Unleashing India’s Entrepreneurial Spirit

• 28 Jul 2025

This editorial is based on “Transforming a Nation of Job Seekers,” published in The Financial Express on 26/07/2025. The article presents a compelling case for complementing India’s skilling efforts with a strong push for mass entrepreneurship. It aligns with the vision of the Draft National Skill Policy 2025 and argues that to truly realise the goal of Viksit Bharat.

For Prelims: Startup India Initiative, Startup India Seed Fund Scheme (SISFS), Atal Innovation Mission (AIM), Fund of Funds for Startups (FFS) Scheme  

For Mains: State of India’s Entrepreneurship Ecosystem in India, Challenges Related to Entrepreneurship and Related Reforms   

India’s demographic dividend with nearly 65% of its population under 35 presents a powerful opportunity for economic growth. But to truly harness this potential, India must go beyond job creation and focus on fostering a culture of mass entrepreneurship. The Draft National Skill Policy 2025 lays a strong foundation for large-scale skilling, but without complementary efforts to enable local enterprise, the demographic advantage may remain untapped. 

What is the Present State of India’s Entrepreneurship Ecosystem? 

• Rapid Expansion of the Startup Base: India’s startup ecosystem is now the world’s 3rd largest, with over 1.57 lakh Department for Promotion of Industry and Internal Trade (DPIIT) recognised startups as of December 2024, up from just 502 in 2016.  
• Rise of Tier II and III Cities as Beacons of Growth: While major hubs like Bengaluru, Hyderabad, Mumbai, and Delhi NCR have been at the forefront of India’s Entrepreneurial transformation, smaller cities are increasingly contributing to the momentum with over 51% of the startups emerging from Tier II/ III cities. 
  • Through initiatives like Startup India, the government has played a pivotal role in nurturing this growth and empowering the next generation of entrepreneurs. 
• Fintech Driving Entrepreneurial Momentum: Fintech is leading India's Entrepreneurial Ecosystem with India ranking 2nd in global fintech adoption (~87% usage), with rapid growth in digital payments, lending, and insurtech. 
  • The fintech sector in India is projected to reach a valuation of $420 billion by 2029, with a compound annual growth rate (CAGR) of 31%.  
• AI-Led Innovation Surge: Entrepreneurship in India is increasingly driven by AI in India with over 70% of startups are integrating artificial intelligence into their operations by mid-2025, especially in healthcare, edtech, and retail. 
  • As per the BCG-NASSCOM Report 2024, India’s AI market is projected to grow at a CAGR of 25-35%, reinforcing its potential for innovation and job creation. 
  • While AI automates routine tasks, it is simultaneously generating new opportunities in data science, machine learning, and AI-driven applications. 
• Policy-Driven Entrepreneurial Reform: India’s entrepreneurship boom is no longer centralized states like Uttar Pradesh, Assam, and Gujarat are launching targeted startup and innovation policies with dedicated venture funds, incubation networks, and single-window clearances.  
  • For instance, Delhi's Draft Industrial Policy (2025–35) includes a ₹400 crore startup Venture Capital (VC) fund and industry-academia tech parks. These sub-national ecosystems are localizing innovation and giving rise to “startup-ready” governance. 
• Entrepreneurship Beyond Tech- Agripreneurs & Artisans on the Rise: India’s entrepreneurial spirit is expanding beyond tech to include agripreneurs, artisans, and self-help groups (SHGs).  
  • Platforms like DeHaat, KisanKonnect, and Loop are digitizing agri-supply chains for smallholder farmers. 
• Rise of the Solopreneur & Creator Economy: India’s gig and creator economy is booming, with more individuals monetizing content, expertise, and services via platforms like YouTube and Instagram.  
  • As of 2025, India boasts over 2 to 2.5 million active digital creators, many operating without traditional teams or VC funding. From fitness coaches to vernacular educators and AI content designers, a new generation of individual entrepreneurs is reshaping the definition of “business.” 

What are the Key Impediments to the Growth of India's Entrepreneurship Ecosystem? 

• Inadequate Job Creation: The number of job seekers far exceeds the formal employment opportunities available.  
  • Without promoting entrepreneurship alongside job creation, India’s large youth population could become a burden instead of a benefit. 
  • Draft National Skill Policy 2025 states that 110 million students, 220 million Not in Employment, Education, or Training (NEETs), and 20 million unemployed persons are seeking or set to seek employment, highlighting the scale of India’s job market challenge. 
  • According to the McKinsey Report (2020), India needs to create 90 million non-farm jobs by 2030 to absorb the 60 million new workers expected to enter the workforce based on current demographic trends. 
• Uneven Access to Capital: A large section of aspiring entrepreneurs, especially women, people with disabilities, and those from marginalised backgrounds, find it difficult to access loans or investment, owing to a lack of collateral, digital access, or formal credit history. 
  • The NITI Aayog report shows that in FY 2021–22, around 79% of Mudra accounts held by women were in the Shishu category, while only 10–11% were Kishore, and a mere 4% Tarun, reflecting limited access to larger loans.  
  • As of July 2024, the Stand Up India scheme has facilitated over 2.35 lakh loans to SC/ST and Women entrepreneurs across the country. Still, many borrowers continue to face disproportionate barriers due to the lack of collateral or bank-level biases. 
• Inadequate Infrastructure and Digital Divide: NSSO (National Sample Survey Office) data (2024) reveals a staggering disparity stating that only 24% of rural households have internet access, compared to 66% in cities. 
  • Also, despite growing UPI penetration and platforms like Jan Dhan-Aadhaar-Mobile (JAM) trinity and Digital Saksharta Abhiyan (DISHA), many first-time entrepreneurs especially women and marginalised communities continue to face barriers in accessing formal credit, digital tools, and market linkages due to lack of awareness, inadequate documentation, or poor connectivity. 
• Limited Reach of Entrepreneurial Support Systems: While urban start-ups enjoy infrastructure, mentorship, and funding access, rural and small-town entrepreneurs often lack the necessary networks, awareness, and ecosystem support. 
  • As per the World Economic Forum (WEF) (2024), in the last 10 years, over 120,000 startups have been registered in India, making it the 3rd largest startup ecosystem in the world.  
    • Yet, that concentration still leaves many rural districts without meaningful access to incubation, mentorship or capital.  
• Low Female Labour Participation: Though the Female Labour Force Participation Rate (LFPR) improved to 31.7% in 2023–24, only 15.9% of working women are in salaried jobs, with the rest mostly in low-productivity, self-employed roles.  
  • Without targeted skilling and entrepreneurship support for women, gender gaps will persist.  
  • In addition to limited job access, women entrepreneurs face barriers like the glass ceiling, limiting upward mobility, and the glass cliff, placing them in high-risk leadership roles with a higher risk of failure. 
• Shallow Innovation Pipeline and Patent Commercialization Gap: India ranks high in patent filings globally, but many of these patents remain unutilised due to weak industry-academia linkages and poor commercialisation infrastructure.  
  • This in turn discourages potential entrepreneurs who lack access to incubators, legal support, and technology transfer mechanisms needed to translate innovations into viable businesses. 
  • India has seen a 24.6% increase but the number of patents actually reported as “working” dropped dramatically from 16,181 in 2019–20 to just 560 in 2022–23. 
    • As per the Economic Survey 2024-25, despite a 17-fold rise in patent grants since 2014–15 and improved innovation rankings (India ranked 39 in GII 2024), most patents remain unutilised due to weak industry-academia linkages and poor tech transfer infrastructure. 
• Lax Implementation of Existing Entrepreneurship Initiatives: Despite initiatives like the  Skill India Mission and Atal Innovation Mission (AIM), their impact has been limited due to uneven implementation and lack of a coordinated, district-level institutional framework.  
  • With limited penetration in rural and aspirational districts, these schemes fall short in ensuring outreach, scalability, and inclusivity. 
  • Despite training 13.7 million candidates under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) under Skill India, only 18% (approximately 2.4 million) have been successfully placed in jobs, highlighting a significant gap between skilling and employment outcomes. 
• Societal Preference for Secure Jobs: The traditional Indian aspiration is still largely focused on securing government or salaried jobs.  
  • Entrepreneurship is not yet culturally embedded as a desirable career choice, particularly in rural areas. 
  • Most youth and their families still aspire for stable government jobs or salaried employment, especially in rural areas. This cultural hesitation limits the pool of willing entrepreneurs despite policy incentives. 

What are the Key Government Initiatives Supporting the Entrepreneurship Ecosystem? 

• Startup India Initiative 
• Startup India Seed Fund Scheme (SISFS) 
• Atal Innovation Mission (AIM) 
• Fund of Funds for Startups (FFS) Scheme  
• Bharat Startup Knowledge Access Registry (BHASKAR) 
• Mentorship, Advisory, Assistance, Resilience and Growth (MAARG) Portal  
• SAMRIDH Scheme 

What Reforms are Needed to build a Robust Entrepreneurship Ecosystem Across India? 

• Institutionalising Entrepreneurship Through a National Mission: To systematically support job creation and promote local enterprise, a National Entrepreneurship Mission can be established as an umbrella mission for initiatives like Skill India and Atal Innovation Mission.  
  • This mission should have an operational presence in every district, linking it with the Aspirational District Programme (ADP). 
  • For example, the Global Alliance for Mass Entrepreneurship (GAME), in partnership with NITI Aayog, is piloting vibrant entrepreneurship ecosystems in Nagpur, Visakhapatnam, and selected districts of Uttar Pradesh. 
• Shifting Focus from Start-up India to ‘Entrepreneurship for Bharat’: India’s entrepreneurial growth must emerge from small towns, remote districts, and villages. 
  • These areas need targeted support in terms of digital infrastructure, financial services, and inclusion in platforms like the Open Network for Digital Commerce (ONDC) and UPI. 
    • The aim is to reduce migration to overburdened cities and build resilient, self-sustaining local economies. 
  • India’s Shark Tank model can be expanded into a “Shark Roots” initiative to highlight rural and grassroots innovations. 
    • By extending entrepreneurial storytelling and funding platforms beyond metro cities, it can unlock untapped talent, promote inclusive growth, and foster a truly bottom-up startup ecosystem. 
  • India can also draw inspiration from global models such as Indonesia’s Desa Brilian initiative— focuses on nurturing entrepreneurship at the village level, and Chile’s Start‑Up Chile program, which supports regional and social entrepreneurship beyond urban tech hubs. 
• Enabling Underserved Groups Through Targeted Skilling and Support: Special provisions are necessary for individuals at the bottom of the pyramid, such as persons with disabilities.  
  • Their training must extend beyond vocational skills to include financial literacy, pricing strategies, and market behavior. 
  • There’s a need for a dedicated "remote buddy or mentor system", especially in remote regions.  
    • AI-enabled skill development platforms, integrated with tools like BHASHINI, can act as a crucial bridge offering multilingual, accessible training content and personalized guidance at scale. 
• Promote Gender-Focused Skilling and Entrepreneurship: Expand schemes like Mahila Samman Savings Certificate, Pradhan Mantri Kaushal Vikas Yojana (PMKVY), and Skill India Mission with women-specific modules in digital literacy, marketing, and enterprise management. 
  • Strengthen the Start-up India for Women and Women Entrepreneurship Platform (WEP) to support early-stage women-led ventures through seed funding, mentoring, and networking. 
  • Entrepreneurs like Kiran Mazumdar-Shaw (Biocon) and Falguni Nayar (Nykaa) can be showcased as role models.  
    • Their stories can inspire women and boost entrepreneurship, with coordinated efforts enhancing their impact. 
• Mandatory Entrepreneurship Curriculum in Higher Education: Entrepreneurial mindsets must be nurtured systematically by integrating a structured entrepreneurship curriculum in colleges and universities.  
  • This includes practical modules on idea validation, financial literacy and digital enterprise management.  
    • Beyond formal education, campaigns should promote entrepreneurship as a respectable and viable career path especially in non-metro regions shifting the current cultural preference for salaried and government jobs.  
  • Initiatives like Jagriti Yatra (15-day long national train journey of aspiring/current entrepreneurs) can be customized by the government for entrepreneurs with limited financial means to maintain inclusivity. 
• Exit and Re-entry Reforms: To foster a risk-tolerant entrepreneurial ecosystem, India must simplify exit processes for failed startups and allow seamless re-entry for entrepreneurs.  
  • Reforms in insolvency laws, faster resolution mechanisms, and removing stigma around business failure will encourage more individuals to innovate without fear of long-term penal consequences. 
• Procurement Reform for Startups: The government can mandate that a fixed percentage of public procurement especially in sectors like health, education, and rural development be sourced from registered startups.  
  • Such preferential procurement policies would empower entrepreneurial spirit, provide reliable market access, and boost confidence among early-stage ventures, particularly those led by women, youth, and marginalized groups.

Conclusion 

To truly realise the vision of Viksit Bharat, India must move beyond skilling and job creation to building a culture of mass entrepreneurship. By empowering youth at the bottom of the pyramid and shifting focus from Start-up India to Entrepreneurship for Bharat, the country can transform its demographic dividend into inclusive and resilient economic growth. Afterall, unleashing ‘Entrepreneurial Jan Andolan’ is the next big leap for India’s growth story.

Drishti Mains Question

How can India transform its demographic dividend into inclusive growth through mass entrepreneurship? 

UPSC Civil Services Examination Previous Year Question (PYQ) 

Mains

Q. “While we flaunt India’s demographic dividend, we ignore the dropping rates of employability.” What are we missing while doing so? Where will the jobs that India desperately needs come from? Explain. (2014)

Q. “Demographic Dividend in India will remain only theoretical unless our manpower becomes more educated, aware, skilled and creative.” What measures have been taken by the government to enhance the capacity of our population to be more productive and employable? (2016)