You will need to have a few btc to start a faucet. Probably at least 1.
Google AdSense usually works, but there are also many ad networks that pay with bitcoin.
Your can also sell ad space to people who want to advertise their own referrals.
Is one btc besides hosting and domain charges or it is included?
I'd recommend analysing demand for what you're trying to offer first. Do people really want another faucet?
I understand you want to make money out of this and that you don't really care what people want, but you might get 0 traffic. I feel like there's more than enough faucets and no desire for more. Feel free to prove me wrong.
As for your question, I don't think 1BTC is enough. I have seen very active faucets run with 10+ BTC.
Yes you are right that there are numerous faucets but I particularly want to focus on Indian market. I want it exclusively for indian users in regional language.
I am asking for initial budget required,as the faucet grows,more budget can be invested
