If you are an entrepreneur or are aspiring to become one, ‘ Startup India, Standup India ’ is one scheme you should pay wide attention to! Finally we have a scheme boosting entrepreneurship in the country, that too at the grassroot level! This ambitious scheme by the Indian government is about to give a kick start to the dreams of innumerable young entrepreneurs of the country and will give a much necessary push to the uncountable evolving start-ups. Let’s take a look at the 10 biggest points from the announcement:
1. Tax exemptions for three years and concessions on capital gains tax.
2. Compliance regime based on self-certification and no regulatory inspection for three years
3. A fund of Rs. 10,000 crore to back startups. Initially the corpus will be Rs. 2,500 crore. Also, a credit guarantee fund for startups.
4. A startup India hub - a single point of contact for interactions with the government.
5. Atal Innovation Mission (AIM) for promotion of research and development including 500 tinkering labs, 35 public-private sector incubators, 31 innovation centres at national institutes, 7 new research parks, 5 new bio-clusters.
6. 90 days for a startup to close down its business.
7. 80 per cent reduction in patent filing fee and fast-track mechanism for startup patent applications. Also, a panel of legal facilitators for startups to file IP (patents, designs, trademarks) with costs borne by government.
8. Relaxed norms of public-procurement for startups. No requirement of turnover or experience, but no relaxation in quality.
9. 5 lakh schools and 10 lakh students to be involved in core innovation programmes. National and international startup festivals to provide visibility.
10. A mobile app to be launched on April 1st making it possible to register startups in one day.
But do you know which organizations can avail of these benefits? Let us tell you:
1. It must be an entity registered/incorporated as a:
- a. Private Limited Company under the Companies Act, 2013;
- b. Registered Partnership Firm under the Indian Partnership Act, 1932; or
- c. Limited Liability Partnership under the Limited Liability Partnership Act, 2008.
2. Five years must not have elapsed from the date of incorporation/registration.
3. Annual turnover (as defined in the Companies Act, 2013) in any preceding financial year must not exceed Rs. 25 crores.
4. Startup must be working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.
5. The startup must aim to develop and commercialise:
- a. a new product, service or process; or
- b. a significantly improved existing product, service or process that will create or add value for customers or workflow.
6. The startup must not merely be engaged in:
- a. developing products, services or processes which do not have potential for commercialization; or
- b. undifferentiated products or services or processes; or
- c. products, services or processes with no or limited incremental value for customers or workflow.
7. The startup must not be formed by splitting up, or reconstruction of a business already in existence.
8. The startup must have obtained certification from the Inter-Ministerial Board, setup by DIPP to validate the innovative nature of the business and
- a. be supported by a recommendation (with regard to innovative nature of business), in a format specified by DIPP, from an incubator established in a post-graduate college in India; or
- b. be supported by an incubator which is funded (in relation to the project) from GoI as part of any specified scheme to promote innovation; or
- c. be supported by a recommendation (with regard to innovative nature of business) in a format specified by DIPP, from an incubator recognized by GoI; or
- d. be funded by an Incubation Fund/Angel Fund/ Private Equity Fund/ Accelerator/Angel Network duly registered with SEBI* that endorses innovative nature of the business; or
- e. be funded by GoI as part of any specified scheme to promote innovation; or
- f. have a patent granted by the Indian Patent and Trademark Office in areas affiliated with the nature of business being promoted.
* DIPP may publish a ‘negative’ list of funds which are not eligible for this initiative.
What we think:
It is great to see the government finally acknowledge the relevance and importance of start-ups in our country. Promoting entrepreneurship at the grassroots level is commendable. By creating a structured programme for start-ups, the youth of our country will be faced with fresh opportunities everyday. With the government promising financing and incentives for start-up ventures, the number of employment opportunities will increase tenfold in our country.
With the involvement of government interests in the start-up ecosystem, we can expect a great push in the progress and the development of these start-ups. With the government formalities being reduced or rather eased out, we can expect many more start ups to come up and also stay afloat for a longer time.
It’s great to see that the government has considered the exit policies also, encouraging the entrepreneur to start up again, just in case it may not take off at the first instance. We wait to see how this kind of networking will benefit start-ups in gaining funding for their projects. In his interview to Your Story, Mr. Jayant Sinha, the Minister of Finance for the state, mentioned, “Government will not be funding start ups. VCs will now fund start ups. Find the right VC firm and approach them”.
In terms of scope, we give 'Startup India, Standup India' full marks. The intent is there, the sincerity is there. We wait to see whether it is executed as per its promises!
We hope this blog comes handy to all you budding entrepreneurs and benefits you in the long run! We wish you guys all the best...Innovate your way to success!