Start-Ups To Play Crucial Role In Making India Third Largest Economy: CEA Nageswaran

The official noted that Tier-II and Tier-III cities have become major contributors to help develop start-ups in the country owing to improved infrastructure and favourable government policies.

Over the last 10 years, the start-up landscape in India has transformed dynamically and has come out as the third largest ecosystem in the world.

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Start-ups will be crucial in India’s journey to become the third largest economy in the world, Chief Economic Advisor (CEA) to the Union Government, V Anantha Nageswaran said. The official noted that Tier-II and Tier-III cities have become major contributors to help develop start-ups in the country owing to improved infrastructure and favourable government policies, a release from Kerala Startup Mission (KSUM) said. 

Addressing the Huddle Global 2023 organised by the KSUM on its last day, Nageswaran noted that India was the fifth largest economy globally and was well on its way to becoming the third largest in some years. “In fact, I will say 7-in-7 is the buzz slogan, that is $7 trillion economy in seven years. $7 trillion economy size by 2030 is possible if India maintains its present growth trajectory, and in that journey startup entrepreneurs are going to play an important role,” the official said, as reported by PTI. 

Nageswaran stated that the active participation of start-ups in India towards building business models on the basis of boosting physical and digital infrastructure will keep on generating efficiency, revenue, and economic returns for the country.

Notably, over the last 10 years, the start-up landscape in India has transformed dynamically and has come out as the third largest ecosystem in the world. The country currently has more than 1.12 lakh start-ups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT) spread across 763 districts. 

Among these start-ups, over 110 are unicorns with an overall valuation of about $350 billion, Nageswaran said. He stated that in terms of innovation quality, India ranks second. Further, he noted that innovation in India isn’t limited to few sectors. “Startups were solving problems in 56 industrial sectors, with 13 per cent of them from IT services, 9 per cent from health and life sciences, 7 per cent from education, 5 per cent from agriculture, and 5 per cent from food and beverages,” he stated. 

Commenting about the role of Tier-II and Tier-III cities, Nageswaran said that 49 per cent of the start-ups came from these regions and turned out to ‘be game-changers as the business advantages in these locations enable entrepreneurs to operate at lower costs as compared to tier-1 cities’.

In addition to improved infrastructure and the government’s supportive policies, the supply of a technically skilled talent pool is a major benefit for start-ups to flourish in these regions. “Historically there was a perception that small towns were difficult places to conduct business....but with improved internet penetration, vastly better physical infrastructure, road, rail and air connectivity, and supportive government policies, this is no longer true,” Nageswaran noted. 

The official applauded Kerala’s start-up journey and said, “KSUM has served as the catalyst since its establishment in 2006 to promote change that propelled the state into the forefront of the global startup arena.”

KSUM is an agency under the Kerala government, set up in 2006 for entrepreneurship development and incubation activities in the state. The fifth edition of Huddle Global, attended by around 1,500 delegates, exhibited sophisticated products from developing sectors like robotics, artificial intelligence, machine learning, augmented reality, virtual reality, life sciences, edutech, agritech, and fintech among others.