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

Can you really find parking in 5 minutes? Tech promises a breakthrough in Delhi-NCR

If you’ve ever circled endlessly in Delhi-NCR’s crowded streets, searching for a parking spot while…

3 days ago

Decoding the future of advertising: How blockchain is solving ad fraud, privacy & engagement challenges

Advertising has never been about anything other than connection — brands connecting with people through…

3 days ago

AI goes global: Best universities abroad offering world-class Artificial Intelligence degrees

As we navigate a world with algorithms predicting consumer behaviour, robotic-assisted surgical procedures, and intelligence…

7 days ago

Ness Digital Engineering launches ATONIS: An AI-powered engineering workbench to accelerate product innovation

Bridging intelligence and engineering maturity for a digital-first world Today’s engineering teams face mounting pressure…

2 weeks ago

War by algorithm: As AI & robotics enter our defense budgets what will our battlefields look like?

As Artificial Intelligence (AI) and robotics redefine the battlefield, how should we feel about it?…

2 weeks ago

Funding alert: Tech startups that raked in moolah this month

The Tech Panda takes a look at recent funding events in the tech ecosystem, seeking…

2 weeks ago