While it is not exactly part of action plan, this probably is the biggest positive change that has been bought by the Government. Now, startups will be ‘startups’ and not a ‘business’. Till date a startup was not separated in various policies of the Government. All were businesses. Now, we have definition for a startup and a clear direction for them from Government.
The most encouraging aspect is that Government is now looking at startups as a serious growth engine for India and want to help them achieve success.
Government wants to reduce the regulatory burden on Startups thereby allowing them to focus on their core business and keep compliance cost low. Startups shall be allowed to self-certify compliance (through the Startup mobile app) with 9 labour and environment laws. In case of the labour laws, no inspections will be conducted for a period of 3 years.
With Startup India Hub, Govt. wants to create a single point of contact for the entire Startup ecosystem and enable knowledge exchange and access to funding. They will work in a hub and spoke model and collaborate with Central & State governments, Indian and foreign VCs, angle networks , banks , incubators , legal partners, consultants, universities and R&D institutions. Govt. will also help startups through their lifecycle with specific focus on important aspects like obtaining financing, feasibility testing, business structuring advisory, and enhancement of marketing skills, technology commercialization and management evaluation.
Govt. plans to roll out a mobile app that will help startups quickly get off the ground. The app features will include registering startups with relevant agencies of the Government through a single form. The app will also have features like tracking the status of registration certificate, filing compliances, obtaining clearances and approvals among other things.
To promote awareness and adoption of IPRs by startups, Government is taking various steps that include fast-track examination of patent applications and rebate in fees. They will also help startups by providing panel of facilitators to assist in filing of IP application and the cost will be borne by the Government.
Going forward, norms for Startups will be relaxed when they are applying for Tenders floated by PSU. Earlier, this was not possible as all tenders require either “Prior Experience” or “Prior Turnover”. Now this will not be roadblock anymore.
Government plans to make it easier for startups to close and exit their business in case they are winding up operations.
While Government will not directly invest or fund startups, they will be doing it through Fund of Funds with a corpus of Rs.10, 000 crores. The fund of funds shall be managed by a board with private professional drawn from industry bodies, academia, and successful startups.
In order to overcome traditional Indian stigma associated with failure of startup enterprises in general and to encourage experimentation among Startup entrepreneurs, Government plans to provide credit guarantee comfort with flow of Venture Debt from the formal Banking system.
Government plans to provide tax exemptions to persons who have capital gains during the year, if they have invested such capital gains in the fund of funds recognized by the Government.
In what could be termed as one of the most positive moves, exemption for income tax shall be given on profits generated by startups for a period of 3 years out of their first five years. However, Minimum Alternate Tax (MAT) provisions will apply.
Currently, only the investments by venture capital funds in Startups are exempted from operations of provision under section56 (2). Now, the same shall be extended to investment made by incubators and angle investors in the Startups.
Govt. plans to organize one national and one international startup festival annually for showcasing innovation and providing a collaboration platform.
Govt. will provide a platform for promotion of world-class Innovation Hubs, Grand Challenges, Startups business and other self-employment activities, particularly in technology driven areas. This will be done through Atal Innovation Mission (AIM).
Government intends to create a policy and framework for setting-up of incubators across the country in public private partnership. 35 new incubators in existing institutions will be setup along with funding support of 40% shall be provided by Central Government. Government will also provide grant of 50 percent for 35 new incubators established by private sector.
In order to augment the incubation R&D efforts in the country, the Government will set up/scale up 31 centres (to provide facilities for over 1200 new Startups) of innovation and entrepreneurship at national institutes.
The Government shall set up 7 new Research parks at IIT Guwahati, IIT Hyderabad, IIT Kanpur, IIT Kharagpur, IISc Bangalore, IIT Gandhi Nagar and IIT Delhi with an initial investment of INR 100 crore each. The research parks shall be modeled based on the research park setup at IIT Madras.
To foster and facilitate bio-entrepreneurship,5 new Bio-clusters,50 new Bio-Incubators,150 technology transfer offices and 20 Bio-Connect offices will be set up in research institutes and universities across India.
In order to promote research and innovation among young students, the Government shall implement various innovation programs including Innovation Core, NIDHI and Uchhattar Avishkar Yojana (UAY)
To build world class incubators in India, Govt. plans to launch an annual Incubator Grand Challenge to identify leading incubators in India. Kudos to the Government for coming up with a startup action plan that really touches on every facet of India’s startup ecosystem. with such big help from the Government, there is no doubt, our startup ecosystem has the potential to be the best in the world.
We may assist you:-
Looking for Import-Export Consulting, GST Consulting,FTP Consulting, Custom Services at...Contact us
Import Duty Calculator used in calculate your import duty and taxes in a few quick stepsread more
You can also access relevants websites for important informations....read more