Addressing the challenges faced by the startup ecosystem could strengthen the state’s position as a leader in innovation and entrepreneurship.
Published Mar 13, 2025 | 9:23 PM ⚊ Updated Mar 13, 2025 | 9:23 PM
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Synopsis: Entrepreneurs have high expectations in the Budget for further improvements in infrastructure, incubation support, networking, and financial assistance.
Tamil Nadu has emerged as one of India’s leading hubs for startups. The state government has been actively promoting startups through its flagship initiative, StartupTN, which offers guidance, funding support, and networking opportunities.
As the Tamil Nadu Budget 2025 is set to be tabled on Friday, 14 March, entrepreneurs have high expectations for further improvements in infrastructure, incubation support, networking, and financial assistance.
Need for stronger infrastructure.
Infrastructure is crucial for startups, especially in IT and manufacturing. IT startups require reliable cloud services, which can be costly when relying on private providers.
Sundar Devaprakash, Founder of APSI Technologies Private Limited, highlighted this issue. “Most IT startups rely on private cloud services, which can be costly and restrictive. If the government invests in a state-run digital infrastructure, providing affordable cloud computing and networking solutions, it would help startups reduce operational costs and scale more efficiently.”
While Tamil Nadu has invested in IT parks, Chennai has only one major hub, primarily occupied by large companies. Establishing additional IT parks in the suburbs would help smaller startups find affordable office spaces and essential resources, Devaprakash said.
The Tamil Nadu government, in its 2024 Budget, announced the establishment of new TIDEL Parks in Madurai and Trichy, along with Neo TIDEL Parks in Thanjavur, Salem, Vellore, Tiruppur, and Thoothukudi. These initiatives aim to strengthen the state’s digital infrastructure, boost IT sector growth, and create around 13,000 job opportunities.
Bridging the gap for rural entrepreneurs
Many rural entrepreneurs have strong business ideas but lack the knowledge to draft project reports, prepare proposals, or access funding schemes. A structured mentorship programme under StartupTN could provide step-by-step assistance to help them navigate these challenges.
Anu, an entrepreneur in the health sector, stressed on the need for such assistance. “If a rural entrepreneur wants to start a business, they might have a great idea, but they don’t know how to prepare project reports or proposals. Someone has to guide them through the entire process. More intensive guidance is needed on which government schemes they can avail based on their project, performance, and industry sector.”
“Women entrepreneurs need a dedicated networking community to connect, share ideas, and expand their ventures. Establishing exclusive incubation centers and mentorship programmes would provide better growth opportunities,” she added.
Need for advanced skill training
Both Sundar and Anu emphasised that while StartupTN currently provides basic-level skill training, there is a need for more advanced programs, including:
Introducing specialised training would enhance the entrepreneurial landscape and help startups compete at a global level.
Financial assistance and licensing reforms
Devaprakash also highlighted that startups involved in research and development often struggle to meet grant eligibility criteria. Creating dedicated IT and innovation zones with subsidised power, internet, and infrastructure would help startups grow efficiently.
Additionally, trade licensing fees remain a burden, particularly in smaller municipal corporations, where rates are sometimes higher than in Chennai. For instance, his firm has been paying ₹50,000 in Tambaram, whereas a company of the same size pays less than ₹10,000 in Chennai. A tiered fee structure, based on company size and turnover, would make compliance more affordable for startups.
Expectations from Budget 2025
With the upcoming budget, entrepreneurs are seeking:
Tamil Nadu’s startup ecosystem has significant potential. Addressing these challenges in the upcoming budget could strengthen the state’s position as a leader in innovation and entrepreneurship.
(Edited by Majnu Babu).
