India records 37% jump in new firms entering business

New Delhi: The registration of new companies jumped by 37 per cent to 24,136 in February this year compared to the same month of the previous year, reflecting the strong business sentiment and increasing formalisation of the Indian economy driven by the government's digital push.

The registrations also shot up on a sequential basis from 23,280 in January before accelerating further in February.

The new registrations of companies were dominated by the services sector, particularly IT services, consultancies and professional services. Nearly 300 AI-related businesses are set up on average every month. In February, 248 AI-focused companies were formed, which reflects the growth of the startup ecosystem in the country.

The majority of new businesses are closely held, private limited companies. The average paid-up capital of companies formed in January, for example, stood at Rs 600,000, suggesting that entrepreneurship is being driven by small businesses.

The authorised capital or the maximum capital new businesses are allowed to raise remains two to three times the paid-up capital, which is indicative of the future investment potential.