Answer by Awdhesh Singh:
Indian Prime Minister Shri Narendra Modi has launched the ‘Startup India’ campaign in an event in Delhi on January 16, 2016. He revealed a number of promising initiatives from the ‘Startup Action Plan’ to encourage digital entrepreneurship. Small and startup businesses are expected to benefit from the tax reduction, funding support and many other benefits from the government. The details are as following.REGISTRATION OF STARTUPSA mobile app would be made live in April 2016 that would, for budding start-ups, act as a window for information exchange and interacting with government and regulatory bodies. It would help start a new company in a single day as all paperwork would be filed through the mobile app and portal.The government has also allowed several measures to help startups in doing their business at the earliest
- A panel to aid start-ups with legal support and assistance in filing of patent application.
- Government appointed facilitators shall help start-ups in filing and disposal of patent applications
- The govt would bear the cost of it
- Norms of public procurement for start-ups to be relaxed
- Public sector units would give start-ups preference.
- 80 percent rebate on filing patent applications by start-ups
- Start-ups to be given 80 percent rebate in filing patents to help them lower costs of setting up businessFacilitation Measures by GovernmentThe government would help the startups in a number of ways.
- There will be a Start-up India Hub
- An entire start-up ecosystem that would be a set-up and a friend, mentor and guide for start-ups through their entire journey
- Setting up of 7 new research parks modelled on the research park at IIT-Madras
- Seven new research parks with an initial investment of Rs 100 crore each would be set up
- 35 new incubators in institutions
- A maximum of Rs 10 crore financial support to be given by central government to new incubators
- Launch of Atal Innovation Mission– Entrepreneurship promotion
- Sector-specific incubators to be established
- 500 tinkering labs with 3D printers in universities
- Pre-incubation training to potential entrepreneurs
- Strengthening of the existing incubation facilities
- Seed funding to high growth start-ups
- Innovation promotionBENEFITS TO STARTUPS1: Introduction of compliance regime based on self-certificationStart-ups would be allowed to self-certify compliance with labour and environment laws. As far as labour laws are concerned, no inspection would be conducted for a period of three years. In case of environment laws, start-ups under ‘white’ category would be able to self-certify compliance.2: Fast track mechanisms of start-up patent applicationsThe government would allow start-ups to realise the value of their intellectual property rights (IPR) at the earliest possible, patent applications of the start-ups will be fast tracked for examination and disposal3: Faster exits for start-upsProvisions for fast-tracking closure of businesses have been included in ‘The insolvency and Bankruptcy Bill, 2015’. Start-ups, who have simple debt structures, can be allowed to wind up within a period of 90 days after filing an application4: Tax exemption to start-ups for 3 yearsStart-ups set up after April 1, 2016, shall be exempted from income-tax for a period of three years5: Tax exemption on investments above fair market valueExemption would be available to venture capital funds to invest in start-ups above fair market value (FMV). It would also include investments made by incubators above FMV6: Tax exemption on capital gainsTax on long-term capital gains in unlisted entities would be cut from present rate up to 20 percent7: Funding SupportThe government shall also provide support in funding the startups in the following manner.
- Credit guarantee fund for start-ups
- A credit guarantee mechanism through National Credit Guarantee Trust Company and SIDBI to be rolled out with a budgetary corpus of Rs 500 crore per year for the next four years
- Funding support through fund of funds with a corpus of Rs 10,000 crore
- The government to set up a fund with an initial corpus of Rs 2500 crore and a total corpus of Rs 10000 crore over a period of four years
- Institution of innovation awards: 3 per state/UT and 3 national level
- Providing support to State Innovation councils for awareness creation and organising state-level workshops/conferences
- Launch of Grand Innovation Challenge Awards for finding low-cost solution to intractable problemsSource:1: