Over 5,000 startups shut amid funding woes, however job development continues: Commerce Ministry, ETCFO
India’s startup sector, lengthy celebrated for its innovation and job creation, has seen a regarding rise in closures. In accordance with authorities information greater than 5,000 startups registered underneath the Startup India initiative have shut down, accounting for 3.3% of the 1.52 lakh startups acknowledged by the Division for Promotion of Business and Inner Commerce (DPIIT).
The data was shared by Jitin Prasada, Minister of State within the Commerce Ministry, in a written reply to a question within the Lok Sabha.
Maharashtra Leads in Startup Closures
Maharashtra has witnessed the best variety of closures, with 929 startups shutting their doorways. Karnataka (644), Delhi (593), Uttar Pradesh (487), and Telangana (301) spherical out the states with the best shutdowns. Business consultants level to elements akin to fierce competitors, inadequate funding, and unclear market methods as key causes behind the closures.
Job Creation Amid the Challenges
Regardless of the wave of closures, the Startup India initiative has generated substantial employment. Over 16.6 lakh direct jobs have been created throughout greater than 55 industries. The IT providers sector has emerged as the biggest contributor, including 2.04 lakh jobs, adopted by healthcare and life sciences (1.47 lakh), skilled providers (94,060), training (90,414), building (88,702), and meals and beverage (88,468).
These figures counsel that whereas some startups are struggling, others proceed to contribute to India’s broader employment panorama.
MSMEs Additionally Hit Laborious
The challenges dealing with India’s entrepreneurial ecosystem lengthen past startups. Micro, Small, and Medium Enterprises (MSMEs) have additionally suffered vital setbacks. As of November 15, 2024, 61,469 MSMEs, primarily micro-units, have closed for the reason that launch of the Udyam portal in July 2020. The tempo of closures has accelerated not too long ago, with over 12,000 MSMEs shutting down between July and November 2024.
