Startups create over 4.2 lakh jobs

Despite Covid-19 pandemic, over 34,000 startups in India generated direct employment to over 4.2 lakh people as of September 2020. That works out to about 12 workers in each firm.  

The latest data shows that 36% of all jobs were created in Maharashtra and Karnataka, which are also states that have the most number of start-up firms, followed by Delhi.

According to data from the ministry of commerce and industry, the Department for Promotion of Industry and Internal Trade (DPIIT) there are 36,106 recognised startups, of which 34,267 have self-reported employment data.

The numbers may be higher than 4.2 lakh as it emanates from firms recognised by DPIIT — the nodal agency for startups registration. However, India has over 50,000 startups according to StartupIndia initiative. Industry body Nasscom had, late last year said tech startups had created at least 60,000 direct jobs as of December 2019.

In 2016, start-ups created 1.9 lakh such jobs startups through listed 16,105 recognised startups.

Guruprasad Mohapatra, secretary, DPIIT, was quoted in TOI as saying: “These are figures given by startups registered with us. The registration enables them to avail of some direct and indirect tax benefits. It also helps them gain access to other departments and ministries of the central government. But yes, not all startups register with us.”

Though there is no sector-wise breakup of data, the majority of these jobs are likely to be in startups from the IT services sector, followed by healthcare and life sciences, education and food and beverages.

This is because a November 2019 document of DPIIT shows that of the 24,948 firms registered, 3,443 were IT services, 2,063 in healthcare and Lifesciences, and 1,766 and 1,009 were from the other two categories.

Though the rise in numbers of job creation looks healthy, new employment is happening only in patches.