“A Study On Influence Of Start-Ups On Indian Economy”

Research proposal submitted

To
“Shree Chanakya Education Society’s Indira Institute of
Management, Pune”
For the degree of Masters of Business Administration (MBA)
By
Div :- B (Group: B 1.2)
Sr. No. Name Roll No.

1 Shruti Bhansali 55
2 Utkarsh Mande 65
3 Tanishqa Shinde 60
4 Soham Pande 58
5 Jugal Patil 19
6 Abhishek Uppalwad 02

Under the guidance of

Dr. Atul Pise
Dr. Punam Bhoyar
Year 2023

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 ABSTRACT
India has second largest population in the world. This has led to creating opportunities
for self - employment on massive scale. Hence the need of the hour is to develop the
entrepreneurship skills in the citizens of India so that self - employment opportunities
can be created.
In this research paper, significant relationship between number of new start-ups and
Indian GDP growth have been analyzed. India is now trending with huge growth in
the new start-ups both tech and space in recent years. The new start-up schemes
launched by the government has helped many entrepreneurs to have easy access to
funds.

INTRODUCTION TO THE TOPIC

In August 2015, the Hon’ble Prime Minister, Shri Narendra Modi, announced the
launch of the National flagship initiative – Startup India, with a mandate to promote
and encourage young entrepreneurs of our country. He envisioned the aim of the
initiative to transform India into a Startup nation, “A country of job creators instead of
job seekers”.
Startup Ecosystem in India is the most effective ecosystem that enables the country to
progress in less time. People form startup Ecosystem, startups at various stages, and
multiple organizations, whether virtual or physical, interacting as a system to create
startup companies from scratch.
Any legal entity will be identified as startup if--

• Registered not prior to 5 years

• If its turnover doesn’t exceed to 25 crores in the last five financial year
• It is working towards innovation, development, deployment and
commercialization of new products, processes or services driven by technology
or intellectual property
Govt. Initiatives to support Startups--

• MUDRA bank is launched to growth of small businesses

• India Aspiration Fund is established to encourage startup ecosystem
• SMILE SIDBI Make in India Loan for Small Enterprises is launched to provide
soft loans to MSMEs.
• Startup Exchange- SEBI has relaxed the listing norms to boost startups.
• SETU- Self Utilization and Talent Utilization which provides technical assistance
and incubation to startups.
• Startup Incubation funds are set up to create ecosystem for startups in India.
• Regulatory environment has been simplified for startups.

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 TOP STARTUPS IN INDIA
• CRED
Cred was founded in 2018 by Kunal Shah; by 2021, the company had onboarded over
5.9 million users and processed about 20% of all credit card bill payments in India. As
of April 2021, Cred offered six different products - Cred Rent Pay, Cred Cash, Cred
Pay, Cred Store, and Cred Travel Store, etc. However, on 20 August 2021, Cred also
launched a Peer to Peer(P2P) lending feature known as Cred Mint that aims to
monetize through its 7.5 million users.

• PharmEasy
The company was founded in 2015 by Dharmil Sheth and Dhaval Shah in Mumbai.
In 2020, PharmEasy merged with API Holding, the parent company. In 2021, the
company was reported to be acquiring Thyrocare. PharmEasy's consolidated
revenue closed ₹2360 crore in the financial year 2021, which is nearly three times
higher than the previous fiscal years. Its net loss has also nearly doubled to ₹641
crore.
• Meesho
Cofounders Vidit Aatrey and Sanjeev Barnwal aim to provide an end-to-end service
by vetting suppliers, providing shipping and facilitating payment. More than 200
million housewives in India have used Meesho for extra income, while it is also
popular among college students and small business owners.

• Groww
Groww is an Indian online investment platform that targets first-time investors and
millennials. Groww allows investors to open an account electronically and transact
in mutual funds and stocks online. As of June 2018, Groww had partnered with 34
mutual fund houses and around 5000 mutual funds were available on the platform.
As of Sep 2020, the company had raised $59 million in venture capital with 8 million
users.

• Nykaa
Nykaa is an Indian e-commerce company, founded by Falguni Nayar in 2012. It sells
beauty, wellness and fashion products across websites, mobile apps and 100+ offline
stores. In 2020, it became the first Indian unicorn startup headed by a woman. As of
2020, it retails over 2,000 brands and 200,000 products across its platforms.

LATEST DEVELOPMENT
There are over 14,600 Startups recognized under Startup India that are spread across
479 districts, covering all 29 States and 6 UTs. In order to provide growth stage.
Funding to Startups, a Fund of Funds (FFS) of INR 10,000 Crore has been setup. This
is supporting innovators and risk takers in their path towards the creation of a New
India. The Government has already committed INR 1,611.7 Crore to 32 Venture
Capital Funds through FFS. When these committed funds complete their fund-raising

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process, then a total of INR 13,888 Crore will be available to be used by Startups.
Thus, Government contribution has catalyzed 8X funding for Startups.
As of August 29, 2022, India had emerged as the world's third-largest startup
ecosystem, with over 77,000 DPIIT-recognized startups spread throughout 656
districts. These startups are simultaneously enabling more jobs than large companies
or enterprises in the same industry.

LITERATURE REVIEW

1.Arihant Jain “Startups Restoring The Indian Economy?- A Study On Impact

Of Startups On The Indian Economy” A Student’s Journal Of Shri Ram College
Of Commerce, Volume-2, Issue-1, 2017-18This paper give the fundamental points
of interest to put the present startups environment in which is innovative inside the
Indian setting and feature portion of the related difficulties confronting India today by
contrasting policies of various nation and states to discover which is most positive and
depicts endeavors that is made by the legislature of India towards Innovation and
ecosystem of startups. It is found that startup India program is a major step towards
development since it tends to the majority of the key difficulties building up of effective
and ecosystem.
2.Pilot survey on Indian startup sector major findings conducted by the Reserve
Bank. It presents the feedback received from the survey respondents and does not
reflect the views of the Bank. Comments/suggestions are solicited from stakeholders
on the findings of the survey as well as on methodology, usefulness of information and
scope for improvement in the survey. The same may be forwarded to - The Director,
E-Commerce and New Age Survey Division, Department of Statistics and Information
Management, Reserve Bank of India, C-8, 2nd floor, Bandra-Kurla Complex, Bandra
(East), Mumbai-400051
3. Meenakshi bindal, bhuwan gupta, sweety dubey “role of startups on Indian
economy” international journal of engineering and management research, ISSN
9online): 2250- 0758, ISSN (print)- 2394-6962, volume-8, issue-5, October-2018
The main objective is to analyze initiative for startup India, to understand the problems
faced by the startups, to study the impact of startups on people, to study the
awareness about the startups. It is based on secondary data. It is found that the
government must help startups promote themselves, not just in India but across the
global, as well as create policies that are startups friendly so that Indian startups get
a major boost and they can further create better employment.

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 NEED FOR STUDY

This study wants to highlight the contribution of startups in the Indian economy. GDP
of India raised with increasing job opportunities, per capita income by the advancement
of startups.
The role of startups in economic prosperity is increasing. One of the main advantages
of startups is that it creates new jobs for the unemployed. Global data shows that
startups are creating more jobs in our country as compared to large companies or
enterprises.

STATEMENT OF RESEARCH PROBLEM

The Research Statement is “What is the impact of startups on Indian economy?”

With favorable demography, the culture of entrepreneurialism and open economic
environment, India is highly conducive of entrepreneurial activity. However, India’s
startup economy has not been able to reach full maturity and most startup die in their
infancy. More active engagement between established organization and startup can
help the later harden their business models, jump into the big leagues and accelerate
growth while enabling established companies to bring in the entrepreneurial spirit of
innovation and swiftness. The mutual success of startups and companies will drive
India towards a more dynamic future by creating more jobs and boosting the economy.

OBJECTIVES OF THE STUDY

• To study the impact of Startups on GDP at current price (as per 2019)
• To study the impact of startups on GNI at current price
• To study the impact of startups on per capita GDP
• To study the impact of startups on exports
• To study the impact of startup on imports
• To study the impact of startups on balance of payments
• To study the impact of startups on foreign exchange reserve

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 FUTURE PLANS
The participating startups were asked about their future plans and a summary of their
feedback is given below.
1 Almost 58 per cent of the startups had plans to get listed on the Indian stock
exchanges in the next five years (Chart 8.1). Most of these startups were in health,
software development, IT consulting/solution sectors and were of age less than three
years.
2 About 24 per cent of the respondents intended to seek acquisition at a later
date (Chart 8.2). Such startups were mostly in product development, software
development and IT consulting/solution sectors and were of age less than three years.
3 Over 63 per cent of the respondents reported to have plans to hire at least 20
new employees in the next two to three years (Chart 8.3). These startups were mainly
from software development, IT consulting/solution and health sectors and were of age
less than three years
About 10 per cent of the respondents had intentions to exit (Chart 8.4). Funding
requirements and market conditions were reported as major reasons for such
intentions.

Source: Pilot Survey Report By RBI

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 RESEARCH METHODOLOGY
• Research design
In this study, we have taken descriptive research design.
• Sources of data
We have taken secondary data for the study.
• Data collection tools
We have used RBI reports, research publication, newspaper, reports of DIPP
etc. for the study.
• Population
All year’s data of startups registered and Indian economy data.
• Sample size
We are taking 4 year as sample size from 2016 to 2019. Because startup Indian
initiative has been implemented from 2016. We will use total no. of registered
startups data from DIPP report and economic variables data from RBI report.
We will use recognized startups for analysis.

➢ Impact of startups on GDP at current price

Table No: 1 No. of startup and GDP at current price

Year No. of startups GDP at current price

recognized by DIPP (Rs in cr.)

2016 503 13771874

2017 5373 15362386

2018 8724 17095005

2019 17390 19010164

➢ Impact of startup GNI at current price

Table: 2 - No. of startups and GNI at current price

Year No. of startups Gross national income at

recognized by DIPP current price (in cr.)

2016 503 13612095

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 2017 5373 15185986

2018 8724 16910192

2019 17390 18816538

➢ Impact of startup on per capita income GDP (Rs)

Table No:3 No. of startups and per capita GDP (Rs.)

Year No. of startups Per capita GDP (RS.)

recognized by DIPP
2016 503 107341

2017 5373 118263

2018 8724 129901

2019 17390 142719

➢ Impact of startup on export

Table No: 4 No. of startups and exports

Year No. of startups Exports in Rs. Crore

recognized by DIPP
2016 503 1716384

2017 5373 1849434

2018 8724 1956515

2019 17390 2307663

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➢ Impact of startup on import

Table No.5 No. of startups and imports

Year No. of startups Imports in RS. crore

recognized by DIPP
2016 503 2490306

2017 5373 2577675

2018 8724 3001033

2019 17390 3594373

➢ Impact of startup on balance of payment

Table No: 6 No of startups and balance of payment

Year No. of startups Balance of payment Rs.

recognized by DIPP Crore
2016 503 115830

2017 5373 144234

2018 8724 280816

2019 17390 -20204

➢ Impact of startup on foreign exchange reserve

Table No: 6 No. of startups and foreign exchange reserve

Year No. of startups Foreign exchange reserve

recognized by DIPP in US million
2016 503 31891

2017 5373 43224

2018 8724 52401

2019 17390 30094

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 CONCLUSION

Startups can change the world and in coming years more and more startups will grow
with innovation and creativity. Entrepreneurship is the only way to enhance the
economic growth of a nation. And a small idea can be termed into big innovative
solution which can change your future. So, if you have an idea, don’t block your dreams
because of fear of failure and taking risk. Develop your idea into startup and contribute
to the growth of our nation. Now we can conclude that startups are important for
economic growth of a nation.
We can conclude that startups are positively affecting to Indian economy. However,
government need to promote and create more startups in India so that it helps to
increase GDP of India. Because currently GDP of India is very low and foreign reserve
too.
Government is encouraging people to start doing business and what steps are being
taken for it which is actually good for bright future of India startup industry. And this will
certainly boost Indian economy as well as GDP in upcoming decade. The survey
revealed that startups were able to augment employment generation as they grew.
Data and analytics, health, education and agriculture were major startup sectors in the
country. Some of the constraints cited by the startups pertained to access to new
markets, finance and lack of skilled labour/technology/talent/distribution channel.
Future plans of the startups included hiring staff for supporting business expansion,
getting listed on the Indian stock exchanges and seeking acquisition, among others.

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