for the complete study, specifying who will
participate in the study; how, when, and where data will be collected; and the
content of the program. The scientist develops the set up for the walking program,
indicating what knowledge are going to be collected, when and how the data will
be collected, who will collect the data, and how the data will be analyzed. The
instrumentation set up specifies all the steps that has to be completed for the study.
This ensures that the researcher has carefully thought through all these decisions
and that he/she provides a step-by-step plan to be followed in the study.
Step 7: Collect Data

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 Once the instrumentation set up is completed, the particular study begins with the
gathering of knowledge. The collection of knowledge may be a crucial step in
providing the data required to answer the analysis question. Every study
includes the gathering of some kind of data—whether it's from the literature or
from subjects—to answer the analysis question. Data is collected within the type
of words on a survey, with a questionnaire, through observations, or from the
literature

Once the information area unit collected on the variables, the scientist is
prepared to maneuver to the ultimatestep of the method, which is the data analysis.
Step 8: Analyze the Data
All the time, attempt, and resources devoted to steps 1 through 7 of the research
process finish in this final step. The researcher finally has data to examine so that
the research question can be answered. In the instrumentation sketch, the
researcher specified how the data will be analyzed. The researcher currently
analyzes the information according to the plan. The results of this analysis are then
reviewed and summarized in a manner directly related to the research questions.
Hypothesis
Legislature of Republic of India dispatch Startup India crusade to help enterprise
in India's young age who in spite of being prepared and fit to dispatch their very
own endeavors become subordinate upon different kinds of occupations and stay
under utilized.
Start-up Key facts
 Startup headquartered in India which was opened to help little associations
under seven years back and has a yearly turnover under ₹25 crore (US$3.9
million).
 Department of Science and Technology , Ministry of HRD have
collaborated in an activity to set up 75 Startup help center points in the National
Institutes of Technology (NITs), IITs, IISERs and NIPERs.

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 The Reserve Bank of India has guaranteed to find a way to help improve the
'simplicity of doing organizations in the nation and add to an environment that is
favorable for the development of new companies.
Startup is great idea…needs encouragement
India as the most youthful country on the planet and colossal in general populace
has one of the biggest shopper base on the planet. For each selective expect of
each portion of populace there is open door for new pursuit. Our human services,
training, foundation. Frameworks are in desperate need of up degree where new
businesses can have gigantic effect.
Challenges and hurdles
New companies are confronting numerous difficulties and obstacles regardless of
responsibility by the Government to give all the help and money. New businesses
think that its hard to approach credit. Pulling in speculators to store adventures or
getting credits from banks are lasting issues for new businesses. Area is another
obstacle. Area relies upon speculation exercises moreover.
Action Plan
The activity plan uncovered by Mr. Modi is a wave creator, yet to make it a
central improvement for the development of new businesses, it is particularly
important that the ability to choose the reasonability and presence of new
businesses is detracted from the 'between pastoral board.' It is recommended that
rather than 'between clerical board,' a leading group of 'proficient specialists' ought
to be set up to pick on the achievability of begin – ups. Further, to ensure that this
leading group of 'proficient specialists' takes unprejudiced choices on the
applications got, a last arrangement of guidelines ought to be made to direct its
lead while settling on any choice on the 'presence and reasonability' just as
'qualification for tax reductions' of new businesses. On account of any contentions
emerging out of biased choices, one ought to be given an alternative to approach
the Indian Judiciary.

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India's need of gifted work is huge to the point that National Skill Development
Corporation (NSDC) has been ordered to aptitude 150 million Indians by 2022.

REFERENCES

I. https://en.wikipedia.org/wiki/Startup_India
II. https://www.startupindia.gov.in/
III. https://yourstory.com/2016/01/start-up-india-narendra-
modi
IV. https://smallbiztrends.com/2019/03/startup-statistics-
small-business.html
V. http://vikaspedia.in/social-
welfare/entrepreneurship/startup-india-1/startup-india

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 VI. https://inc42.com/features/how-successful-is-pm-modis-
startup-india-programme-heres-the-numberspeak/
VII. http://www.iitbbs.ac.in/startup-centre-objectives.php
VIII. https://indianmoney.com/articles/government-loan-for-
business-startups-in-india
IX. https://inc42.com/features/fund-of-funds-startups-funding-
startup-india/
X. https://alltopstartups.com/2016/09/28/research-methods/
XI. https://us.humankinetics.com/blogs/excerpt/steps-of-the-
research-process
XII. https://www.mbauniverse.com/group-
discussion/topic/business-economy/startup-india-boosting-
entrepreneurship

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