DIPP launches states’ ranking on startup initiatives

07 Feb 2018


Minister of commerce and industry Suresh Prabhu on Tuesday launched the 'States' Startup Ranking 2018' at an event organised at the Pravasi Bhartiya Kendra, New Delhi.

The States Startup Ranking framework, launched by the Department of Industrial Policy and Promotion, aims at ranking states for establishing a robust ecosystem for supporting startups. The framework will evaluate states on parameters such as startup policy and implementation, incubation support, seed funding support, angel and venture funding support, simplified regulations, easing public procurement, awareness and outreach.

The minister also released a compendium of good practices for strengthening startup ecosystem. The handbook identifies 95 good practices implemented by central and various state governments.

Speaking on the occasion, Suresh Prabhu said, ''I am confident that the ranking framework would promote healthy competition among the states and enable them to further learn, share and adopt best practices across the seven identified key parameters. I am sure the exercise would generate collaboration amongst all the stakeholders to turn the Hon'ble Prime Minister's vision to have startups in every district and every block a reality''.

Minister of state for commerce and industry C R Chaudhary said, ''This compendium of good practices will foster learning and healthy entrepreneurship spirit in all the states and facilitate all policy makers in formulation of policies and scheme for overall development of startup ecosystem in the country.''

''The key objective of the Startup States Ranking framework is to encourage states to take proactive steps towards strengthening the enabling startup ecosystems at the state level. Selection of the right parameters to effectively cover all aspects was one of the major challenges faced while developing the framework. Benchmarking studies and extensive stakeholder feedback have helped us arrive at a well-balanced framework. Our aim is not only to measure the extensive efforts made at the state level towards building a strong startup ecosystem, but also to enable an environment of constant learning through dissemination of good practices,'' Ramesh Abhishek, secretary, Department of Industrial Policy and Promotion, added.

The DIPP startup list includes Andhra Pradesh, Goa, Kerala, Rajasthan, Telangana, Karnataka, Odisha, Chhattisgarh, Gujarat, Bihar, Uttar Pradesh, Madhya Pradesh, West Bengal, Assam, Haryana, Punjab, Jharkhand, and Uttarakhand.

Of these, nine states, including Delhi, Haryana, UP, Gujarat, Maharashtra, Karnataka, Kerala, Tamil Nadu and Telangana, cover over 82 per cent of the total 6,875 DIPP-recognised startups.

These 18 states together are mapping 95 best practices together that other states can follow.

For instance, under Pillars of Implementation, Andhra Pradesh has been quoted for its Innovation Society, while Karnataka has been recognised for the Startup council set up under Karnataka CM.

As per Inc42's recently released Indian tech startup funding report 2017, Bengaluru took the top spot with 366 deals worth  $7.5 billon funding in 2017.  The second spot was taken up by Delhi with total investments of $4.billion across 223 deals.

Mumbai, Hyderabad, and Pune took the third, fourth and the fifth rank respectively.

As far as Tier II and Tier III cities are concerned, the funding for these cities declined by 46 per cent with just 28 deals in comparison to 2016.

Some states have recently announced new funds and initiatives to boost their startup ecosystem.

Uttar Pradesh provided sustenance allowance of Rs15,000 ($236.09) per month for a period of one year at the idea stage. At the pilot stage, startups will be provided marketing or commercialisation assistance of up to Rs10 lakh ($20000) to launch their prototype product and services in the market at the pilot stage.

Punjab formulated the 'Punjab Startup and Entrepreneurship Development Policy 2017' through which it supports women entrepreneurs in the state to come forward and start their own ventures.

Andhra Pradesh chief minister N Chandrababu Naidu is reported to have allocated Rs100 crore ($15.6 million) to create a separate startup fund for budding entrepreneurs.

Uttar Pradesh chief minister Yogi Adityanath has set up a Rs1,000-crore ($156.2 million) startup fund for helping entrepreneurs in the state.

North East Venture Fund was the first dedicated venture capital fund for the Northeastern region. The size of the fund would be about Rs100 crore ($15.5 million).

Karnataka's agriculture department has set aside about Rs10 crore ($1.5 million) fund to be administered by the information technology and biotechnology (ITBT) department. In March 2017, Priyank Kharge also announced a fund of Rs10 crore ($1.4 million) for women entrepreneurs of the state.

In March 2017, the government of Bihar set up a startup fund as a trust, with an initial corpus of Rs500 crore ($76 million).

The State Startup Ranking is expected to bring hope for Tier 2 and Tier 3 City Startups.

In the Union Budget 2018, the government once again laid its impetus on the growth of startup ecosystem in the country. With India being a diverse country, and the entire process getting channelled through 29 state governments, the success in this mission can only be achieved if each state can bring out the best.

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