New Delhi: India’s startup sector has seen a significant rise with government data showing over 300 percent increase in the number of recognised startups in the country in the last five years.
The Department for Promotion of Industry and Internal Trade (DPIIT) has recognised 1,17,254 startups as of December 31, 2023. Over 34,000 of them were recognised in 2023 alone, up from 10,604 in 2019.
The data also shows these startups significantly contributed to job creation. In 2023, 3.90 lakh direct jobs were created by start-ups with numbers showing a significant year-on-year rise in such jobs in the last five years. DPIIT numbers show startups created over 12.42 lakh direct jobs since 2019.
While the numbers are impressive, the startup industry comes with its challenges as well making it difficult for an enterprise to become a profitable business.
As per Tracxn, a company that provides data on private markets, the number of failed enterprises aka deadpooled startups was a whopping 34,848 in 2023. These companies either shut down or were on the brink of it. The number was 18,049 in 2022.
The reasons for so many startups going belly-up range from not achieving product-market fit, high investment costs, to poor risk management and ignoring customers.
To ensure that startups in the country have a better chance of success, technology is bound to play a pivotal role, and with the advent of Artificial Intelligence in recent years, the government has rightly focused on this novel tech to create a conducive environment for deep tech startups.
Earlier this month, PM Narendra Modi-led cabinet approved the comprehensive national-level IndiaAI mission with a budget outlay of Rs.10,371.92 crore.
The government, in an official handout, said the decision was in furtherance to the vision of Making AI in India and Making AI Work for India.
The IndiaAI mission is aimed at promoting innovation in AI through public-private partnership mode, and this is where the government aims to collaborate with startups in this exciting sector.
So what is IndiaAI Mission?
According to the central government, the IndiaAI mission is set to establish a comprehensive ecosystem catalysing AI innovation through strategic programs and partnerships across the public and private sectors.
By democratising computing access, improving data quality, developing indigenous AI capabilities, attracting top AI talent, enabling industry collaboration, providing startup risk capital, ensuring socially impactful AI projects, and bolstering ethical AI, it will drive responsible, inclusive growth of India's AI ecosystem.
Among other initiatives, the government will allocate funds towards subsidising private companies looking to establish AI computing capacity in the country.
Components of IndiaAI mission
This substantial financial infusion, slated over the next five years, is poised to catalyse various components of the IndiaAI Mission, including pivotal initiatives like the IndiaAI Compute Capacity, IndiaAI Innovation Centre (IAIC), IndiaAI Datasets Platform, IndiaAI Application Development Initiative, IndiaAI FutureSkills, IndiaAI Startup Financing, and Safe & Trusted AI.
According to the Union Minister of State for Electronics and IT, Skill Development and Entrepreneurship, Rajeev Chandrasekhar, IndiaAI mission will benefit Indian citizens and contribute to the expansion of India’s economy.
“AI is going to be the kinetic enabler for India’s digital economy. The India AI program will catalyse India’s AI ecosystem and position it as a force shaping the future of AI for India and for the world. This financial outlay will fortify the IndiaAI Startup Financing mechanism, facilitating streamlined access to funding for budding AI startups and catalyzing their journey from product development to commercialization. The proposal also includes funding provisions for industry-led AI projects aimed at fostering social impact, propelling innovation and entrepreneurship,” he said.
Why is Govt bullish about IndiaAI?
The IndiaAI Innovation Centre (IAIC) which will be a leading academic institution, ensuring streamlined implementation and retention of top research talent. Funds approved by the Cabinet will enable IAIC to spearhead the development and deployment of foundational models, with a specific emphasis on indigenous Large Multimodal Models (LMMs) and domain-specific models, leveraging edge and distributed computing for optimal efficiency.
The IndiaAI Datasets Platform, which will be developed by the Independent Business Division (IBD) of IndiaAI, is slated to receive a boost to enhance accessibility, quality, and utility of public sector datasets, in order to ensure data-driven governance and catalyzing AI-based innovation and research.
Simultaneously, the IndiaAI FutureSkills program will focus on expanding the reach of AI education by increasing the accessibility of graduate and post-graduate AI programs, while also establishing Data and AI Labs that will not just be spread across major Indian cities but also smaller towns and cities to impart foundational-level courses in Data and AI.
Aligned with the broader vision of the IndiaAI Mission, these initiatives aim to bolster India’s global leadership in AI, foster technological self-reliance, ensure ethical and responsible AI deployment, and democratize the benefits of AI across all strata of society.
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