Context: Recently, the Results of the second edition of Ranking of States on Support to Startup Ecosystems were released by Ministry of Commerce & Industry.
About States’ Startup Ranking Exercise

• It is conducted by Department for Promotion of Industry and Internal Trade (DPIIT).

Objectives

• To foster competitiveness and propel States and Union Territories to work proactively towards uplifting the startup ecosystem.
• It has been implemented as a capacity development exercise to encourage mutual learning among all states and to provide support in policy formulation and implementation.

Features

• The framework has 7 broad reform area, consisting of 30 action points ranging from Institutional Support, Easing Compliances, Relaxation in Public Procurement norms, Incubation support, Seed Funding Support, Venture Funding Support, and Awareness & Outreach.
• States and UTs have been divided into two groups to establish uniformity and ensure standardization in the ranking process.
• While UTs except Delhi and all States in North East India except Assam are placed in Category ‘Y’. All other States and UT of Delhi are in Category ‘X’.

For the purposes of Ranking, States are classified into 5 Categories:

• Best Performers
• Top Performers
• Leaders
• Aspiring Leaders
• Emerging Startup Ecosystems

States are also recognized as Leaders in 7 reform areas of support to startups.

• State Specific Report for each of the 25 participating entities has also been released, containing a comprehensive analysis of respective ecosystem, which highlights strengths and priority areas for future.
• A ‘Compendium of Good Practices’ adopted by various States in supporting startups has also been released.
• It identifies 166 good practices, which may be directly used by States to identify and implement newer initiatives.

States’ Startup Ranking Exercise, 2019

• This is the second edition of the States’ Startup Ranking Exercise.
• A total of 22 States and 3 Union Territories participated in the exercise.
• Gujarat has occupied the top spot in Ranking for the second year in a row.
• A proactive mechanism to identify regulatory issues from disruptive sectors, conceptualising iCreate (one of the largest start-up incubators in the country), and its student start-up and innovation policy helped Gujarat bag the Best Performer tag.
• Karnataka and Kerala were the other top performers.
• Andaman & Nicobar bagged the top spot among Union Territories (UTs).
• India has become the third-largest start-up ecosystem in the world with over 36,000 start-ups recognised under the Startup India initiative.

Definition of Start-up in India and its Landscape in India

Few Government Initiatives regarding Start-ups

• Start Up India Fund: Under the Startup India program, the Government created the 'Fund of Funds for Startups (FFS) with a corpus of INR 10,000 crore.
• Policy Reforms for Startups: These include requirement of distributable profits for three years for a company to be eligible to issue shares with differential voting rights.
• Start-up Cells: The Cell will work towards redressal of grievances & tax-related issues of Startups with respect to the administration of the Income-tax Act, 1961.
• National Startup Advisory Council: To advise the Centre on measures needed to build a strong ecosystem for nurturing innovation and start-ups in the country.
• Aatmanirbhar Bharat ARISE-Atal New India Challenge: It is a national initiative to promote research & innovation and increase competitiveness of Indian startups and Micro, Small and Medium Enterprises (MSMEs).
• AIM-iCREST: It is an Incubator Capabilities Enhancement program launched by NITI Aayog for a Robust Ecosystem focused on creating high performing Startups.