UP Startup Policy | Fill gaps to unleash entrepreneurial prowess – Moneycontrol
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States across the country have been introducing policies to encourage entrepreneurship over the past few years. One such state that took a considerable leap towards building a startup ecosystem is Uttar Pradesh. The Yogi Adityanath government introduced the Uttar Pradesh 2020 Startup Policy with a clear vision to encourage entrepreneurship and innovation. The policy is expected to boost UP’s GDP in the long run, and make the state a preferred destination for startups, both in terms of starting up new ventures and for scaling up existing ones. Now the government has introduced amendments to the policy to cater for the needs of a wider audience, and promote a startup culture across Uttar Pradesh. Revamped Policy The UP 2020 Startup Policy is targeted at all aspiring entrepreneurs who wish to start their own venture, and make a mark in the business world. The policy also aims to encourage existing entrepreneurs to scale up their operations, and make investments in the state. One of the highlights of the policy is that it promises to introduce entrepreneurship in the school curriculum to make the youth aware of the various opportunities the business world has to offer. This initiative will hone the entrepreneurial skills of aspiring students, help in inculcating an entrepreneurial mind-set and address the gap of lack of awareness at the grassroots level. The increased focus on women, marginalised sections of the society, transgender community, and an additional incentive for these sections is a shot in the arm. Twenty-five percent seats of all incubators are reserved for women and transgender community. Additionally, the government’s focus on the long-ignored Purvanchal and Bundelkhand areas is visible in the policy. There are additional incentives for startups and incubators in these areas, which will help in persuading more people to take up entrepreneurship. With new expressways, a defence corridor, a centre of excellence, in the eastern UP, the startups incentives are another way to provide economic development opportunities to the most indigent part of the state. The number of centres of excellence have been increased from zero to three, and the monthly maintenance allowance from ₹15,000 to ₹17,000. Additionally, the amount of assistance for seed capital and marketing has been increased from ₹5 lakh to ₹7.5 lakh. This will help the startups scale their operations which will further contribute to the state government’s goal of achieving a $1 trillion GDP. The amendments in the startup policy define several categories of startups, such as women-led startups, village impact startups, circular economy startups, renewable energy startups, and Climate Change startups. With 52 government-recognised incubators and over 7,600 startups registered with the Department for Promotion of Industry and Internal Trade (DPIIT), Uttar Pradesh appears well positioned to achieve its financial goals. The Lacunae That said, there are challenges that need to be addressed at the earliest. Despite continued efforts, the numbers of startups in the tier two and three cities are not increasing. As per Startup India, out of 7,000 registered startups, 4,500 are from only three districts: Gautam Buddha Nagar, Ghaziabad, and Lucknow. Many districts in the state, like Chitrakoot, Etah, Farrukhabad, Kaushambi, among others have less than 10 startups, and the policy does not provide for bridging this disparity regarding the number of startups across cities. When it comes to incubators, many are barely active with less than 10 startups under each one. UP does not have an active private investors network, the government needs to put some serious thought and effort into this area to bring in investors well ahead of the Global investment summit in February 2023. Finally, there is a lack of clarity from the government’s side on the distribution and impact of the Rs 1,000 crore funds of funds. The Way Forward The startup policy has been instrumental in giving a fillip to the ecosystem in the state—in the time since it was introduced, the number of startups have gone from less than 1,000 to 7,000-plus, and the number of incubators have increased from seven to 52 plus during the same duration. But there is scope for improvement. Uttar Pradesh is the largest state of India in terms of population and has a great market potential for agritech, edtech, healthcare, and manufacturing-based startups. A right start has been made through the startup policy, and now the amendments; what needs to be done now is to fill the gaps that exist. Collaborations with other departments and experts will be a step in the right direction. Pranav Dwivedi is a startup mentor, and consultant. Views are personal, and do not represent the stand of this publication.