Startups for Economic Development in India: Challenges and Strategies for Middle-Income Trap
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The concept of the middle-income trap (MIT) suggests that economies in the middle-income range face difficulty in progressing to the high-income stage over a prolonged period. Escaping the MIT has been a significant topic, particularly in South Asia. The key solution to this economic challenge lies in enhancing the ease of doing business (EDB), primarily by promoting startups. India has witnessed substantial growth in promoting startups since 2010. Despite favorable conditions for economic advancement, India has remained in the lower-middle income bracket for more than 15 years since 2007. Existing research has inadequately explored the specific obstacles and disadvantages hindering the ease of conducting business activities, especially for startups, particularly in India. Employing qualitative analysis, a strategic framework has been outlined to address the MIT through the promotion of startups in India. This framework integrates the domains of economic development and business growth facilitated by startups promotion. Sustained support for revising development policies to accelerate startup growth is instrumental in steering India away from the MIT. Notably, a noteworthy transformation of society stems from consistent efforts in enhancing policies that encourage startups to overcome the MIT challenge in India. Importantly, a significant aspect involves the Indian government's focus on investing in infrastructure and human capital through education, serving as foundational prerequisites to cultivate a more favorable business environment.
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