The central Government has recently launched the a lot of anticipated and required initiative known as as ‘Start-up India’. the govt. has issued an action plan to help startup companies and encourage entrepreneurship in India.
We all understand that how difficult and challenging it’s to establish a start up company in India. A start up company could need to handle corruption problems, lack of financial resources, complex approval processes etc., to check the light of the day. Also, most of the start-ups are either opposed or killed by the large corporates at the initial stage itself.
Most of the funding of Indian start-ups (around 90%) comes from foreign venture capitalists and pe funds (Private Equity). as an example, Grofers, a grocery startup has raised 166.5 million from Sequia Capital & Soft Bank. this can be the case in most of the start-ups. various start-ups like gray Orange robotics, ola Cabs etc have had funding from foreign Venture Capitalists only.
To change this scenario in India, to get rid of risk aversion and to encourage free and fair competition, ‘the Start-up India action plan’ lists out a comprehensive set of structural and regulatory reforms.
Startup India may be a flagship initiative of the govt. of India, intended to build a powerful Eco-system for nurturing innovation and Startups within the country which will drive sustainable economic growth and generate massive scale employment opportunities.
What is a Startup Company?
A startup may be a new formed business that is in the first stage of its business operations. Startups are usually little and initially financed by few founders or angel investors. It is in the form of an organization, a partnership firs or even a sole-proprietorship firm.
Top Startup companies in India
Below are a number of the popular Startups in India;
Govt’s ‘Startup India, Standup India’ scheme : Eligibility conditions
- To avail the benefits under this initiative, the startup entity may be a non-public Ltd. (or) a registered Partnership firm (or) a limited liability Partnership Firm (LLP).
- The Startup entity mustn’t be more than 5 year recent one.
- The annual turnover of the start-up company mustn’t have exceeded Rs 25 crore in any preceding financial year.
- Any entity that has been created by simply splitting the existing business or company won’t be treated as a Startup company.
- A startup company should aim to develop a brand new product or service that is commercially viable (which have the potential for commercialization) and may create or add value for customers.
Key highlights of Startup India Action plan
Below area unit some of the key benefits that are mentioned in Govt’s Start-up Action plan;
- Income Tax Exemption for the primary 3 years on the profits made by the startup firms.
- Exemption on Capital Gains taxes. (The 200th tax are exempted on the capital gains made by the government approved Venture Capitalists)
- The government can initially set up a corpus of Rs 2,000 crore to provide funding support to startup companies. (A total of Rs 10,000 cr corpus are going to be provided over the next 4 years)
- Fast track examination of Patent & intellectual property Rights applications filed by the start-up companies.
- IPR protection to start-ups and new companies are provided. the govt. offers free legal support for filing patents and 80th reduction in filing patent fee. This way, an entrepreneur wouldn’t lose his ideas to a different.
- The startup companies can have the option to self-certify themselves with respect to most of the rules related to ‘Labour & environment Laws’. The self-certification will be done through ‘Startup India Mobile App’ which can be launched by the government in april 2016. (Laws related to Gratuity, employees Provident Fund, pollution control etc.,)
- Industry wise ‘Startup incubators’ are going to be set up across the country.
- New and special schemes targeting women entrepreneurs also will be launched.
- In case of failure (bankrupt) of a startup enterprise, the govt. aims at providing speedy winding up procedures.
- Single-point contact centre are going to be established for all the works & issues related to startup firms.
- Innovation hub under Atal Innovation Mission are created.
- Registration of a startup company will be done in one day through Startup India Mobile app / portal from April 2016.
Around 400th of India’s total population is below 20 years old. there’s no dearth of supply of educated/qualified young talents in India. the govt. must offer an ecosystem to encourage tiny entrepreneurs to set up new companies and generate employment in India.
- As per the action set up, the start-up company needs a ‘recommendation’ from a govt owned incubator centre or from an incubator of a govt recognized post-graduate institution. This again might lead to unwanted layer of bureaucracy which may go against the very essence of setting up this initiative. the govt. involvement should be minimal.
- Startup companies from all streams / industries (be it manufacturing , service sector or agriculture) ought to be encourage, not simply technology-based firms.
- Start-up India is in-line with the PM’s call for innovation i.e., Digital India. The Start-up India Action plan is a smart start to this. Let’s hope this initiative is implemented in true spirit and brings revolution among the youth of India, making them job-seekers to job-creators.
What may well be the implementation challenges for ‘Startup India’ scheme? can this scheme be beneficial? Kindly share your views on ‘Startup India’ initiative.