UPSC Prelims Practice Questions — Government recognizes more than 55,200 startups during FY 2025-26, highest ever in a single year since launch of Startup India initiative

Q1. The 'Startup India Action Plan' launched in January 2016 is best described as which one of the following?

  • A. A blueprint of 19 action points across simplification, funding support and incubation to build a startup ecosystem
  • B. A statutory fund with a ₹10,000 crore corpus set up to invest in startups
  • C. A section of the Income-tax Act granting a profit-linked tax holiday to startups
  • D. A framework providing credit guarantee cover for loans extended to startups

Q2. The Fund of Funds for Startups (FFS) and the newly notified FFS 2.0 are operationalised as the implementation agency by which one of the following?

  • A. Small Industries Development Bank of India (SIDBI)
  • B. Securities and Exchange Board of India (SEBI)
  • C. National Bank for Agriculture and Rural Development (NABARD)
  • D. National Investment and Infrastructure Fund (NIIF)

Q3. Which one of the following best describes the operating structure of the Fund of Funds for Startups (FFS)?

  • A. It does not invest directly in startups but contributes to SEBI-registered Alternative Investment Funds (AIFs), which in turn invest in startups
  • B. It directly provides equity capital only to every DPIIT-recognised startup
  • C. It provides guarantee cover to banks against defaults on loans given to startups
  • D. It disburses seed grants to startups exclusively through incubators

Q4. Under Section 80-IAC of the Income-tax Act, an eligible startup may claim a 100% deduction of profits for how many consecutive assessment years (within the first ten years of its incorporation)?

  • A. Three
  • B. Five
  • C. Seven
  • D. Ten

Q5. Under the Startup India Seed Fund Scheme (SISFS), financial assistance reaches startups primarily through which one of the following channels?

  • A. Eligible incubators selected by an Experts Advisory Committee
  • B. SEBI-registered Alternative Investment Funds
  • C. SIDBI acting as the sole implementation agency
  • D. Scheduled commercial banks operating under a credit guarantee cover

Q6. The Startup India Seed Fund Scheme (SISFS), with a corpus of ₹945 crore, was launched and implemented with effect from which year?

  • A. 2021
  • B. 2016
  • C. 2019
  • D. 2022

Q7. The Credit Guarantee Scheme for Startups (CGSS), notified in 2022, is best described as a scheme that:

  • A. provides guarantee cover to eligible lenders against defaults on collateral-free loans extended to DPIIT-recognised startups
  • B. directly disburses collateral-free loans to startups from a government corpus
  • C. provides equity capital to startups through Alternative Investment Funds
  • D. offers seed grants to startups through approved incubators

Q8. In the April 2026 announcement on Startup India, the figure of 'more than 55,200' refers to which one of the following?

  • A. The number of startups newly recognised by DPIIT during FY 2025-26
  • B. The cumulative number of startups recognised since the launch in 2016
  • C. The number of startups that have received Fund of Funds investment
  • D. The number of direct jobs, in thousands, created during FY 2025-26

Q9. For a standard (non-deep-tech) entity, up to how long after its date of incorporation can it remain eligible for recognition as a 'startup' by DPIIT?

  • A. Up to 10 years
  • B. Up to 7 years
  • C. Up to 5 years
  • D. Up to 20 years