Bhubaneswar: As the country is observing its National Start Up day on Thursday, and when the country has emerged as Number 3 on Start Up world map, the time is apt to put a glare on Start Up ecosystem in Odisha.
As on date, the Department for Promotion of Industry and Internal Trade (DPIIT) registered Start Ups in the State stands at 2,484. In the yardstick of registered Star-Ups, the State stood at 14th across the country.
STATE | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 (Upto June) |
ODISHA | 187 | 280 | 397 | 451 | 620 | 549 |
The above data shows the pace of setting up of Start Ups in the State has picked up the pace in last 2-years.
START UPs PROFILE IN ODISHA
Even as Start Ups in Odisha have covered the whole gamut of sectors ranging from IT to AI, Agriculture, Advertising to Media and Entertainment, Health to Education, Retail to Renewable Energy et al, majority of Start Ups in the State come from IT sector (20%), followed by Healthcare services (10%), Food and Beverages (8%).
Agricultural start ups in the State account for a share of 5%.
GEOGRAPHIC DISTRIBUTION OF START UPS
As per the data available with Start Up Odisha, State HQ Khurda have the lion’s share in Start Ups set up in the State.
- Khurda – 65%
- Angul – 8%
- Cuttack – 5.5%
- Western Odisha – Average of 4%
- Lowest – Mayurbhanj and Puri – 1.3% each.
EMPLOYMENT GENERATED
As per the data with DPIIT, the country has benefitted from the swift surge of Start Ups, as it has generated direct jobs to the tune of 16, 67, 519 (16.67 lakh).
The direct jobs created in Odisha given below.
STATE | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
ODISHA | 2248 | 2220 | 3742 | 4526 | 6532 | Approx 7.9K |
The above data showed Pandemic impact on job generation 2020 , 2021 in the State.
The Start Up sectors that have churned out high directs jobs belong to IT, Healthcare, Education, Food and Beverages, Agriculture, Construction, Professional and commercial services.
At present, Odisha doesn’t have good footprint of Star Ups in construction, professional and commercial services.
DEEP CONCERN
As per the data released by Ministry of Commerce and Industry, the State seems lagging in getting Central funds under the following schemes, when fund constraint has been the prime factor for Start Ups in the State.
- Startup India Seed Fund Scheme (SISFS): This scheme ensures easy availability of capital to entrepreneurs at the early stages of growth. The capital assistance is mooted for the stage of Start Ups that are considered as make-or-break time.
- Under the scheme, capital support is granted to startups with good business ideas.
- It grants assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization.
- Rs. 945 crore has been sanctioned under the SISFS Scheme for period of 4 years starting from 2021- 22.
- Fund of Funds for Startups (FFS) Scheme: This is established with a corpus of Rs. 10,000 crore to meet the funding needs of startups.
- Small Industries Development Bank of India (SIDBI) is the operating agency for FFS
- It has made capital available for startups at early stage, seed stage and growth stage
- Also played a key role in facilitating raising of domestic capital, reducing dependence on foreign capital and encouraging home grown and new venture capital funds.
When the Fund schemes are so important for accomplishing high success rate of Star Ups, a reality check on fund flow to start-ups in the State shows dismal result.
REALITY CHECK - THE RED BLIPS
When Odisha has around 2,484 Start Ups, only a handful in the State could avail the FFS or SISFS benefits, and it doesn’t augur well for Start Ups sustainability in the State.
- FFS via AIFs
STATE | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 (upto Oct |
ODISHA | 1 | 0 | 2 | 0 | 8 | 6 |
- SISFS: Under this scheme, total funding approved and routed to startups via selected incubators. The scheme was started in FY 2021-22. In Year 2024, upto Oct, the ministry has approved fund to the tune of Rs 454 cr.
STATE | 2021 | 2022 | 2023 | Upto OCT 2024 |
ODISHA | Rs 0.10 Cr | 2.37cr | 4.68cr | Rs 9.94cr |
WHY POOR FUND FLOW TO START UPS IN ODISHA?
A glance at the above data shows, though Start Ups in the State are flourishing at a good pace, the support system in the State is not growing in tandem.
The absence of sufficient incubators and AIFs (Alternative Investment Funds) in the State has been attributed to the poor inflow to Odisha under FFS and SISFS schemes.
The Odisha govt has to address the support systems like AIF and Incubators in need to ensure sustainability of Start Ups in the State.
Because, Central funds will come when the following conditions are met.
- SIDBI will provide capital to SEBI- registered Alternative Investment Funds (AIFs) which in turn invest in startups. And, AIFs supported under FFS are required to invest at least two times of the amount committed under FFS in startups.
- SISFS provides financial assistance to seed stage startups through incubators only.
