Launched in January 2016, the Narendra Modi government’s Startup India campaign initially drew applause from both founders and investors. The tax exemptions, patent reforms, and incubation programmes under this scheme were aimed at encouraging budding entrepreneurs. A single point of contact, the Startup India hub, was also established for the entire ecosystem. The burdensome red tape was reduced, too.
These steps have also encouraged several state governments also to support entrepreneurship in the world’s third-largest startup ecosystem.
But nearly two years since it’s launch, the programme has had a pretty underwhelming success.
For instance, as part of the Startup India Action Plan, the Indian government had set up a Fund of Funds with a total corpus of Rs 10,000 crore ($1.6 billion) to support these companies over the next four years. This money is disbursed via the Small Industries Development Bank of India.
Yet, almost half-way into plan tenure, just over 10% of the total fund has been released. As on December 18, “Rs 605.7 crore has been committed by SIDBI [Small Industries Development Bank of India] and Rs 90.62 crore disbursed to 17 Alternative Investment funds, who in turn have invested Rs 337.02 crore in 75 startups,” CR Chaudhary, minister of state for commerce and industry, stated in a written response to a question in the Lok Sabha on Dec. 18.
In all, the government’s department of industrial policy and promotion has so far recognised over 5,350 startups in India.
Maharashtra, where India’s financial capital Mumbai is located, has the highest number of startups at 1,079. Home to India’s Silicon Valley Bengaluru, the state of Karnataka followed with 853 startups. National capital Delhi came in third with 748.
The Startup India Hub, a virtual online platform connecting various stakeholders like startups, investors, etc, currently has 15,000 registered users and has resolved upwards of 75,000 queries since its inception. Absolute newbies have also benefitted from the hand-holding. The learning and development module of the Startup India programme, which offers free entrepreneurship courses, has been used by 1,89,000 individuals so far, Chaudhary added.
A recent poll of over 33,000 startups showed that few entrepreneurs have actually gained anything from the Indian government’s Startup India initiative.
This article first appeared on Quartz.