Gujarat has emerged as the best performer in developing startup ecosystem for budding entrepreneurs for the third year in a row, along with Karnataka, according to the official ranking of states by the Centre. Meghalaya has topped the list of small states.
The third edition of the State's Startup Ranking 2021 organised by the Department for Promotion of Industry and Internal trade (DPIIT) showed significant improvement in the startup ecosystem in the country, and a higher diffusion of startup culture to smaller states.
The rankings are based on the initiatives taken to develop the startup ecosystem for promoting budding entrepreneurs.
States are categorised as best performers, top performers, leaders and aspiring leaders, on the basis of feedback for the reforms carried out. This year, the exercise assessed the states’ performance across seven reform areas divided into 26 action points.
Telangana, Kerala, Maharashtra, and Odisha have occupied the second tier in the rankings, and are categorised as top performers. Among smaller states, Jammu and Kashmir have entered this list.
Tamil Nadu, Uttarakhand, Uttar Pradesh, Punjab, and Assam have made it to the third tier, categorised as leaders. Arunachal Pradesh, Andaman and Nicobar Islands, and Goa are in this tier as part of the small state's list.
India currently has 70,809 startups nationwide which are recognized by the government, Commerce and Industry Minister Piyush Goyal said while releasing the latest ranking. The country has become the third-largest start-up ecosystem in the world over the past five years as the number of recognized startups have risen from just 726 in FY17.
Goyal asked officials to see whether a district-level ranking can be created for startups to ensure more competition and dynamism in the ecosystem.
Due to the impact of COVID-19, the period of consideration for the third edition of the States’ Startup Ranking was from 1st October 2019 to 31st July 2021. A total of 31 States and UTs took part in the exercise this year which included 24 States and 7 UTs.
The Commerce and Industry Som Parkash has allocated at least Rs 2,791.29 crore to Small Industries Development Bank of India, which in turn committed Rs 6,795 crore to 82 Alternative Investment Funds (AIFs), data submitted to Parliament shows. Meanwhile, Rs 8,785 crore has been invested by supported AIFs in 574 startups.
States in focus
Gujarat has now been recognized as the best performer for the third consecutive year. An open challenge launched by the Student Startup and Innovation Policy Cell (SSIP) of Gujarat's Education department has found an honourable mention in the report that accompanied the rankings.
It engages students, innovators, and startups to ideate and implement sustainable solutions to enable communities to respond to the health, social and economic challenges of the pandemic. Through this challenge, entrepreneurs could receive a seed grant of up to Rs 2 lakh per project.
Karnataka has organized 12 programs to encourage the participation of startups in public procurement activities including Demo Day, Exhibition, and GeM workshops. These programs witnessed representation from more than 10 Government departments and benefitted more than 20 participating startups, the report said.
Karnataka's Minister for Electronics, Information Technology - Biotechnology, Science and Technology Ashwathnarayan C.N lauded the state's startup ecosystem recognized. He said in 2020, Karnataka had announced a 'Scheme of Special Incentives' for the Electronics System Design and Manufacturing (ESDM) sector, becoming the first state to do so.
He added that the state aims to attract Rs. 5000 crores worth of investments and create more than 43,000 new jobs through the initiative.