Strengthening Startup Ecosystem through Prompt Biz Registration

Introduction

India’s transformative decade has unleashed strong entrepreneurial growth. Company registrations are high, and new sectors—AI, drones, space, and clean tech—are rising. Yet progress slows due to manual registration and limited use of AI, blockchain, APIs, and cloud. With the ₹1 lakh crore RDI Scheme and a DeepTech Fund of Funds, the foundation is set to convert innovation into enterprises and jobs.The next unlock is fast, reliable business registration as the first step from idea to enterprise. Strengthening Startup Ecosystem through Prompt Biz Registration.

Current Status of Entrepreneurship (Startups) in India

1. India is the third-largest startup hub, with over 1,30,000 recognized startups, compared to just 400 in 2015-16.
2. Startup funding grew 15 times since 2015-16, with private equity and venture capital playing significant roles.
3. In 2024, startups raised over $12 billion, with 75% coming from international sources.
4. Substantial Growth: Around 1.65 to 1.70 lakh startups are registered with the Department for Promotion of Industry and Internal Trade (DPIIT).
5. Regional Growth: Nearly 50% of startups now come from Tier II and Tier III cities, such as Indore, Jaipur, and Ahmedabad, offering untapped growth potential.

Government Initiatives for Entrepreneurship (Startups) Growth

1. Digital shift : The SPICe+ incorporation system and digitised portals have made starting up easier. Over 80% of registrations happen online. This shows strong progress toward a tech-enabled, founder-friendly state.
2. RDI push: Recently government has launched ₹1   lakh cr Research Development and Innovation (RDI) Scheme, along with DeepTech Fund of Funds.
3. New Sectors: Policies now allow startups to operate in space, geospatial technology, defence, and drones, enabling ventures into cutting-edge domains.
4. Startup India: Launched on 16th January 2016, Startup India is a flagship initiative by the Government of India to foster innovation and create a thriving startup ecosystem. Its goal is to drive economic growth and generate large-scale employment opportunities
5. Startup India Seed Fund Scheme (SISFS): Launched in 2021 with a corpus of ₹945 crore, the SISFS supports startups at various stages, including proof of concept, prototype development, product trials, market entry, and commercialisation. The scheme, operational since 1st April 2021, is overseen by the Experts Advisory Committee (EAC), which evaluates and selects incubators for fund allocation.
6. Fund of Funds for Startups (FFS) Scheme: Launched in June 2016 with a corpus of ₹10,000 crore, the Fund of Funds for Startups (FFS) aims to boost access to domestic capital for startups. Managed by SIDBI, it funds SEBI- registered Alternative Investment Funds (AIFs), which then invest in startups through equity and equity-linked instruments.
7. Credit Guarantee Scheme for Startups (CGSS): The Credit Guarantee Scheme for Startups (CGSS) provides credit guarantees for loans to DPIIT-recognised startups from Scheduled Commercial Banks, NBFCs, and Venture Debt Funds. Implemented by the National Credit Guarantee Trustee Company Limited (NCGTC), it aims to offer credit guarantees up to a specified limit, easing access to funding for startups.
8. Atal Innovation Mission (AIM): Launched in 2016 by NITI Aayog, the Atal Innovation Mission (AIM) aims to promote innovation and entrepreneurship across India. It includes initiatives like Atal Tinkering Labs at the school level to foster creativity, Atal Incubation Centres to build a robust startup ecosystem, and Atal Community Innovation Centres to serve unserved and underserved regions.
9. MeitY Startup Hub (MSH): The MeitY Startup Hub (MSH) aims to foster a vibrant innovation and startup ecosystem by uniting technology innovation stakeholders and promoting economic growth through innovation and technological advancement.

Challenges to Entrepreneurship (Startups) Growth

1. Limited Domestic Spending: India’s per capita GDP is around $3,500, far lower than China’s $12,000–15,000, restricting market demand.
2. Access to Patient Capital: Deep tech startups struggle with long-term funding. Despite raising $12 billion in 2024, 75% came from international sources. A specialised domestic fund is needed..
3. Bureaucratic Hurdles: Complex regulations and approval delays hinder startup growth and operations.
4. Regulatory Concerns: Corporate mismanagement in startups like Byju’s highlights the need for better governance and self-regulation.
5. Skill Gaps: Curricula lack focus on emerging skills like AI and data science, slowing innovation.
6. IPR Challenges: India paid $14.3 billion in IPR royalties in 2024 but earned only $1.5 billion, indicating innovation gaps.
7. Geographic Disparity: Startups in Tier II and III cities need better infrastructure, education, and inclusivity to unlock potential.

Global Best Practices for Entrepreneurship (Startups) Growth

1. Estonia’s e-Residency lets anyone register an company within hours. The process is fully paperless and supported by blockchain. Its cloud-based, distributed setup provides both transparency and strong cybersecurity.
2. New Zealand uses a New Zealand Business Number to unify all business data. Name reservation usually takes about two hours, and incorporation is finished in one to two days. Application Programming Interface (API) -linked, machine-readable data lowers errors and reduces manual checks.
3. Singapore’s Bizfile completes registration in minutes. It uses AI for name checks and sets up tax and compliance instantly. The “register once, update everywhere” approach cut licensing from 14 forms with 800 fields to a single form with 90 fields.
4. Global trend : More than 41 countries now offer digital registration with AI support, real-time tracking, and blockchain security.

Way forward

1. Limited time: Set 24 hours as the standard for completing company registration. Time certainty sends a strong signal to founders and investors.
2. Use of AI:

• Use AI-driven document validation and automated name screening.
• Apply risk scoring and auto-approval so most applications finish within a day, and only exceptions need review.
• Leverage IndiaAI Mission and regional-language chatbots to guide applicants end-to-end.

4. Parallel approvals : Enable seamless, automated data sharing between MCA, CBDT (PAN/TAN), CBIC (GST), DPIIT (Startup India), and the Ministry of MSME (Udyam). Move from sequential to parallel approvals to shorten timelines.
5. Make international and domestic processes identical in timelines and documentation. Singapore and the UAE show that simple, predictable onboarding accelerates capital and technology inflows.
6. Incorporate proven global practices: Estonia’s paperless, blockchain-backed cloud; New Zealand’s single business ID and API data flows; Singapore’s real-time cross-agency integration with AI name checks and “register once, update everywhere.

Question for practice:

Discuss how adopting AI, blockchain, APIs, and parallel inter-agency approvals can achieve 24-hour business registration and strengthen India’s startup ecosystem.

Source: The Economic Times