The new startup India initiative has a variety of benefits, including the ease of exit for startups. For instance, the Insolvency and Bankruptcy Code, 2016 has made exiting a startup much simpler. The law also makes it easier to close a business within 90 days of filing an application. Moreover, the GST Bill has spurred the growth of new businesses in the country. The new laws also make it easier to manage unpredictable issues, which often cause startups to fail.
Investing in startups boosts entrepreneurship
Investing in startups in India is an exciting opportunity. The country is a burgeoning consumer market, with a huge population, diverse culture and spending habits, and an entrepreneur-friendly government. This combination of factors has attracted top international investors to India, where they are boosting the entrepreneurship ecosystem through investments in nimble, sharp-minded teams. The startup industry is the new age of business, brimming with opportunities and challenges.
In the past decade, investments in startups in India have created millions of jobs in the country. These companies have also improved the economic productivity of the nation by introducing new products and services. The government has taken several measures to support startups and is eager to give incentives.
Getting loans from banks is difficult for startups
Startups in India face many challenges when it comes to obtaining bank loans. Most startups have limited tangible assets and are unable to provide collateral. As a result, banks are less willing to extend loans to these startups. Because of these challenges, startups often turn to nontraditional sources of debt funding.
Banks have strict lending guidelines and may reject startups based on their lack of revenue and cash flow. Startups, with high expenses and little customer base, present a high credit risk. Furthermore, a new business may be entering a sector with declining growth or saturation.
Job creation in startup ecosystem
The government is doing its bit to boost the startup ecosystem in India. As of June 20, over 50,000 startups registered with the Department of Promotion of Industry and Internal Trade (DPIIT) have created more than 5.5 lakh jobs. This makes India the third largest startup ecosystem in the world. According to the government, the average startup creates 11 jobs.
Startups create jobs for people and those people start spending money, which eventually boosts the economy. In addition, the government gets a boost in revenue. The government has pledged Rs 10,000 crore to support these companies.
Impact of Covid-19 pandemic on entrepreneurship
The global COVID-19 pandemic has impacted the global economy in a number of ways, including affecting entrepreneurship. It has reduced demand in many sectors, and posed restrictions on mobility in many countries. While it has harmed entrepreneurship, it has also created new business opportunities.
The emergence of this virus has triggered a plethora of scholarly studies, due in part to the looming threat COVID-19 poses to small businesses and the critical role they play in the economy. This special issue analyzes 14 contributions to the literature and provides a range of perspectives on the pandemic. It concludes with some ideas for post-pandemic research.
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