Editorial Charter

For An Inclusive Startup India, The Unicorn Sun Must Also Rise In The East

Innovative startups from West Bengal, Odisha, Bihar, and Jharkhand, commanding billion-dollar valuations, can ensure that the economic gap that exists between the eastern region and other parts of the country does not widen further

Amidst all the discussions surrounding the potential of the startup economy, one aspect that hasn't received much attention in the Indian context, the regional variation in growth and spread of startups -- especially in relation to the eastern states of the country.

As per data provided by the Union Ministry of Commerce and Industry, the eastern region -- made up of West Bengal, Bihar, Odisha, and Jharkhand -- accounted for only 7 percent of the total number of recognized startups in India as of 2023.

In contrast, the North had 32 percent, the South 28 percent, and the West 26 percent of the total number of India’s 100,000 plus recognized startups.    

But it’s not just the political connotations – significant as they are – that alone make it important to discuss why the East continues to lack multiple, large, successful startups, and no unicorn to boast of till date.

The eastern region – which, in the words of Finance Minister Nirmala Sitharaman, would be enabled to become “a powerful driver of India’s growth” – already ticks several boxes regarding the prerequisites for spawning large, successful startups.

Supportive Ecosystem

Some of India’s most respected higher educational institutions are based there and the region, consequently, has no dearth of bright, young, highly qualified people with entrepreneurial ambitions. Moreover, by itself, the East offers a sizable market where startup founders can try out their innovative ideas.

As per the National Educational Ranking Framework (NIRF) 2023, two of the top 10 engineering colleges of India are in the eastern region -- IIT, Kharagpur and Kolkata-based Jadavpur University.

In the management discipline, the East has two of the nation’s top 10 management education providers in the form of IIM, Calcutta and XLRI-Xavier School of Management, Jamshedpur. Other prominent management institutes include the XIM University, Bhubaneswar and Indian Institute of Management, Sambalpur.

The Indian Institute of Technology, Kharagpur, also figures among the country’s top 10 research institutions. The Institute of Physics and the KIITs Univeristy in Bhubaneswar and BITS Mesra in Ranchi are among some of the country's best institutions for science and engineering.

Despite the enormous flight of capital it has witnessed since the 1960s, West Bengal is still India’s 6th biggest economy. The state continues to be the headquarters of enterprises like ITC, the RP-Sanjiv Goenka Group, among others.

Though a smaller economy than West Bengal, Odisha has already made a name for itself as one of the most business-friendly of states. Jharkhand has always been known for its mineral wealth and one of its cities Jamshedpur is synonymous with Tata Steel. Bihar, too, is taking great strides to attract investments.

In their own ways, the governments of the eastern states, too, have signalled their keen interest in doing whatever it needs to be done to have more startups come up in their respective areas.

So, what is it that is holding back the eastern region from making a bigger splash in the startup space? Is a historical perception about the East the problem here? Is inertia on the part of venture capitalists and private equity investors to not look beyond certain geographies a factor? Is it a combination of both? Or is it something else?

Whatever be the causes for the present scenario, it is time key stakeholders – governments at the Centre and of the eastern states, business leaders, startup founders, and the investor fraternity – start identifying these and find solutions for the problem areas.

Regional Disparity Doesn't Bode Well For Balanced Growth

A yawning gap building up between the East and other regions on the startup front can neither be good from the Sabka Vikas (development for all) perspective nor from the Viksit Bharat (developed India) standpoint.

After all, innovative unicorn startups coming up in West Bengal, Odisha, Bihar, and Jharkhand can add further vibrancy to India’s startup arena that is currently heavily fixated on the fintech, edtech, e-commerce, D2C brands, SaaS (software as a service) domains etc.

Such startups can also create more local jobs and thereby reduce the need for young people in the East to migrate elsewhere for employment opportunities. By extension, a booming startup ecosystem in the eastern region can speed up and, also, make India's growth and development process more inclusive.

For many decades now, the East has been perceived as more important politically than economically. It is high time that the region’s economic importance started matching its political one, and there could possibly be no better beginning for such an endeavour than the East no longer being a mere side show in India’s startup story.

The unicorn sun must also rise in the East. 

(The author is a current affairs commentator. Views expressed are personal.)    

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