Tech & Society

Startup India Underserving: Mission only of benefit to 18% of India’s startups

A new survey by Local Circles has found that Indian SMEs are being vastly underserved by Startup India with only 18% of startups claiming to having benefited from the program. Having spoken to over 33,000 startups in coming to this conclusion and it provides an insight into the usefulness of programs like Startup India in fostering the local ecosystem.

In addition to this, 39% startups have also claimed to have received one or more tax notices in the financial year and that the tax burden is now becoming disincentivising. Many complained of having being sent notices after having been through a fundraising round and had overly optimistic valuations. 30 percent of their income is taxed by the government, who have said that the aim is to curb money laundering through SMEs.

According to their website, Startup India was the “flagship initiative of the Government of India, intended to build a strong ecosystem that is conducive for the growth of startup businesses, to drive sustainable economic growth and generate large scale employment opportunities.” Under their Action Plans certain tax exemptions were offered to make the idea of initiating a business more lucrative but the receipt of notices have left a sour taste in many a new founder’s mouth.

According to Local Circles, some startups like Flipkart, Grofers, InMobi have decided to move their registered office from India to Singapore as they have to pay less in taxes abroad and spend lesser time on compliance as well as get access to better funding opportunities.

In addition to this, the report also found challenges to improving on the system remain blocked by corruption and beauracratic inefficiencies.  The government has yet to respond to the new numbers and will need to respond to the criticisms before “Make in India” slowly turns to “Move from India”.

Arjun Harindranath

Arjun studied law and philosophy before travelling to Europe in 2008 to be a full-time writer and journalist. He's eager to catalogue the thousands of startup stories India has to offer as well as bringing his insight into recent developments within the tech space.

Recent Posts

Indian esports makes history at BRICS Esports Championship in Moscow

In a historic moment for Indian esports, Wasfi “YoshiKiller” Bilal secured a silver medal at…

12 hours ago

Geek Appeal: New gadgets & apps on the block

The Tech Panda takes a look at recently launched gadgets & apps in the market.…

13 hours ago

Ecosystem harkat: India’s Biotech & space tech, early stage tech startups & women entrepreneurs in blockchain

The Tech Panda takes a look at what’s buzzing in the startup ecosystem. The startup…

14 hours ago

Harris vs. Trump: Forecasting Bitcoin’s Future in a Post-Election Economy

With just days until the outcome of the U.S. presidential race, Bitcoin enthusiasts across the…

2 days ago

USDT Controversy: Tether Denounces WSJ’s U.S. Investigation Claims as ‘Irresponsible Journalism’

The Wall Street Journal released an article  claiming that the U.S. has launched an investigation…

2 days ago

Transforming green finance for Indian SMEs: The AI & Fintech revolution in rural development

The financial industry is undergoing a remarkable evolution as the confluence of technology and sustainability…

5 days ago