Historic Startup Action Plan....
Prime Minister Narendra Modi
launched a number of initiatives on Saturday to support the country's
start-ups, including a 100 billion rupee ($1.5 billion) fund and a
string of tax breaks for both the companies and their investors.
India, which already has a handful of new generation success
stories, is seeking to encourage more cutting edge technology and other
start-ups - supporting new businesses in a country which badly needs to
accelerate a still sluggish economic recovery and create millions of
jobs as the workforce expands.
Modi's high-profile event in New
Delhi - attended by hundreds of investors and entrepreneurs, including
the founder of taxi-hailing app Uber, Travis Kalanick - promised a shot
in the arm for the sector, with exemptions from tax and compliance
inspections for three years.
"I urge all entrepreneurs to create companies that solve India's
problems and create jobs," he told a packed auditorium in New Delhi,
speaking in Hindi.
"Start-up does not mean a billion dollar
company where thousands of people work. It is about employing even 5
people, and developing India."
Online companies such as e-commerce
marketplaces Flipkart and Snapdeal, along with ride-sharing company
Ola, have highlighted the potential for home-grown technology successes
in a country best known for capitalising on cheap engineering talent as
the world's back office.
However, the push by Modi's government is
the first time Indian policymakers have announced a set of policies
directly aimed at promoting start-ups and entrepreneurship.
Modi
said on Saturday start-up companies would benefit from cheaper and
faster patent applications, enjoying 80 percent rebates on the cost of
patents. A mobile app would allow companies to be set up within a day,
he promised.
Moreover, they will be exempt from income tax for the
first three years in which they make a profit. Their investors could
also benefit: recognised funds of funds could see exemptions from
capital gains tax, Modi said.
The announcements, at a
government-organised conference on start-ups in New Delhi, comes months
after Modi made a whirlwind tour of Silicon Valley, meeting the chief
executives of Facebook Inc, Google Inc and Apple Inc.
India, with a
rapidly expanding population of Internet users, is seen as one of the
world's fastest growing start-up hotspots. Venture capital funds
including Sequoia and Tiger Global have raised multi-billion dollar
funds for their Indian investments in recent years.
Here are top points in startup action plan
1) No Income Tax for 3 years Start-ups will be exempted from paying income tax on their income for the first 3 years.
2) No Capital Gains Tax Capital gain tax exemptions will be provided to startups.
3)Faster patent registration
PM announced simplifying IPR (Intellectual Property Regime) for
start-ups and 80% reduction in patent fees. There will be a panel of
legal facilitators for startups to file IP (patents, designs,
trademarks), and all the costs will be borne by the government.
4) Easier government procurement policy 5) Clear Exit policy
Startups will be able to exit within 90 days as per the provisions
already tabled in the Parliament via the new bankruptcy bill.
6) New Rs 10,000 cr dedicated fund It will start with 2,500 crore and a dedicated fund of Rs 10,000 crore will be created for funding of start-ups.
7) Credit guarantee scheme
Credit guarantee scheme will be introduced for start-ups in the next 4
years, funds of around 500 crores will be given every year
8) No inspection of startups for 3 years
No inspection for 3 years of start-up businesses in respect of labour,
environment law compliance post self-certification. Thereafter, they
will get exemption on the basis of their experience and turnover.
9) Compliance regime based on self-certification and One-page registration form
One page registration form can be available on smartphone via an app.
Mobile app will be launched on April 1. Registration of startup company
can be done in one day!
10) New innovation centres will come up
Atal Innovation mission will give encouragement to state-of-the-art
innovation centres. 31 innovation centres at national institutes, 7 new
research parks like IIT-M and 5 new bio-clusters will come up.
11) New women entrepreneur-centric policies New women entrepreneur centric policies will be announced to promote more and more women in setting up businesses.
