Nurturing Startups: Startup India
Nurturing Startups: Startup India
Hindustan mein koi aisa zila na ho, aisa block na ho jaha koi startup na shuru ho. (There should not be any district, any block in India where there is no startup).‘Start up India, Stand up India’ – Shri Narendra Modi ,Prime Minister of India
16th January, 2016 vouched the advent of Startup India, the flagship initiative of the Government of India. This initiative aims at fostering entrepreneurship and promoting innovation by creating an ecosystem that is conducive for growth of Start-ups to make India a nation of job creators instead of being a nation of job seekers. This initiative will go a significant way in reiterating Government of India’s commitment to making India the hub of innovation, design and Start-ups for a sustainable economic growth and generate large scale employment opportunities. The action plan of Government of India for Startup India addresses all aspects of the Startup ecosystem. With this Action Plan the Government hopes to accelerate spreading of the Startup movement from digital/ technology sector to a wide array of sectors including agriculture, manufacturing, social sector, healthcare, education, etc. From existing tier 1 cities to tier 2 and tier 3 cities including semi-urban and rural areas.
Startup India’s striking features are:
- Simplification and Handholding
- Funding Support and Incentives
- Industry-Academia Partnership and Incubation
Startup India’s 19-Point Action Plan
- Self-certification Compliance
- Single Point of Contact via Startup India Hub
- Simplifying Processes with Mobile App and Portal(for registration, filing compliances & obtaining information)
- Legal Support, Fast Tracking & 80% reduction in patent registration fee
- Relaxed Norms of Public Procurement
- Easier & Faster Exit
- Funding Support via a Fund of Funds corpus of INR 10,000 crore
- Credit Guarantee Funding
- Tax Exemption on Capital gains
- 3-Year Income Tax Exemption
- Tax Exemption on Investments above Fair Market Value (FMV)
- Annual Startup Fests (national & international)
- Launch of World-class Innovation Hubs under Atal Innovation Mission (AIM)
- Set up of country-wide Incubator Network
- Innovation Centres to augment Incubation and R&D
- Research Parks to propel innovation
- Promote Entrepreneurship in Biotechnology
- Innovation Focused Programs for Students
- Annual Incubator Grand Challenge
CPCB has exempted industries in “white” category from all the applicable self-certifications under the 3 environment related Acts (The water (Prevention & Control of Pollution) Act, 1974; The Water (Prevention & Control of Pollution) Cess (Amendment) Act, 2003 and The Air (Prevention & Control of Pollution) Act, 1981) listed in the Startup India Action Plan.
Start-up India hub
A platform to exchange knowledge and access financial aid has been incorporated to resolve queries and provide handholding support to Startups.
Mobile App and Portal
To remove the clutter and cater accessibility for registering Start-ups, tracking status of registration, filing for compliances, collaborating with various Start-up ecosystem partners like VCs, incubators, etc. and for applying for various schemes under the Action Plan, an online platform has been provided.
Start-up India Intellectual Property Protection (“SIPP”) Scheme
The SIPP provides fast-tracking of Start-up patent applications, panel of facilitators to assist in filing of IP applications, the government bears the cost of such facilitation and 80% rebate on filing of patents.
Breezy procurement and exits
Start-ups in the manufacturing sector are exempted from the criteria of “prior experience/ turnover”, whenever a tender is floated by a government entity or a PSU, without any relaxation in quality standards or technical parameters. In light of the Insolvency and Bankruptcy Code, 2016, the Start-ups can now be wound up within a period of 90 days from making of an application for winding up on a fast track basis.
Fund of Funds
A ‘fund of funds’ of INR 10,000 crores for Start-ups has been established which is managed by Small Industries Development Bank of India. The fund invests in SEBI registered Alternative Investment Funds which, in turn, invest in Start-ups. The Fund of Funds can contribute to a maximum of 50% of the stated daughter fund size. In order to be able to receive the contribution, the daughter fund should have already raised the balance 50% or more of the stated fund size as the case maybe.
Three years income tax exemption for the start-ups
Launch of Atal Innovation Mission (“AIM”) with Self-Employment and Talent Utilization Program (“SETU”)
Established under NITI, this mission will be a platform for the establishment of sector specific Incubators including in PPP mode, establishment of 500 Tinkering Labs, providing pre-incubation training, seed-funding of start-ups, institution of innovation awards, launch of Grand Innovation Challenge Award to motivate start-ups. A sum of Rs.150 crore have been embarked already.
Harnessing Incubator Set-up
Government is encouraging already established incubation centres and is longing to scale up 31 more at The eligibility for the same is set out in the Guidelines for Scale-up support to Established Incubation Centres under Atal Innovation Mission issued by the government.
RBI proposed Regulatory Relaxations
Like enabling Start-up enterprises, irrespective of the sector in which they are engaged, to receive foreign venture capital investment and also explicitly enabling transfer of shares from Foreign Venture Capital Investors to other residents or non-residents. (Know more)
An Indian Start-up, having an overseas subsidiary, may open a foreign currency account with a bank outside India for the purpose of crediting to the account the foreign exchange earnings out of exports/sales made by the said Start-up or its overseas subsidiary. The balances held in such accounts, to the extent they represent exports from India, shall be repatriated to India within the period prescribed for realization of exports. In addition, payments received in foreign exchange by an Indian Start up arising out of sales/ export made by the Start-up or its overseas subsidiaries will be a permissible credit to the Exchange Earners Foreign Currency (EEFC) account maintained in India by the start up (notification).