One of the major initiatives of the Government of India is to create a strong ecosystem startup in India for startups and new ideas in the country, which will lead to the economic development of the country and generate massive employment opportunities. Startup in India is Standup India, was announced in the Independence Day 2015 speech by Prime Minister Narendra Modi. This is an effective scheme by the Modi government to help the youth of the country. This initiative has been taken by Indian Prime Minister Narendra Modi to provide an opportunity for the youth to become industrialists and entrepreneurs, for which a startup in India network needs to be established. Start-up means to provide finance to the youth of the country through banks so that they can start with better strength so that they can create more jobs in India.
Summarization of Startup in India Action Plan
For the purpose of achieving the startup in India plan, the Government of India has shown an action plan or action plan that encompasses all aspects of the startup plan. The action plan announced by the government in this regard is all about the startup in India ecosystem Hopes to address aspects and accelerate the spread of this movement.
The startup in India action plan is mainly divided into three major parts: –
- Facilitation and preliminary assistance
- Support and incentive grant
- Industry-Academic World (Academia) Partnership and Evolution
The startup is an entity which has not been registered in India for more than five years and whose annual turnover does not exceed Rs 25 crore in any financial year. It is an entity that works towards the innovation, development, deployment or commercialization of new products or services inspired by technology or intellectual property.
The entity may not have been formed by the fragmentation /reconstruction of a business already in existence.
The unit will not be treated as a startup in India if it has a turnover of more than Rs 25 crore in the last financial year or has completed 5 years from the date of formation.
The startup will be eligible for tax benefits after obtaining a certificate from the Inter-Ministerial Board.
Start-up in India Action Plan: Simplification and Initial Support
Self-certification based compliance system
The aim is to reduce the regulatory burden on startups so that they can focus on their core businesses and keep costs of compliance low. Regulatory arrangements will thus be more simple and flexible and inspection will be more meaningful and simple.
Startup in India Hub
Creating a liaison space for the entire startup in India ecosystem leading to knowledge exchange and funding. The government will be the main stakeholder and will work closely with central and state governments, Indian and foreign capitalists, angel networks, banks, incubators, legal partners, consultants, universities and R&D institutions.
Rolling out mobile applications and portals
Will act as an interactive platform for startups with government and regulatory institutions. From 1 April 2016, it will be made available on all major mobile/smart device platforms.
Legal aid and rapid patent testing at a low rate
In order to promote intellectual property rights and bring awareness and ensure the sustainable development and growth of new startups, the scheme will make patent filing easier.
Public procurement relaxed criteria for startups in India
It aims to provide equal opportunities for startups compared to experienced companies. In the case of tenders issued by the government or PSUs, startups will be exempted from ‘foreseeability/turnover’ criteria without relaxation in quality standards.
This action plan will facilitate startups in India to shut down operations in the event of a failure. An Insolvency Professional will be provided for startups that will be in charge of selling the company’s assets for payment to creditors in six months’ time. This process will accept the concept of limited liability.
Support and incentive grant
The government will set up an initial fund of Rs 2500 crore per year and a total fund of Rs 10,000 crore over a period of 4 years.
Credit Guarantee for Startups in India
To encourage banks and other lenders to provide venture loans for startups, provision of the budget of 500 crores per year by the Credit Guarantee Mechanism / SIDBI through National Credit Guarantee Trust Company (NCGTC) for next four years. Is being considered.
Tax exemption on capital gains for a new startup in India
In order to encourage investment in startups India, the government will give exemption in capital gains to those who have earned capital gains during the year and who have invested such capital gains in the government recognized fund of funds.
Tax rebate for three years for startups
The profits of startups will be exempt from tax for a period of 3 years to address the working capital requirement of startups in India, encourage growth and provide them with a competitive platform.
Tax exemption in investment at fair market value for startup India
Investments by incubators in startups will be exempt from investment tax.
Industry – Education (Academia) Partnership and Emergence organizing Startup Festivals to provide an innovative new innovation demonstration and collaboration platform –
To strengthen the startup ecosystem in India, the government has proposed to start startup festivals nationally and internationally. It will be a platform to showcase their work and ideas to a wider public community, involving potential investors, consultants and fellow startups.
Launch of Atal Innovation Mission (AIM) with Self Employment and Talent Utilization (SETU) Program –
It will serve as a platform to promote world-class innovation hubs, grand challenges, startup businesses and other self-employment activities, especially in technology-driven areas.
Use of private sector expertise for incubator setup
The government will formulate a policy and framework for setting up incubators across the country in public-private partnerships.
Establishment of innovative centres in national institutions
The government will set up 31 centres of innovation and entrepreneurship in national institutions to increase R&D efforts in the country. To encourage startups by the students, 13 centres will be provided annual financial assistance of Rs 50 lakh for 3 years.
Establishment of 7 new research parks on the lines of research park established at IIT Madras –
To develop successful innovations through joint R&D efforts of academics and industry, the government will set up 7 new research parks in the institutes with an initial investment of Rs 100 crore per institution. These research parks will be on the lines of the research park established at IIT Madras.
Promoting Startups in the Biotechnology Sector
The biotechnology sector in India is on a strong growth path. The Department of Biotechnology is striving to set up around 2000–500 new startups per year to set up 2000 startups by the year 2020.
Start of innovative focused programs for students
The government will promote research and innovation among young students and has introduced programs such as Abhinavic Kora, Nidhi (a grand challenge program), Higher Invention Scheme etc. Initially, these schemes will be applicable only for IITs and each project can be up to Rs 5 crore.
Annual Incubator Grand Challenge
Incubators play an important role in identifying startups at an early stage and supporting them at various stages of their life cycle to build an effective startup ecosystem. The government is proposing to invest in the construction of world-class incubators in the first phase. The initial goal is to set up 10 such incubators. For this, the government will identify 10 possible incubators to become world-class. Each of these will be given Rs 10 crore as financial assistance and these will become reference models for other such incubators. These will then be displayed on the Startup India portal. The Grand Challenge competition will be organized to identify such incubators and will be continued annually.
Key highlights of the plan
Profits to be earned by startup traders will be exempt from income tax for the first three years of commencement of business.
There will also be an exemption from the capital gains tax levied at the rate of 20% on the sale of their assets after investment made by entrepreneurs to promote financing in such enterprises. This rebate will also be available on investment by a government recognized venture capital funds.
The Government’s ‘Startup in India’ program aims to create an environment conducive for promoting innovation in the country so as to promote economic growth and provide large scale employment opportunities in the country.
It is proposed to form a National Credit Guarantee Trust Company by the government in which a budget allocation of Rs 500 crore will be made annually for the next four years.
A liberal patent system will also be introduced for these new technology-based enterprises coming up with innovative ideas in the country. These enterprises will be given 80% exemption in registration fee in patent registration.
According to the Prime Minister, there will also be a provision in the insolvency law to provide a simple exit option to start-up enterprises to shut down a business. Under this, start-ups will be able to close their business within a period of 90 days.
Innovation courses will be started for the students and it will be enlarged by focusing on 10 lakh children in 5 lakh schools.
The Prime Minister said that the self-certification based compliance system will reduce the regulatory burden on startups. This system of self-certification compliance will be available to employees in terms of gratuity payment, contract employees, Employees Provident Fund, water and air pollution laws.
The government will create an initial fund of Rs 2,500 crore to support the startup in India funding, which will have a total fund of Rs 10,000 crore during the next 4 years.
India has the third-largest number of startups worldwide. The government will also give these enterprises a variety of leeway in the matter of taking government procurement contracts. Start-up enterprises will be exempted in terms of experience and turnover limits on government contracts.
Special arrangements have been made for women in this.
How can I start a startup in India?
- Think of a good idea
- Write a business plan
- Analyze market
- See what’s missing in the market
- Select your startup name
- Make a model
- Show your model to 100 people
- Find co-founder
- Register Your Startup Business
- Get funding idea
- Find a guru
- Follow up your customers
- Quickly get 1000 users
- Success – whatever it is
Who can apply for startup India?
- A company period of existence and working period not more than 10 years
- Your company should be a private limited company or a partnership firm or a limited liability partnership
- The company annual turnover not exceeding more than 100 crores
- Your company should be new not reconstructed or already in existence.
- You should have an innovative and scalable idea
How can I get funding from startup India?
A ₹ 10,000 crore fund is set-up by our government to provide funds to the new startups. The government is also providing a guarantee to our states to encourage banks and other financial institutions for providing fund for a new startup. Ask your bank branch for a new startup fund.
What is the definition of a startup in India?
If a company want to work in India, then they must open their head office in India. Their annual turnover is not greater than ₹ 100 crores (in the US $14 million).
How can I start a startup in India with no money?
- Make an idea about your startup
- Research on the market about your startup idea
- Make a future plan for your startup
- Take another person’s suggestion about your product
- Search a partner if needed
- Raise fund for your startup
How can I get a startup India scheme?
- Visit the Shram Suvidha Portal
- Registered at Shram Suvidha Portal and login.
- After login, click on the link “Is Any of your Establishment a Startup?”
- Follow all instructions given there.
- Startup india benefits
- To Startup india login
- Startup india loan
- For Startup india hub
- MoreStartup in india list
- Startup india app
- Startup india learning program
Some Related Source for Startup in India Scheme:
- Go to this link to download the startup mobile app
- This link to fill your application for startup recognition
- Go to this link for the format of application for grant up to 20%
- Recommendation letter format of a PG educational institute established an incubator
- Recommendation letter format of an incubator recognized by the Government of India
- Letter format of incubator aided by India / State Government
- Startup Validation Authentication
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