India is a developing country with a mixed economy, so it is very important to develop the Indian economy for the development of the nation. Half of the Indian workers depend on agriculture for their livelihoods. In this article, we have discussed the increasing role of startups in the Indian economy and how it has helped in the development of our country.
India needs over one hundred million jobs annually and, most of the jobs are generated from startups and not from big enterprises. Startup entrepreneurship is important in today's generation as it brings innovation, new jobs and competitive dynamics to the business world and enterprises. In today's world, the role of startups in economic prosperity is increasing. One of the main advantages of startups is that it creates new jobs for the unemployed. Global data shows that startups are creating more jobs in our country as compared to large companies or enterprises. Till now, many of the startups have introduced the latest technology such as Artificial Intelligence, and Robotics, etc. Most of the technology giant companies outsource their operations to startups nowadays. It will also help in increasing the cash flow of the startups. Considering the importance of responsibility that the Indian startups are allotted to play in the expansion of the Indian economy. With the turnover achieved through startups and the convenience of startups that can create a large number of jobs, the ease of use of startup regulation has facilitated the flow of funds from the market to startups.
More job vacancies
The major problem that India is facing is unemployment. The jobs that are created are mostly from startups and not from large enterprises. Since startups are free from economic slowdown and load, they can manage more employees.
Creative ideas create more work
A startup that creates solutions easily will be in high demand, so every startup will try to be creative. Everyone thinks differently so that the solutions found by different startups for the same problem also differ from each other. Also, the smartest and unique methods are further encouraged and create more outsourcing to India.
The explosion of talent from professionals and entrepreneurs for better ROI
India is full of talented professionals, but they don't have the option to highlight it. Startups are looking for talented professionals who can provide them a platform to showcase their unique talents and, they are always encouraged by MNCs, making them spend more money in India.
New technology to cut production costs
Technological advancements will lead to significant improvements in operations and a lower cost of doing business. Startups will discover new technology or create new technology in India that simplifies the workload. When new technologies are accepted and demand increases, many MNCs will show interest in investing in India. Not only this, many advancements in the computer industry along with advances in telecommunications, they have increased employment opportunities and enhanced economic growth in recent years.
More competition which gives more confidence for the job
There is always a need for good healthy competition to improve and update the quality of a product or service. When the competition increases, companies study the customer's behaviour and launch new products, which are user demand. Due to which the demand for the product increases and sales increase, which directly benefits the Indian economy.
More outsourcing of services
Many MNCs are now outsourcing their work to smaller companies as they can concentrate on their core work. When these startup companies prove their talent, many other companies also show interest in our country to outsource their work so that India can get expertise in that field. For example, India is now becoming the VFX hub for the world. Many big companies are outsourcing their work to India which, has an intense impact on the Indian economy.
More flow of foreign money
When more outsourcing comes to India, more foreign money is being circulated and distributed in India, which is good for the growth of the Indian economy.
High demand in the market
Demand increases when you prove your product or service's quality and value for money. It leads to an increase in startup revenue, which reflects the Indian economy positively.
Can reduce imports
When our startups can handle the need for a product or service, we can reduce the import of that product/service that decreases the flow of money to another country and makes that money flow into the Indian market, which is good for the Indian economy.
Can increase exports
When we have more number of startups, then we can produce more products. Also, we can start exporting to other countries, which increases the flow of foreign funds into Indian markets.
New investments
Many multinational companies are closely watching the progress of Indian startups, and they are willing to invest the money which creates wealth for the startups and helps in increasing production that is good for the Indian economy.
Not only this, if many startups support their businesses, then they always prefer to start their company in India, which also increases the job opportunities.
More money flow in the Indian market
When a startup employs people, they start buying products and services that increase the flow of government funds and revenue, thereby boosting the Indian economy.
Change in the face of the city or town
When many startups are located in a particular place, the demand for that location increases. Because many people are trying to stay there to work and the infrastructure of that city changes drastically.
More indirect jobs are essential and, there is an impact of startups in the Indian economy.
When the infrastructure changes, many hotels, homestays, restaurants, bus operators will come up, which indirectly creates many employment opportunities that increase the revenue of the people of that city.
Increase of demand for related service
Many ancillary services are starting for a startup like registration company, marketing company, human resource company, etc., which also creates employment which is good for our economy.
Increase in GDP
When there is an increase in income, people start spending more money in the market, which affects the country's economy directly.
Improves standard of living
When people have money, they will start buying quality products to improve their quality of life, so the demand for good quality products increases that is good for our economy.
Good progress in education
People always like to give good education to their children. When they have a good income with them, they will demand a better educational institute. And many foreign institutes show interest in India, which leads to more employment, and the flow of money leads to progress in society.
Progress in the health segment
People like to have good treatment but, they are mostly expensive. But, when people have the income to spend on them, they demand good treatment that helps hospital management import all modern equipments which, makes India self-sustainable for every treatment.
Progress in the transport segment
As the city progresses the need for transport increases which also gives more jobs in the transport segment.
Startup India is a program that aims to support startups to foster the talent of every entrepreneur. Some of the examples of Unicorns that have done incredibly well in developing the Indian economy are as follows:
MEESHO
The Indian social commerce segment may be in an early stage at this point, but it is expected to grow at a compound annual growth rate of 55%-60% to reach a gross merchandise value of $16 billion-$20 billion by 2025. One of the significant milestones in startups for a developing economy is Meesho's entry into the unicorn club, which has a massive impact on the growth of the Indian economy and startups in its growth dynamics.
This was founded in 2015 by two IIT-Delhi graduates, Aatrey and Sanjeev Barnwal. Meesho is an online reseller startup for an individuals, small and medium businesses who sell products within their network on social channels such as Facebook, WhatsApp, and Instagram. The platform has around 13 million individual entrepreneurs, delivering e-commerce benefits to 45 million customers across India. The platform has around 13 million individual entrepreneurs, delivering e-commerce benefits to 45 million customers across India.
The company claims to have 100,000 registered suppliers in over 4,800 postal codes across 26 cities, generating over Rs 500 crore income for individual entrepreneurs. It has raised $415 million in funding till now from investors such as Facebook, SoftBank, Prosus Ventures, Venture Highway, Shunwei Capital, and Knollwood Investments. Meesho also competes with other young companies like DealShare, Glowroad, Citymall, and Bulbul, which have a long list of investors.
CRED
With only INR 57 Lakh as operating revenue in FY 2020, Kunal Shah-led fintech platform CRED has entered the unicorn club at a whopping valuation of $2.2 billion.
Several big names in the VC ecosystem such as DST Global, RTP Global, Tiger Global, Greenox Capital, Dragoneer Investment Group, and Sofina have placed their bets on CRED, which focuses on premium credit card users, offering them rewards and helping them pay their credit card bills. In the last two years, CRED claims to have added over 5.9 million credit card users with an average credit score of 830.
Last year, the company decided to experiment with e-commerce to increase revenue and capitalize on its user base. It forayed into e-commerce with the CRED store, and in December CRED launched CRED Pay, so that users can use their CRED reward coins on e-commerce sites to unlock discounts.
The company is in the process of tying up with e-commerce partners like BigBasket, Dineout, and ixigo. It also partnered with Razorpay and Visa to develop the features. It followed a pilot project with over 30 merchants, including Vahdam Teams, The Man Company, Epigamia, and Man Matters, before launching the payment feature.
COINSWITCH KUBER
Bengaluru-based CoinSwitch Kuber has become the second Indian cryptocurrency startup to join the unicorn club. The crypto startup closed its Series C round at $260 million at a $1.9 billion valuation. The round was led by Coinbase Ventures and Andreessen Horowitz, marking it as the first investment in India. Existing investors such as Paradigm, Sequoia Capital India, Ribbit Capital and Tiger Global have also participated in this round with Coinswitch Kuber.
It was founded in 2017 by Govind Soni, Singhal and Vimal Sagar Tiwari, as a global aggregator for cryptocurrency exchanges. CoinSwitch launched its India exclusive crypto platform, in June 2020, to make crypto investing easier for Indian retail investors.
The startup claims to have 10 million users on its platform, with an active user base of 7 million users. It also claims a 350 percent increase in the user base since January this year. Prior to this round, the startup had raised $25 million in a Series B funding round from Tiger Global Management in April 2021 before raising $15 million in a Series A round. With the latest round, CoinSwitch Kuber's total funding has gone up to $300 million.
Startups can change the world and, more and more startups will grow with innovation and creativity in the coming years. Entrepreneurship is the only way to increase the economic development of a nation. And a small idea can be called a big innovative solution that can change your future. So if you have an idea, don't let the fear of failure and taking risks to block your dreams. Develop your idea into a startup and contribute to the development of our country. Now, we can conclude that startups are important for the economic development of a nation. We can conclude that startups are making a positive impact on the Indian economy. However, the government needs to promote and create more startups in India so that it helps in increasing the GDP and economy of India. Because at present the GDP of India is very low and also the foreign reserves. The government is encouraging people to start doing business and what steps are being taken for this that is good for the bright future of the startup industry of India. And it will boost the Indian economy as well as GDP in the coming decade.
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