Start Up India Initiative – how startups can avail benefits?
The Indian PM Narendra Modi on Independence Day announced an initiative Start Up India ΓÇô it aims to create an ecosystem where entrepreneurship and innovation will be fostered to accelerate this mission. This mission envisions making India a place known for innovation, design and startups.
India which has one of the highest young pool of IT talent and a significantly high portion is outsourced to this country ΓÇô creating an environment of innovation and startups was much needed and this program provides a hope in this direction. After the official launch on Jan 16th, a positive environment was created beginners found it hard ΓÇô how to participate or how to avail those facilities mentioned in the program.
Since the launch of this initiative the government has taken various steps to improve the Indian startup ecosystems under the mission. Some of the important sections can be summarized as:
- Regulatory formalities such as compliance and environment laws have been relaxed. Now through the Start up mobile app startups can self-certify compliance with 9 labor and environment laws.
- The startups can also register their startup through website and save their time for submitting different applications to concerned ministries.
- At present, central and state governments have to procure mandatorily 20% from the Micro Small and Medium Enterprises (MSMEs). In order to promote entrepreneurship the government will remove the ΓÇÌprior experience and turnoverΓÇÕ clause without any relaxation in quality and technical standards.
- The Insolvency and Bankruptcy Bill 2015 paves the way for faster winding up of startups. It helps startups to remove their resources from a failing business model and start a more improved or innovative venture.
- Corpus of Rs.2500 Cr for the initial year and total Rs.10000 Cr over the 4 years would be provided by the government to help startups.
- Credit Guarantee Fund for startups ΓÇô banks would provide venture debts to startup through National Credit Guarantee Trust Company (NCGTC)/ SIDBI with a budgetary corpus of Rs.5oo Cr per year for the next five years.
- Startups will be exempted from first 3 years.
- 31 innovation and entrepreneurship center across India. The premiere institutions IIT/IIM/NITS etc would be the hosting institutes for these centers.
- 7 new research parks modeled or based on the IIT Madras model.
However, the innovators and entrepreneurs still find it difficult ΓÇô how to start or get the help under start up India mission. The launch of application and startup portal has made it easy for the startups to register and get more updates on financial help and other benefits on the finger tips.
As per the new definition a new startup can be considered ΓÇÌstartupΓÇÕ only if it fulfills the criteria given bleow:
- An entity will be considered ΓÇô up to 5 years from the date of its incorporation/regesitration.
- Its turnover in any year shouldnΓÇÕt have exceeded Rs.25 Cr.
- A proprietorship or public limited company is not eligible for this scheme.
How a startup can benefit under this initiative?
For availing benefits discussed under this program ΓÇô a business entity first needs to be recognized as a startup by applying on Startup India App or Portal.
To avail the tax benefits, a startup would need to get a certification from Inter-state Board of Certification.
On successful submission of application, a system generated verifiable certificate of recognition can be downloaded.
For more information, you can visit the portal or download the application.
To download the app, Click here.
To visit the portal, Click here. ┬á