The much awaited announcement is out. India has seen the potential in Startups and a revolutionary plan is on its way, solely built for startups in India. The news has been floating around and this article will tell you why it is music to the ears of the new entrepreneurs.
#StartUpIndia is the new initiative that has gained quite popularity amongst innovators and investors alike right now. The news of the initiative took the country by storm as it will change the way startups are functioning. There is limited information out there right now but it’s enough to make us crave for more. First and foremost the policy will be applicable only to a Startup and for that Government has defined startup to be eligible for the scheme.
Definition of Startups [only for the purpose of Government schemes]
“Startup means an entity, incorporated or registered in India not prior to five years, with annual turnover not exceeding INR 25 crore in any preceding financial year, working towards innovation,development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.
Provided that such entity is not formed by splitting up, or reconstruction, of a business already in existence.
Provided also that an entity shall cease to be a Startup if its turnover for the previous financial years has exceeded INR 25 crore or it has completed 5 years from the date of incorporation/ registration.
Provided further that a Startup shall be eligible for tax benefits only after it has obtained certification from the Inter-Ministerial Board, setup for such purpose.” – Annexure I, Startup India Action Plan 2016.
What is #StartUpIndia?
Startup India is an initiative taken by the Government which will prove to be a benchmark for policies for new entrepreneurs with great ideas. The Government hopes to boost employment opportunities through new startups and hence they have made policies which will help in building new businesses. These start ups will include a wide array of sectors including digital technology, agriculture, manufacturing, social sector, healthcare, education and so on, and it will be applicable to existing tier 1 to 3 cities including semi-urban and rural areas.
The government has mentioned some of the key features of #StartUpIndia and here’s what they are:
Make it Easy by Reducing Regulatory burden on start ups
The startups usually face a lot of challenges in regulatory burdens. Government is planning to reduce them to ensure that startups can focus on their core business, and experience an easy environment. Regulatory formalities are time consuming and difficult in nature. The new startups lack the nuances of such stringent regulations. A flexible and friendly environment is much needed so that small businesses can thrive first. This will make the regulatory a little more lenient with permissions like self certify compliance for labor laws and no inspection for the period of 3 years unless there is a formal complaint.
Startup India Hub
This hub will work as the core of this movement. Some startups have great ideas but they don’t reach their full potential due to lack of experience and finance. This hub is to solve that problem by collaborating Government units, angel networks, banks, legal partners, consultant and many more who already know the ropes of the business.
Mobile App for on the go accessibility
Mobile apps have worked wonders and they will work wonders for startups. There will be a simple form made for the startups to register with relevant agencies of the Government. Tracking the status of registration form and downloading of the registration certificate will be possible anytime because of the application. It will be made available from 1st April, 2016.
Support for Intellectual Property Rights
Intellectual Property Rights (IPR) has a crucial importance. Every important aspect of the company which makes them unique should be protected by law. This includes patents, copyrights and trademarks owned by the company. Startups have very limited man power and this task can be a little challenging hence the government will bear all the cost of the facilitators. Startups will also be provided an 80% rebate in filing for the patents.
Fund of Funds of ₹10,000 crore
Government is set to support in funding also – with an initial corpus of ₹2,500 each year for 4 years. Fund of Funds means it will not invest directly but will facilitate SEBI (Securities and Exchange Board of India) registered venture funds. Fund of Funds will be managed by private professionals drawn from industry bodies, academia and successful startups. LIC too shall be a co investor in the Fund of Funds. The Fund will support a wide range of product categories like manufacturing, agriculture, health, education and many more.
No Tax to Startups for 3 years
Startups need time to grow and expand – for that the government has planned to exempt their profit from income tax for a period of 3 years so that they can accumulate funds to grow.
Organize Startup fests to showcase the great minds
Fests are the places where ideas usually take off. Government plans to organize national and international fests. These fests will provide platform to get a bigger audience where innovators and investors can meet.
Apart from this the Government has also made plans for incubators – from providing them to funding them at various facilities. Innovation focused programs where innovations by school kids will be paid a greater attention and others will get rewarded as well. Government is going to help Startups by taking help from private players and this joint venture is surely going to see the success once inaugurated.
This was just the glimpse of the scheme that will help in turning many dreams into realties, if you wish to see the full report you can download the attachment.