Economic Survey 2022 Lauds the Indian Startup Ecosystem Which Ranks 3rd In the World

As of January 14, 2022, India has 83 unicorns with a total valuation of $ 277.77 billion, said the Survey

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The Economic Survey 2022, tabled by Finance Minister Nirmala Sitharaman on Monday (January 31) in Lok Sabha, has predicted 8 to 8.5 per cent Gross Domestic Product (GDP) growth in FY23 (April 2022 to March 2023). For the ongoing financial year 2021-22 (FY22), the GDP growth has been estimated at 9.2 per cent.


The annual document prepared by the Ministry of Finance under the guidance of the Chief Economic Advisor (CEA) provides a summary of annual economic development across the country during the financial year.

The Survey details the state of different sectors of the economy and the reforms that should be undertaken to accelerate growth. This time, it has many mentions about India's startup ecosystem as well.

Unicorns and IPOs

The Survey spoke about how India overtook the UK to emerge as the third highest country in number of unicorns after the US and China which added 487 and 301 unicorns respectively in 2021. "Startups in India have grown remarkably over the last six years. The number of new recognised startups have increased to over 14,000 in 2021-22 from only 733 in 2016-17. As a result, India has become the third largest startup ecosystem in the world after the US and China. Further, a record 44 Indian startups have achieved unicorn status in 2021 taking the overall tally of unicorns in India to 83, most of these are in the services sector," the Survey said.

"As of January 14, 2022, India has 83 unicorns with a total valuation of $277.77 billion," it added and also mentioned how over the recent years, Delhi has replaced Bangalore as the startup capital of India. "Over 5,000 recognised startups were added in Delhi while 4,514 startups were added in Bangalore between April 2019 to December 2021. With a total of 11,308 startups, Maharashtra has the highest number of recognised startups," it said.

The Survey also noted that the year 2021-22 so far has been an exceptional year for the capital markets. "There was a boom in fundraising through IPOs by many new-age companies/tech startups/unicorns. In April-November 2021, INR 89,066 crore were raised via 75 IPO issues, much higher than in any year in the last decade," the Economic Survey said.

Quoting data from the Securities and Exchange Board of India (SEBI), it further said that eight IPOs were subscribed more than 100 times in 2021, while 11 IPOs were subscribed between 50 and 100 times in the same period. "The tremendous response by all categories of investors in IPOs of companies was reflective of not only the confidence in markets, but also that in corporate sector performance and prospects of the economy in the long run," it read.

Patenting, Key To Knowledge-based Economy

Further, the Survey went on to discuss that most of India's startups are in the IT/ knowledge-based sector and how intellectual property, specifically patents, are key to this knowledge-based economy. "There has been a gradual increase in the filing and granting of patents in India. The number of patents filed in India has gone up from 39,400 in 2010-11 to 45,444 in 2016-17 to 58,502 in 2020-21 and the patents granted in India has gone up from 7,509 to 9,847 to 28,391 during the same time period. Consequently, India's ranking in

Global Innovation Index has climbed 35 ranks, from 81st in 2015-16 to 46th in 2021," it said.

However, it mentioned that while this is a remarkable progress, the number of patents granted in India is still a fraction compared to patents granted in China, USA, Japan, and Korea. According to the World Intellectual Property Organization, the number of patents granted in China, USA, Japan, Korea stood at 5.30 lakh, 3.52 lakh, 1.79 lakh, 1.35 lakh respectively for 2020.

"One of the key reasons for relatively low patents in India vis a vis USA, China, etc is India's low expenditure on Research and Development (R&D) activities, which was 0.7 per cent of its GDP in 2020. However, this is not the only reason. The procedural delays and complexity of the process is another cause for low patents in India. The average pendency for final decision in acquiring patents in India is 42 months as of 2020. This is much higher than 20.8, 20, 15.8 and 15 months respectively for USA, China, Korea and Japan," the Economic Survey said.