Congress head Kharge hits out at government for using Startup India as publicity tool for PM

Congress president and leader of Opposition in the Rajya Sabha Mallikarjun Kharge hit out at the Narendra Modi-led BJP government for pushing the country's startup entrepreneurs, creative people and jobless youth “to the wall.”

On the eve of National Startups Day, Kharge took to social media platform X and said the government’s Startup India initiative has become a vehicle to garner publicity for Prime Minister Modi as it has miserably fallen short on delivery.

“BJP promised Rs 20,000 Cr for Startup Seed Fund in its 2019 Manifesto. What happened to that?” Kharge questioned.



Citing a Rajya Sabha unstarred question from August 4 last year, he said the government has approved a pittance of Rs 525.27 crore for the fund, and that too only from the four-year period starting 2021-22.

The commerce and industry ministry in a note last year said the Startup India Seed Fund Scheme (SISFS) was approved with a corpus of Rs 945 crore for four years starting from 2021-22.

“Under SISFS, as per provisions of the scheme, the government has constituted an Experts Advisory Committee (EAC) which is responsible for the overall execution and monitoring of the SISFS. The EAC evaluates and selects incubators for allocation of funds under the scheme,” the note read.

Further, under the scheme, Rs 477.25 crore was approved to 133 incubators, of which Rs 211.63 crore was disbursed as of December 31, 2022, minister of state for commerce and industry Som Parkash said in his reply to a parliament question on February 3.

Citing a media report, Kharge remarked, “Is it true that 100,000 people have lost jobs in startups in the last two years alone? We are not even counting the Covid-19 lockdown's impact on them. No wonder the funding of startups is now the lowest in 5 years!”

ET reported in December that new-economy companies laid off more than 28,000 employees in the first three quarters of 2023, as startups went ahead with major restructuring to conserve cash and prioritise verticals essential for continued operations, amid a persistent funding winter.

According to data from Longhouse Consulting shared exclusively with ET, startups were the worst hit in 2023 since the peaks of aggressive hiring from 2021. These companies fired more than 20,000 in 2022, and 4,080 in 2021.

Kharge also questioned the Modi government on why it had not provided tax benefits to 97.5% of recognized startups.

“A meagre 2,975 recognised startups have been provided any kind of tax holiday by the GOI, despite promising it, in virtually every Budget,” he added.