STARTUP SPUR NEEDS BUDGETARY PUSH

Budget 2023 will need to address the needs of the 87,988 recognised startups in India, which constitutes the third largest startup ecosystem in the world.

- TULSI JAYAKUMAR

These startups, which are present across multiple sectors IT services, healthcare, education, professional and commercial services, and agriculture among others have not just placed India on the global startup map, they have also contributed significantly to the nation's Gross Domestic Product (GDP) and employment. In September 2022, there were 107 unicorns in India, with an aggregate valuation of USD 341 billion. Further, according to the Department for Promotion of Industry and Internal Trade (DPIIT), as of November 2022, Indian startups had contributed to more than 8.6 lakh direct jobs.

One of the biggest challenges startups face is access to funding, which has been exacerbated in the last year. Thus, while the Covid-19 pandemic, especially in the initial period, witnessed a growth in venture capital funding, the situation has been grim globally since 2022, leading to the usage of terms such as "funding winter". Indian startups too have witnessed a drop in funding from $37.2 billion in 2021 to $24.7 billion a massive 35% drop-in 2022. A PwC India report placed the figure for such startup funding in India at $2.7 billion in 2022 Q3, which was the lowest in the last two years.

The government may help startups ease their funding challenges through specific budgetary provisions aimed at startups.