• Government of India has launched the Start-Up India initiative which aimed at promoting entrepreneurial culture in the country. Start-up India Action Plan was unveiled providing a slew of incentives for the youth to become job creators rather than job seekers.
• According to the government notification, an entity will be identified as a startup.
a) Till up to five years from the date of incorporation.
b) If its turnover does not exceed 25 crores in the last five financial years.
c) It is working towards innovation, development, deployment, and commercialization of new products, processes, or services driven by technology or intellectual property.
• Start-up India Action Plan highlights are:
a) Compliance Regime based on Self-Certification: There are provisions of self certification to comply with various labour and environment laws such as Contract Labour (Regulation and Abolition) Act, 1970 or Air (Prevention & Control of Pollution) Act, 1981 etc. It has been done to reduce the regulatory burden on Startups thereby allowing them to focus on their core business and keep compliance cost low.
b) Mobile App & Portal: The government has proposed to create a single window web portal or Mobile App for purpose of registration of start-ups, tracking status of registration, Filing compliances for various clearances/approvals, applying for various schemes or collaborating with various Startup ecosystem partners etc.
c) Fast-tracking Patent Examination at Lower Costs: For effective implementation of the scheme, a panel of “facilitators” shall be empanelled by the Controller General of Patents, Designs and Trademarks (CGPDTM), who shall also regulate their conduct and functions. The government will bear entire facilitation costs and startups have to pay only statutory fees for patent registration. Startups shall be provided an 80% rebate in filing of patents as compared to other companies.
d) Faster Exit for Startups: In terms of the Insolvency and Bankruptcy Bill 2015 (IBB) which has been tabled in Lok Sabha, Startups with simple debt structures or those meeting such criteria as may be specified may be wound up within a period of 90 days from making of an application for winding up on a fast track basis.
e) Funding: Under Start-up India scheme, government will set up a fund with an initial corpus of Rs 2500 Cr and total corpus of Rs 10000 Cr for next 4 years. The Fund will be in the nature of Fund of Funds, which means that it will not invest directly into Startups, but shall participate in the capital of SEBI registered Venture Funds.
f) Tax Benefits: Start-ups shall be exempted from income tax for a period of first 3 years.
g) Atal Innovation Mission (AIM) and SETU: The AIM has launched with Start-up India scheme. It has two main functions that are as follows:
– Entrepreneurship promotion through Self-Employment and Talent Utilization (SETU), wherein innovators would be supported and mentored to become successful entrepreneurs. Establishment of 500 Tinkering Labs, Pre-incubation training, Strengthening of incubation and Seed funding are some examples of entrepreneurship promotion.
– Innovation promotion: to provide a platform where innovative ideas are generated such as Institution of Innovation Awards (3 per state/UT) and 3 National level awards etc.
h) Govt will create innovation or Start-up centres at national institutes such as IITs, NITs or IIITs with various facilities like incubation, etc.