On India’s 69th Independence Day, Prime Minister of India, Mr. Narendra Modi announced the “Startup India Initiative” to give boost to the entrepreneurial ecosystem in India. Five months later, on January 16th this year, he unveiled the much-awaited “Startup Action Plan” in New Delhi amidst the hall full of entrepreneurs.
Here are the key points from Prime Minister’s “Startup Action Plan” –
- Compliance regime based on self certification – This move is to reduce regulatory burden on startups Startups will be allowed to self-certify compliance with labour and environment laws. In case of labour laws, no inspection will be conducted for three years.
- Startup India Hub – This will be created as the single point of contact for the entire startup ecosystem to enable exchange of knowledge and access to funding.
- Simplifying the startup process – This move is for making startup registration easy. A startup would be able to set up by just filling up a short form on a mobile app or online portal. A mobile app will be launched on April 1 to enable one day startup registrations. The app will also include clearances and approvals.
- Patent protection – The government will be working on the fast-tracking the process of Intellectual Property Rights (IPRs). Patent protection and IP rights has been a major concern for Indian startups. The IPR procedure will also be made transparent.
- A $1.5 billion fund for startups – The government will set up an INR 10,000 crore fund to be invested over four years with an initial corpus of INR 2,500 crore. The fund will be managed by a board with professionals from industry bodies, heads of successful startups and academia.
- Faster exists for startups – To make the startup exits easier, the provision for fast-tracking closure of businesses have been included in ‘The insolvency and Bankrupcy Bill 2015’. Startups with simple debt structures may be wound up within a period of 90 days from making of an application for winding up.
- Relaxed norms of public procurement – The government will exempt startups in the manufacturing sector from the criteria of “prior experience/ turnover” on the condition that they have their own manufacturing facility in India.
- Exemption from capital gains tax – Tax exemptions shall be given to startups in case capital gains are invested in the fund of funds recognised by the government.
- Tax exemption for startups – To promote growth of startups in India, the profit of startups, set up after April 1,2016, shall be exempted from income-tax for a period of three years.
- Startup Fests – There would be specific startup festivals which will give a platform to showcase innovation and will also enable collaboration.
- Credit guarantee fund for startups – To accelerate the growth of entrepreneurship through credit to innovators across all sections of society, credit guarantee mechanism through National Credit Guarantee Trust Company shall be rolled out with a budgetary corpus of INR 500 crore per year for the next four years.
- Atal Innovation Mission to encourage entrepreneurship and innovation – Atal innovation mission initiative, named after former Indian Prime Minister Atal Bihari Vajpayee, will establish sector-specific incubators. It will also have 500 ‘Tinkering Labs’ to provide pre-incubation training and a seed fund for high-growth startups. The plan also includes innovation awards including a Grand Innovation Challenge Award for finding ultra-low cost solutions for India.
- An annual incubator grand challenge – The government will hold an annual challenge under which it will identify and select 10 incubators, based on pre-defined Key Performance Indicators (KPIs) and will provide them a grant of INR10 crore (US$1.5 million) each as financial assistance to ramp up their infrastructure.
You can also get an idea of the Startup India Action Plan by below mentioned video summary prepared by Yourstory media (India’s largest platform for startups and entrepreneurs).
While “Startup India, Standup India” initiative by the Indian government has contributed in bringing startups to mainstream, the Indian startup ecosystem is eager to see the execution. Let’s hope that Indian Government is able to execute this Action Plan at the earliest.