PrintFriendlyIn the midst of India’s profound economic and social changes, the influence of government initiatives on entrepreneurship and broader socio-economic development has left a remarkable mark. Examining key schemes and their contributions to empowerment, economic growth, and societal progress, this article aims to reveal the pivotal role played by the Modi government in shaping India’s entrepreneurial landscape and driving overall socio-economic development.
The initiatives such as “Startup India,” “Stand Up India,” “PM Vishwakarma,” “Svanidhi Yojana,” and “Mudra Yojna” are integral components of India’s efforts to foster entrepreneurship, empower marginalized communities, and promote economic development. These programs aim to provide support, financial assistance, and resources to startups, women, scheduled castes, scheduled tribes, artisans, street vendors, and micro-enterprises, respectively. Through these initiatives, India strives to create a conducive environment for business growth, skill development, and financial inclusion, ultimately contributing to the country’s holistic development by driving economic growth, reducing unemployment, and promoting social and economic empowerment.
The Indian government’s Startup India program offers businesses recognition as Startups through DPIIT, providing tax benefits, labor and environmental compliance flexibility, expedited patent examinations, and access to intellectual property incentives. Additionally, various government funding and investment schemes support their growth. Eligibility for these benefits is contingent upon specific criteria outlined by the Startup India initiative. The program has significantly impacted India’s startup ecosystem, nurturing innovative and high-growth potential enterprises.
The Startup India initiative under the Department for Promotion of Industry and Internal Trade (DPIIT) has implemented several projects and adopted ongoing strategies to support the growth of the Indian startup ecosystem. Some of its key initiatives include:
The State Startup Ranking Framework, now in its fourth edition as of 2022, aims to promote entrepreneurial growth throughout India. This latest iteration comprises 7 reform areas with 25 action points, accumulating 85 marks out of a total of 100, including a feedback exercise. Notably, 33 of the States and Union Territories participated, with categorization based on population size standardizing the ranking process into Category-A (population more than 1 crore) and Category-B (population less than 1 crore).
The National Startup Awards is an annual event that aims to acknowledge outstanding startups and ecosystem enablers. In the upcoming 2023 edition, awards will be given in specific categories based on discussions about current Indian and global economic priorities. The Startup India Seed Fund Scheme (SISFS) is designed to offer financial assistance to startups for various developmental stages, helping them progress to the point of securing investments from different sources. Additionally, the MAARG Portal by Startup India serves as a comprehensive mentorship platform, providing startups with access to expert advice tailored to their specific growth needs. Moreover, the SCO Startup Forum creates a collaborative platform for stakeholders from startup ecosystems within all SCO Member States, with the goal of empowering local startup communities and fostering multilateral cooperation. Lastly, the Startup India Investor Connect, an AI-powered platform, simplifies the process of presenting startup ideas to potential investors, thereby facilitating investment opportunities.
The Indian startup ecosystem has played a pivotal role in driving employment, offering diverse job opportunities across various sectors. In 2022, Indian startups were responsible for generating 2.7 Lakh jobs, a significant increase compared to 2 Lakh jobs generated in 2021 and 1.5 Lakh jobs in 2020. These employment opportunities cover a wide spectrum of skill levels and sectors, including technology, e-commerce, healthcare, and agriculture. As per the Economic Survey 2022-23, DPIIT-recognized startups (self-reported) have created over 9 lakh direct jobs, marking a notable 64% increase in 2022 compared to the average number of new jobs created in the previous three years. (STATES’ STARTUP RANKING , 2022)
Stand-up India is another scheme enabling holistic and inclusive development of the society. The Stand-Up India Scheme aims to facilitate bank loans ranging from 10 lakh to 1 crore for the establishment of new enterprises, wherein at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and at least one woman borrower are involved. These enterprises may operate in various sectors, including manufacturing, services, agri-allied activities, or the trading sector. Additionally, in the case of non-individual enterprises, it is required that at least 51% of the shareholding and controlling stake be held by either an SC/ST or woman entrepreneur.
As of 21st March 2023, a total sanction of Rs.40,710 crore has been granted under the Stand-Up India Scheme, benefitting 180,636 accounts since its inception.
Specifically, the details of SC, ST, and woman beneficiaries under the Stand-Up India scheme as of 21st March 2023 are as follows:
– SC Beneficiaries: 26,889 accounts have been sanctioned a total amount of Rs. 5,625.50 crore.
– ST Beneficiaries: 8,960 accounts have been sanctioned a total amount of Rs. 1,932.50 crore.
– Woman Beneficiaries: 144,787 accounts have been sanctioned a total amount of Rs. 33,152.43 crore.
In total, 180,636 accounts have been sanctioned as part of the Stand-Up India Scheme, with a cumulative amount of Rs.40,710.43 crore.
The scheme has not only provided crucial financial assistance but has also served as a catalyst for socio-economic upliftment and the promotion of diversity in business ownership. The comprehensive data underscores the tangible impact of the scheme, emphasizing its pivotal role in creating opportunities, stimulating economic growth, and fostering a more equitable and inclusive society.
The PM Vishwakarma scheme, with a budget of Rs. 13,000 crores, aims to support artisans in 18 traditional trades. By December 30, 2023, it had garnered 48.80 lakh enrollments and 1.32 lakh applications, highlighting its impact. Artisans can register for free via biometric-based portals, receive a Vishwakarma Certificate and ID card, and access skill development, including a stipend of Rs. 500 per day during training. Beneficiaries also receive a toolkit incentive of Rs. 15,000.
The PM Vishwakarma scheme offers artisans collateral-free credit support of up to Rs. 1 lakh in the first phase, and up to Rs. 2 lakh in the second phase, at a subsidized interest rate of 5%. This program not only provides essential financial aid but also reduces the risks typically associated with conventional borrowing methods, creating a conducive environment for artisans to develop and scale their businesses.
The initiative offers a financial incentive of Rs. 1 for each digital transaction, up to a maximum of 100 transactions per month. This not only promotes the use of digital channels for business activities but also encourages financial inclusion and technological empowerment among artisans.
The SVANidhi scheme has demonstrated significant progress in the last three years, playing a pivotal role in uplifting the street vendors of India. By providing working capital loans in three installments, the scheme has empowered over 36 lakh street vendors across the country. As of June 30, 2023, a total of 48.5 lakh loan applications have been sanctioned, resulting in the disbursement of over 46.4 lakh loans totaling Rs. 5,795 crore. Notably, the scheme has placed strong emphasis on digital onboarding and training, equipping PM SVANidhi beneficiaries with the necessary skills to conduct digital transactions, thereby enhancing their social acceptance and dignity.
The SVANidhi scheme’s provision of collateral-free loans has significantly benefited street vendors, with the initial loan amount of Rs. 5,000 crore now being increased to Rs. 8,100 crore. This extension has provided street vendors with additional working capital to expand their businesses, contributing to their self-reliance or ‘AtmaNirbharta.’ Furthermore, the augmentation of the budget for promoting digital payments, including cashback incentives for vendors, underscores the scheme’s comprehensive approach towards empowering street vendors economically and technologically.
The achievements of the PM SVANidhi scheme signify its positive influence, with 31.9 lakh sanctioned loans and 29.6 lakh disbursements amounting to Rs. 2,931 crore as of April 25, 2022. Additionally, the endorsement of second loans, totaling 2.3 lakh sanctioned and 1.9 lakh disbursements amounting to Rs. 385 crore, further demonstrates the scheme’s sustained support to street vendors’ entrepreneurial endeavors. The substantial number of digital transactions conducted by the beneficiary street vendors, along with the cashback incentives and interest subsidy, highlight the scheme’s impact in promoting digital literacy and financial stability among the target group.
The Pradhan Mantri Mudra Yojana (PMMY) is a significant initiative by the Indian government, aiming to provide micro credit and loans to income-generating micro-enterprises in the non-farm sector, encompassing activities ranging from manufacturing and trading to agricultural pursuits such as poultry, dairy, and beekeeping. With over ₹23.2 lakh crore sanctioned in 40.82 crore loan accounts, the scheme has substantially supported entrepreneurs, fostering business growth and contributing to the overall economic development of the nation. Notably, the allocation of loans has facilitated the entry of fresh ideas and ventures into the market, with approximately 21% of the total loans sanctioned to new entrepreneurs. Moreover, the scheme has prioritized gender inclusivity and empowerment, as well as providing opportunities for historically marginalized communities, with about 68% of the accounts belonging to women entrepreneurs and 51% to entrepreneurs from SC/ST and OBC categories. This intentional focus on supporting underrepresented groups has contributed to a more diverse and inclusive entrepreneurial ecosystem, underpinning more equitable economic growth.
The category-wise breakdown of loans is also informative. The majority of loans, 83% in number and 40% in amount, have been sanctioned under the Shishu category, which caters to small businesses in their early stages. This strategic approach to loan distribution reflects a focus on nurturing and supporting the foundational growth of budding enterprises. By providing targeted financial assistance to small businesses in their nascent stages, the scheme has played a pivotal role in fostering entrepreneurship at its grassroots, thereby promoting a culture of innovation and enterprise.
The PM Vishwakarma, SVANidhi, Mudra Yojana, Stand Up, and Start Up India schemes have significantly impacted India’s social and economic landscape by targeting diverse demographics, reducing unemployment, proliferating micro and small enterprises, fostering innovation, and promoting inclusive growth. These initiatives have also contributed to economic stability and self-reliance for marginalized communities, addressing socio-economic disparities and promoting holistic development in Indian society.
(Alok Virendra Tiwari holds a Bachelor’s Degree in Political Science from Mumbai University. He is currently part of the Chanakya Fellowship in Social Sciences at Chanakya University, Bengaluru. His research interest revolves around Governance, Political Behaviour and Foreign Policy. Views expressed are his own)