The agriculture sector recorded the highest 103 per cent growth in new business registrations at 12,368 in FY2021, compared to 6,107 in the previous fiscal, according to a paper released by Dun & Bradstreet on Wednesday.
The white paper on 'Business Dynamism in India' showed that the manufacturing sector witnessed 39,539 registrations in FY21 compared to 26,406 in FY20, a growth of 50 per cent.
In FY21, a total of 1,95,880 businesses were registered, which is a record high, it said.
"While the agriculture sector observed 12,368 registrations in FY21 compared to 6,107 in FY20, the services sector also fared well with the highest number of registrations at 83,079 in FY21 and witnessed a growth rate of 14 per cent," the paper showed.
The birth rate of new businesses showed a healthy pace of growth from 7.8 per cent in FY16 to 10.2 per cent in FY20 and further to 11.6 per cent in FY21, despite the pandemic and subsequent waves of lockdown.
The paper showed that subsectors such as agriculture production (crops), food and kindred products manufacturing, wholesale of non-durable goods, chemicals manufacturing, social services, educational services, and computer-related services gained significant new registrations.
Sub-sectors such as wholesale trade of durable goods, transportation services, repair services, restaurants, bars, etc. witnessed a significant contraction in business registrations during the year.
The share of businesses being registered outside mainstream locations such as Mumbai, New Delhi, Bengaluru, and Chennai is increasing.
The top 10 cities accounted only for 42 per cent of new business registrations in FY21 compared to 55 per cent in FY17.
"While the pandemic changed the business landscape dramatically, it presented itself as an opportunity, and many businesses capitalised on the evolving trends, leading to an increase in business registrations. About 1,95,880 businesses were registered in FY21, a record high," Dun & Bradstreet Managing Director & CEO (India) Avinash Gupta said.
Most of the newly registered businesses are concentrated in sectors that witnessed a pandemic-induced spike in demand and 96 per cent of the newly registered business had a paid-up capital of up to Rs 10 lakh, he said.
However, Dun & Bradstreet's research reveals that the historical survival rates of businesses that fall in this category are low, Gupta added.
"Hence, businesses that partner with such ventures need to continuously monitor their portfolio and establish red flag alerts to protect their capital," he said.
The firm's Global Chief Economist Arun Singh said the pandemic has significantly altered how businesses conduct commerce.
As a result, companies in India are becoming more dynamic, and competitive, but the impact is varied.
Some sectors such as manufacturing of food and kindred products, computer-related services, educational services, etc. have witnessed a healthy growth in business registrations, Singh added.
