Government Start-up Policies and Regional Entrepreneurial Development in India: An evidence from State-Level Ecosystem Outcomes

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DOI: https://doi.org/10.5281/zenodo.23945138

Yogesh Sharma and Somnath Pruthi (Department of Education, Guru Jambheshwar University of Science & Technology, Hisar, Haryana)

India’s start-up ecosystem has expanded rapidly under government-supported entrepreneurial policies; however, there is limited empirical evidence on the regional distribution and effectiveness of these interventions across states. The study focuses on the regional variations in the implementation and impact of key start-up support schemes in India over the last five years (2020-2025), such as the Start-up India Seed Fund Scheme (SISFS), Fund of Funds for Start-ups (FFS), Credit Guarantee Scheme for Start-ups (CGSS), and DPIIT-recognised start-up schemes. Based on state-level administrative data, the study employs fixed-effects panel regression, Data Envelopment Analysis (DEA), and concentration measures to investigate the relationship between government support, employment growth, and regional entrepreneurial efficiency. The results show a positive relationship between start-up employment generation and government-supported funding mechanisms, particularly SISFS. The top 5 states account for more than half of startups, funding, and employment. The findings of the sectoral analysis indicate that information technology and healthcare are the key sectors that are fuelling the growth of entrepreneurship and employment. The study contributes to the literature on the entrepreneurial ecosystem and regional development by clarifying how the effectiveness of public entrepreneurial policy in emerging economies is affected by uneven institutional capacity and ecosystem maturity. The results indicate that more inclusive and balanced entrepreneurial development between geographical areas could require more geographically differentiated policy approaches.