More than a third of people who obtained a director identification number (DIN) in the last fiscal year were aged 30 or younger, data from the Ministry of Corporate Affairs (MCA) showed. Anyone who wants to start a company or be part of a company’s board needs a DIN according to the rules.
The MCA had issued 420,000 DINs in fiscal year 2022, of which nearly 123,000 were under the age of 30, while another 182,000 were between the ages of 31 and 45, according to the data.
These numbers are increasing at a time when new business incorporations have gained momentum. As many as 167,000 companies were incorporated in India in the year ending March 31, 2022, bringing the total number of registered companies to 2.318 million.
Young graduates are seeing entrepreneurship as a viable alternative to a regular job, especially in tech circles, according to experts. India currently has more than 100 unicorns or startups valued at $1 billion or more. In addition, there are many small and medium-sized companies that are doing good business.
Easier funding opportunities, especially from private equity and venture capital firms, are acting as an incentive for young people to become entrepreneurs. In 2021, startups received $11 billion in funding. While there is currently a slowdown in fund inflows, Indian startups still raised $4.6 billion in the first five months of 2022, according to reports.
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“The higher percentage of younger directors is largely due to the rise of the Indian startup ecosystem and the growth of young entrepreneurs,” said Raja Lahiri, technology, media and entertainment leader at Grant Thornton Bharat. “This trend is expected to continue given the growing interest of young people in entrepreneurship, as well as the backing of private capital, venture capital investors and the government push for the start-up sector.”
This is the first time the MCA has provided a division of directors by age; therefore, a comparison with data from previous years was not possible.
Another key factor contributing to this increase is the central government’s push to make it easier to do business. According to experts, five years ago it was necessary to go through a significant compliance burden to incorporate a company. Even after incorporation, there were various regulatory requirements that companies had to meet in the normal course of business.
“These days, incorporating a new company has become quite easy,” said Shriram Subramanian, founder of InGovern Research, a proxy advisory firm. “Popular culture has also had its impact on young people, as some of the popular TV shows about startups have brought aspirational value to starting a new business,” he added.
Of the new directors under the age of 30, almost 20,000 (18% of the total) were from Maharashtra. This is mainly due to the presence of the financial services sector including markets and banking in Mumbai, making the state a more likely choice for fintech companies. Interestingly, Uttar Pradesh came in second with 13,000 new directors under the age of 30, beating the leading startup state Karnataka (5,905) and manufacturing hub Gujarat (7,051).
However, further analysis of the data shows that there is a significant gap between male and female directors. Of the new directors under the age of 30, 91,545 were men and only 31,048 women. In the 31-45 age group, 124,000 directors were men, while the number of women was less than half at 58,420. This trend is mostly in line with the overall figures: only 30% of new directors registered in FY22 were women.