Page 9 - newsletter 14 aug

Due to the shut down, lot of people have now
Impact of COVID-19 on become unemployed. Even there is need for rapid

Start-ups of India technology upgradation which has added to the burden
of small enterprises.
At least 65% of start-ups are facing “significant
Mannat, XII E
“Start-ups are the result of young and creative minds and negative impact” on funding due to COVID-19 crisis,
India is full of start-ups but this ongoing pandemic has with most early-stage start-ups facing a major funding
also led an impact on start-ups”.A start-up is a company crunch. So start-up is facing a very tough time in this
or project initiated by an entrepreneur to seek pandemic.
effectively develop and validate a scalable business Some tech services and start-up industry body has
model. Now more and more individuals are interested in sought immediate relief from the government to ensure
becoming entrepreneurs and therefore open their own business continuity for start-ups amid the nationwide
business. lockdown.
In India there are more 1,300 start-ups added in Nasscom had requested the government to support the
2019,over 8,900 tech-start-ups in India now. Day-to-day, technology product start-ups with a slew of majors
these new start-ups are increasing in India. At the end of ranging from extension of tax payment deadline to
2019,Novel Corona Virus has started spreading and it is temporary refund of GST collected as loan. The
now moving freely in the world. To prevent the spread of industry body has also requested the government
COVID-19, only lockdown is the solution. So India as well institutions and PSUs to be encouraged to procure
as other countries imposed lockdown. In India, strict make-in-India software products thereby helping these
lockdown was imposed for 65 days which had a great start-ups meet at least 40% of the procurement need.
impact on economy of India. All sectors are facing a hard Even in the relief fund introduced by Finance Minister
hit by this ongoing pandemic. Ms. Nirmala Sitaraman gave few funds to start-ups too
India’s start-up sector is also not spared in this situation. to sustain in this time of crisis.
India’s start-up sector is bleeding due to business The situation is distressing but can be overcome by the
disruptions caused by COVID-19 pandemic, with 9 in measures like same start-ups are facing a hard time
10 start-ups registering a decline in revenues. The but soon it will overcome and bloom.
worst hit segments are early and mid-stage business.
Around 60% of all B2C start-ups were facing closure
because of two months nationwide lockdown that has so
far kept businesses shut. In 2019 it is recorded that start-
ups in India has generated 60,000 direct and 1.3-1.8 lakh
indirect employment.
2019 saw setting up of 65,312 micro enterprises that
created 5,22,496 jobs. But due to the outbreak of this
pandemic small enterprises are on the verge of closing
down. Many start-ups have been forced to undertake
severe cost-cutting measures, such as laying off
staff, slashing salaries and ceasing all expansion
plans and projects, in a bid to preserve cash and have a
longer runway in an uncertain operating environment.
According to Nasscom Survey, which showed that 70% of
start-ups have less than three months of cash runway. It
is also seen that 40% of start-ups have either
temporarily shut down operations or are on the verge
of shutting down. According to the survey, around 60%
of B2C start-ups face closure as revenues plummeted to
near-zero levels after businesses were forced to remain
shut during the nationwide lockdown aimed at curbing the
spread of the virus.