2023 POLICY ROADMAP

The Indian economy has been growing strongly. Real GDP is expected to have expanded by just under 8% in 2023. India reached a historic milestone when its GDP surpassed $4 trillion in November 2023. The 2023 inflation rate was expected to be around 5%, slightly above the Bank of India target rate.

The government announced in 2023 the establishment of 30 Skill India Centres, providing training in skills such as coding, artificial intelligence and robotics. Meanwhile, the rollout of the Startup India Seed Fund Scheme continues, with over 1,000 startups benefiting since the scheme was launched in 2021.

2023 Framework Conditions Review1

The entrepreneurial environment in India continues to go from strength to strength. The National Entrepreneurial Context Index (NECI) score, based on responses from national experts, was 6.6 in 2023. This marks a full recovery from the depths of the pandemic, with that same environment having been scored at 5.0 in 2021.

In 2022, all of India’s 13 Entrepreneurial Framework Conditions (EFCs) were assessed as more than sufficient (score ≥5.0). By 2023, 10 of those 13 scores had improved, with the lowest assessment being for Government Policy: Taxes and Bureaucracy (6.2). All of the other 12 EFCs scored higher than this, all the way up to a score of 7.8 for India’s Social and Cultural Norms in support of entrepreneurship. These EFC scores are a substantial achievement, particularly for a Level C economy, and make India one of only three GEM economies in 2023 in which all EFCs were assessed as more than sufficient (alongside the Netherlands and the United Arab Emirates). So India is, among these 49 GEM economies, one of the best places in the world to start a business.

National experts were also asked to assess India’s social support for women entrepreneurship, and how women entrepreneurs’ access to resources compares to that of men. India scored well on both counts,
with its score of 6.6 for support and 6.7 for access to resources, ranking India second and third respectively of the 49 GEM economies.

2023 Entrepreneurial Activity Review

Despite the economic growth noted earlier, one in two adults in India reported that their household income had fallen in 2023. A year earlier, this number was three out of four adults.

Not surprisingly, given the supportive entrepreneurial environment, enterprise has a high profile in India, with more than one in two adults knowing someone who had recently started a new business, while more than four out of five adults considered themselves to have the skills and experience to start their own enterprise (third highest in GEM), or saw good opportunities to start a business locally (second highest in GEM). However, more than three in five of those seeing good opportunities would not start a business for fear it might fail, the third highest proportion in GEM 2023, behind China and Saudi Arabia. One in five adults in India expected to start their own business in the next three years.

India’s level of Total early-stage Entrepreneurial Activity (TEA) in 2023 was just under 12%, up slightly from 2022 and more than twice the level at the depths of the pandemic. Men were more likely to start a new business (male TEA = 14.6%) than women (9.3%), and India had a relatively high level of Established Business Ownership at 12.4%. So there was roughly one new business for every established one.

Making a difference in the world was the most popular motivation among new entrepreneurs, agreed by more than four out of five. Three out of four also agreed they had started a business to continue a family tradition. Very few new entrepreneurs had customers beyond India, perhaps not too surprising given the scale and growth of national markets, and two in five expected to use more digital technology in the next six months. Finally, job expectations were fairly low among India’s new entrepreneurs, with less than one in 10 expecting to employ at least six more people over the next five years.

1 A brief description of the GEM approach is given in the footnote on p. 107.