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‘Startups will play key role in India becoming 3rd largest economy’, says chief economic advisor Nageswaran

Nov 19, 2023 06:21 PM IST

Chief economic advisor V Anantha Nageswaran said that India was in course to become the third largest economy in a few years.

Chief economic advisor (CEA) V Anantha Nageswaran on Sunday said startups will play a key role in helping India become the third largest economy in the world. He said that India's tier 2 and tier 3 cities including Thiruvananthapuram have turned out to be game changers in helping startups flourish in India, PTI reported.

During his Leadership Talk at the Huddle Global 2023, Nageswaran said that India was in course to become the third largest economy in a few years. He said that a $7 trillion economy by 2030 is possible if the country maintains its present growth trajectory and the startup entrepreneurs will play an important role.

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Chief economic advisor V Anantha Nageswaran(PTI file)
Chief economic advisor V Anantha Nageswaran(PTI file)

According to the CEA, an active participation of the startups in developing the business models on the foundation of expanding physical and digital infrastructure will continue to generate revenue, efficiency and economic returns.

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Nageswaran said the last decade witnessed an exceptional transformation in the startup landscape in India. There are over 1.12 lakh startups presently recognised by the Department for Promotion of Industry and Internal Trade (DPIIT) across 763 districts. Out of these, more than 110 happen to be unicorns with a total valuation of around $350 billion.

He added that innovation in India was not limited to certain sectors. The startups are solving problems in 56 industrial sectors, 13 per cent of them from IT services, nine per cent from health sector, seven per cent from education, five per cent from agriculture and five per cent from food and beverages.

‘49% of startups from tier 2, 3 cities’

The CEA said it was significant that 49 per cent of the startups were from tier-2 and 3 cities which have turned to be game-changers as the business advantages in these locations enable entrepreneurs to operate at lower costs as compared to tier-1 cities.

"Apart from improved infrastructure and the government’s pro-active policies, the availability of a technically skilled talent pool is a huge advantage for startups to set up and flourish in tier-2 and tier-3 cities," Nageswaran added.

The CEA said that historically there was a perception that small towns were difficult places to conduct business. But due to improved internet penetration, better physical infrastructure, road, rail and air connectivity and supportive government policies, this is no longer true, he added.

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