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General Studies 2026 GS Paper III 15 marks 250 words How

GS Paper III — Q12

How are startups in India promoting entrepreneurship, innovation and employment? Discuss the global and domestic challenges in…

How are startups in India promoting entrepreneurship, innovation and employment? Discuss the global and domestic challenges in their working and suggest suitable measures to overcome these challenges. (Answer in 250 words) 15 marks

हिंदी में प्रश्न पढ़ें

भारत में नवोन्मेषी उद्यम (स्टार्टअप्स) किस प्रकार उद्यमिता, नवाचार तथा रोजगार को प्रोत्साहित कर रहे हैं? उनकी कार्यप्रणाली में वैश्विक तथा घरेलू चुनौतियों की विवेचना कीजिए तथा उन चुनौतियों को पराजित करने हेतु उपयुक्त सुझाव दीजिए। (उत्तर 250 शब्दों में दीजिए)

Q12 of the 2026 UPSC Mains General Studies GS Paper III, as printed
The question as printed in the 2026 General Studies paper
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Model answer

Drafted with AI by UPSC Answer Check against this question's marking rubric, to the 250-word length. UPSC does not publish answers for Mains — this is one way to score well, not an official key. How we build rubrics and answers.

Promoting Entrepreneurship, Innovation and Employment

  • Entrepreneurship: DPIIT's Startup India recognition, the three-year tax holiday under Section 80-IAC of the Income-tax Act, 1961 (continued under the Income-tax Act, 2025, in force from 1 April 2026), the Fund of Funds for Startups and the Seed Fund Scheme have formalised risk-taking; recognised startups exceeded 2.35 lakh by March 2026, nearly half from tier-2 and tier-3 cities.
  • Innovation: UPI-based fintech, private space launches (Skyroot) and agritech show startups solving local problems with new technology.
  • Employment: Recognised startups reported over 23 lakh direct jobs by March 2026, besides indirect work in logistics and platform services.

Global and Domestic Challenges

Globally, startups face volatile venture capital (the 2022–24 "funding winter"), high interest rates that compressed valuations and delayed IPOs, rising protectionism, data-localisation rules abroad and competition from global Big Tech.

Domestically, they face a heavy compliance burden across many regulators, skill mismatches, limited access to public procurement despite GeM relaxations, and governance lapses at some high-profile firms that have eroded investor trust.

Way Forward

  • Simplify compliance through single-window portals and self-certification.
  • Expand collateral-free credit under the Credit Guarantee Scheme for Startups to reduce reliance on equity.
  • Build on the angel-tax abolition (Budget 2024–25) by rationalising capital gains tax, and deploy the ₹10,000 crore new Fund of Funds (Budget 2025–26) and the ₹1 lakh crore Research, Development and Innovation scheme for deep-tech.
  • Ease procurement norms and align curricula with industry needs.

These steps can turn India's startup scale into durable, innovation-led growth.

How this answer will be evaluated

Framework: Situation > Analysis > Measures: legal, institutional, developmental > Assessment

What earns full marks: Comprehensive analysis with specific examples, clear structure, and implementable measures.

Evaluation rubric

Each sub-part is marked on its own, against the marks and word limit printed on the paper.

  1. The answer Explain how startups promote entrepreneurship, innovation and employment in India; discuss the global and domestic challenges they face; and suggest suitable measures to overcome them. 15 marks · 250 words

    discuss— intro → 3-4 dimensions → example → balanced close

    Must cover

    • How startups promote entrepreneurship, innovation and employment, each addressed
    • Global challenges (e.g., funding volatility, protectionism, Big Tech competition)
    • Domestic challenges (e.g., compliance burden, skills, procurement access, governance)
    • Suitable measures mapped to the challenges

    Loses marks

    • Vague generalities without specific examples
    • Ignoring either global or domestic challenges
    • Measures that are aspirational rather than implementable

    Earns more

    • Specific examples of Indian startups or sectors
    • Reference to government schemes (Startup India, FFS, SISFS, CGSS, 80-IAC)
    • Balanced view of opportunities and risks
    • Clear structure with distinct sections

    Extra mark

    • Specific data on startup numbers or jobs (e.g., over 2.35 lakh recognised startups, 23 lakh+ direct jobs by March 2026)
    • Reference to recent measures (angel tax abolition, new ₹10,000 crore Fund of Funds, RDI scheme)
What "How" is asking you to do

Set out the route by which the outcome comes about, step by step. Many how stems ask how one thing affects another, and there the channel of transmission is precisely what is being marked.

Structure that answers it

Starting condition → step → step → outcome reached → the conditions the route depends on

Where marks are lost

Answering why it happens instead of how, the commonest single misread in the paper. An answer full of causes and significance that never traces the mechanism has answered a different question.

All UPSC directive words, compared →

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