Mr Gurdip Singh
credit: Foreign Investors on India/fii-news.com
Startups are the next big economic force in India driven by a young and diverse entrepreneurial ecosystem, said the Minister of State for Commerce & Industry Nirmala Sitharaman.
Through the Start-up India initiative, we want to ensure that the momentum is accelerated through the Start-up India initiative, said Sitharaman at the opening of “Start Up India States” conference in New Delhi on July 23, 2016.
“We are determined to make it a startup revolution and to ensure that every aspiring entrepreneur is able to achieve his/her potential,” she stressed.
The technology startup number is expected to reach 12,000+ by 2020 from close to 4,400 currently.
“India is buzzing with entrepreneurial activity like never before and is at the forefront of an entrepreneurial revolution,” said Nirmala, pointing out that India has been pegged at 3rd place behind USA and UK in terms of the number of Startups.
Startup India initiative is designed to foster innovation, create jobs and facilitate investment, she highlighted.
“Government is committed to make this initiative a scalable reality and to provide an environment for our Startups to thrive in,” the minister told entrepreneurs, innovators, thought leaders and change catalysts at the conference.
“We have recognised the need to handhold and guide startups particularly in their early growth stage,” she added.
“To meet this, we have operationalised the Startup India Hub on 1st April 2016 to resolve queries and to provide handholding support to Startups,” she said.
The hub has been able to resolve more than 13,500 queries received from Startups through telephone, email and Twitter, the minister highlighted.
“We have also recognized the need of incentivizing innovative startups because we are aware that they are the engines of growth,” Sitharaman continued.
The Finance Act, 2016 has made provision for Startups to get income tax exemption for 3 years in a block of 5 years, if they are incorporated between 1st April 2016 and 31st March 2019.
Tax exemption on investments above Fair Market Value have also been introduced for investments made in Startups.
To avail these benefits one must get a Certificate of Eligibility from the Inter-Ministerial Board of Department of Industry Policy (DIPP) and Promotion.
The Inter Ministerial Board examines the eligibility of recognized Startups, which are incorporated after April 1, 2016, for tax benefits. Startups that have not been able to obtain recognition are being guided and handheld through the process by the Startup hub, she stated.
Funding is perhaps the most important input because from day one any entrepreneur will need funds to develop his ideas and give it a concrete shape, she noted.
A “fund of funds” of Rs.10,000 crores for Startups has been established, which is managed by Small Industries Development Bank of India (SIDBI).
The fund will invest in Securities and Exchange Board of India (SEBI) registered Alternative Investment Funds (AIFs) which, in turn, will invest in Startups.
Thus, this fund acts as an enabler to attract private capital in the form of equity, quasi-equity, soft loans and other risk capital for Startups, Sitharaman assured.
She called on Startups to concentrate on the idea they are working on and not worry about compliances under various Acts.
Startups working in areas covered under the list of 36 “white” category industries have been exempted from all the applicable compliances under 3 Environment Laws viz. the Water (Prevention & Control of Pollution) Act, 1974; the Water (Prevention & Control of Pollution) Cess (Amendment) Act, 2003 and the Air (Prevention & Control of Pollution) Act, 1981.
Startups also need to be assisted during that stage when they are scaling up and trying to venture into new markets. To that end, we have made provision for relaxed norms on prior experience and turnover for public procurement for micro and small enterprises in the Procurement Policy of Ministry of Micro, Small and Medium Enterprises (MSMEs).
More than 250 incubators have been recognized by Government of India to provide recommendation to startups.
In order to augment the existing list of incubators, a module to recognize incubators has been launched.
This shall enable incubators to obtain recognition from Government of India, allowing them to issue recommendation letters to Startups, said the minister.
DIPP has written to top 50 companies requesting them to support the initiative under their CSR activities by setting up new incubators or scale up existing incubators in collaboration with educational institutes. fii-news.com