Understanding the importance of entrepreneurship and its impact on the economic growth of the nation, Startup India came into the picture. Startup India, the flagship plan of government of India is an initiative to make optimal utilization of country's resources for the country's benefit. The evolution of this revolutionary movement is all set to transmogrify the nation's economic stature on the global platform.
The plan is huge and so are features related to it, here is a snapshot of the key features of government of India's Startup India campaign:
- Free from series of compliance policies
- Creation of SPOC
- Simplifying the process
- Legal Support and Parenting
- Startups can now apply for tenders floated by PSUs
- Easy exit policy
- Funding
- Credit Guarantee Fund
- Leverage in taxation on Capital gains
- Tax Exemption to Startups
- Tax Exemption on Investments above Fair Market Value
- Startup fest
- Rolling out Atal Innovation Mission with Self-Employment and Talent Utilization (SETU) Program
- Promotion of the idea of self- employment or entrepreneurship - this will mentor and guide the startups to become entrepreneurs
- Promoting innovation- this will provide a platform to people to innovate and come up with new ideas.
- Setting up of business incubators supported by Government funds
- Building Innovation Centres at National Institutes
- Setting up Research Parks
- Encouraging Startups in the Biotechnology Sector
- Innovation Focused Programs for Students
- Innovation Core
- NIDHI (National Initiative for Developing and Harnessing Innovations)
- UchhattarAvishkarYojana
- The programs will reward the winning idea with an amount falling in the range of Rs.5 lakh to Rs.10 lakh.
- Annual Incubator Grand Challenge
The only focus of any business should be doing business, increasing productivity and earning profits. In order to sustain this thought, the StartUp India allows you to start a business with fewer compliance policies. A total of 9 labor and environmental laws will be applicable on startups and the inspection regarding the compliance of labor law will be scrutinized after 3 years. Moreover, the compliance regime will be solely based on self-certification which can be availed via a mobile app.
Most of the entrepreneurial ideas die before execution because of the lacklustre attitude of the authorities. Many times people have to run to a number of places to get approval but with this initiative, the government will create SPOC or Single Point Of Contact which will support the entire startup ecosystem. They will follow the hub and spoke model wherein the Central government, state government. Financial institutions, consultants R&D etc. will work together to sustain entrepreneurial ventures.
The government has rolled out mobile app via which the startups can easily register themselves and check the status of their registration, obtain clearance and approvals etc.
The empanelment of Controller General of Patents, Designs and Trademarks (CGPDTM) has been done by the government of India to spread awareness about the IPR, patenting and trademark. This initiative will help the startups to file IP application and the best part is that government will bear the cost. The sole objective of this step is to help the startups protect their IP rights.
o The Startup India plan will enable the startup to apply for tenders floated by PSUs. Prior to this only experienced or companies having turnover could apply for tenders but with this policy now startups can compete with the rest.
The Insolvency and Bankruptcy Bill 2015 ("IBB")has the provision for the faster closure of operations in case the startup fails to succeed. This will further instigate the startups to experiment with ideas without the fear of following a lengthy procedure of closure or bankruptcy. Obviously, they need to meet certain criteria specified by the government to easily exit.
o Most of the entrepreneurial ideas fail to reach the stage of execution because of the lack of funding. Under the startup, India campaigns a corpus of Rs. 10,000 Crore will be created over a period of 4 years with the initial stage being allocated with the fund of Rs 2500 crore. This corpus will be monitored by a board empaneled by professionals from different industries, academic, and ones who have successfully started new ventures.
To aid the growth of entrepreneurship, the government has initiated the credit guarantee mechanism via National Credit Guarantee Trust Company/SIDBI with a corpus of Rs.500 crore per year for the coming 4 years.
Usually investors are not very keen to invest in new ideas but with the initiative of government, the investors who make an attempt to invest in start-ups they will get an exemption.
The startups established after April 1 ,2016, shall be exempted from tax on the profit generated by them. This will be valid for 3 years from the date of establishment of the company.
As per the Income Tax Act, 1961, if any startup receives any money (consideration) for shares that have FMV or Fair Market Value higher than that then the excess amount will be taxable.
The government has planned to organize national and international fest where people can come and display their new and creative ideas.
This mission has been launched with two objectives:
As of now India lacks the incubator setup wherein a business can flourish but with this step taken by the government, 35 new incubators will be set up across the nation with a funding support of 40% which will be provided by the Central Government.
A set up 31 centers will be established across India to aid the growth of 1200 startups . This includes 13 Startup centers which will receive annual funding t of Rs. R 50 lakhs and 18 Technology Business Incubators (TBIs)
Government has planned setting up 7 research parks across the nation which include the following:
This will demand and investment of Rs.100 crore for each place. These centers will have world class R&D facility and creating self- sustaining and technologically fertile environment.
Biotechnology as the field is expected to rise high in near future and in order to foster the growth of startups in this vertical the government has planned to set up 5 new Bio-clusters, 50 new Bio-Incubators, 150 technology transfer offices and 20 Bio-Connect offices. BIRAC AcE Fund in partnership with National and Global Equity Funds has been created to foster bio- entrepreneurship.
In order to inculcate the idea of entrepreneurship government has started 3 different programs that will work as a launch pad for students to come up with their innovative ideas. The programs are as follows:
In order to provide avant-garde incubators in India, this challenge has been rolled out to identify the best and leading incubators across India.
About the author: Satyendra Kumar Mishra
Satyendra Kumar Mishra is the founder and CEO of EmpressLegal.com which was founded with the singular objective of offerings the highest quality corporate and incorporation services to its clients all over the globe. Since its foundation, EmpressaLegal.com has helped entrepreneurs across India to incorporate their businesses in a fast and secure manner.