State Planning Commission report on startups calls for simplifying funding processes

A State Planning Commission report titled ‘Start-Up Ecosystem in T.N.: Opportunities and Challenges’ has recommended enhancing accessibility and simplifying processes for schemes and funding, and for improving market access, with a focus on public procurement. It said that a simplified application process for State government funding would further increase the number of people applying for these schemes.

It also called for strengthening the talent ecosystem and support systems, reinforcing social and spatial inclusion, and leveraging best practices. It suggested integrating sustainability and accommodating failures, and streamlining and simplifying regulatory processes and compliance. The report was submitted to Chief Minister M.K. Stalin by SPC ex-officio vice-chairperson Udhayanidhi Stalin and SPC executive vice-chairperson J. Jeyaranjan in Chennai on Tuesday (October 14, 2025).

“Academic incubators, government funding and public procurement have been instrumental in driving success across Tamil Nadu’s startup landscape, particularly for non-IT ventures. However, as with any evolving ecosystem, challenges persist,” Mr. Jeyaranjan said in his foreword in the report.

“Access to funding remains a critical need, especially for manufacturing startups where infrastructure availability is equally vital. Talent acquisition and retention continue to pose hurdles, and the regulatory environment has to be further simplified to boost operational efficiency,” he said. To ensure effective execution of startup policies and ecosystem initiatives, learning from best practices in other States would be essential, he said.

Tamil Nadu’s policies that encourage entrepreneurship comprehensively address most areas identified as critical for startup support, such as identifying and nurturing entrepreneurs, funding, among others. “The onus is on startups to take full advantage of the various schemes and initiatives of the government,” it said.

To address the issue of funding, the government has created various funding schemes such as the TANSEED, to kickstart private capital flow to startups, it pointed out. “The government has encouraged public procurement from startups. However, available trends indicate low registration and participation rates due to a lack of awareness, perceived lengthy processes, and stringent eligibility criteria.”