The Government of India initiated this campaign “Start-Up India” on 16th January 2016. This campaign was initially announced by Prime Minister, Mr. Narendra Modi during his presence at Red Fort, New Delhi on 15 August 2015. This action aims at following three objectives:
- Simplification and Handholding
- Funding Support and Incentives
- Industry-Academia Partnership and Incubation
It also aims to discard restrictive States Government Policies within this realm, such as License Raj, Land Permissions, Environmental Clearances and Foreign Investment Proposals. Various benefits are given to entrepreneurs establishing startups under this scheme.
India is a country of opportunities and this campaign has added to this domain. The sole motive is to promote growth and help Indian Economy to rise by giving opportunity to innovation and design to come up like phoenix.
- Hassle free registration process: Interested parties in setting up a startup can easily get their registration done via the website or the mobile app launched by GOI for this purpose. There is a simple form available on website with which certain documents would be required to be uploaded.
- Legal Support and Fast-tracking Patent Examination with Cost efficiency: List of facilitators of patents and trademarks are provided to interested parties in order to render them with high quality Intellectual Property Right Services which also includes fast examination of patents at lower fees. The GOI bears all facilitator fees and the startup has to only bear the statutory fees with benefit of 80% reduction in cost of filing patents.
- Easy Funds accessibility: The GOI has set 10,000 crore rupees funds for start-ups as venture capital. It is also giving guarantee to the lenders to encourage banks and other financial institutions for providing venture capital to the start-ups.
- Tax Exemption for 3 Years: The Start-ups will be exempted from paying income tax for 3 years along with that a certification from Inter-Ministerial Board.
- Faster Exit: In case of exit, a startup can close its business within 90 days from the date of application of winding up.
- Tax Exemption on Capital Gains: The investors investing in the venture fund setup by GOI will get tax exemption from capital gains.
- Tax Exemption on investments above Fair Market Value: Under The Income Tax Act, 1961, where a Startup (company) receives any consideration for issue of shares which exceeds the Fair Market Value (FMV) of such shares, such excess consideration is taxable in the hands of recipient as Income from Other Sources but under this scheme, investment by venture capital funds in Startups is exempted from operations of this provision. The same shall be extended to investment made by incubators in the Startup too.
- Showcase of innovation via organization of Startup Fests and providing a Collaboration Platform: These Startup fests would provide a platform to them in India to showcase their ideas, works and innovations with a larger audience comprising of potential investors, mentors and fellow Startups. It is a huge opportunity for interested parties.
- Launch of Atal Innovation Mission (AIM) with Self- Employment and talent Utilization (SETU) Program: This scheme serves as a platform for promotion of world-class Innovation Hubs, Startup businesses, Grand Challenges and other self-employment activities, particularly in technology driven areas. The Atal Innovation Mission (AIM) has two core functions: • Entrepreneurship promotion through Self-Employment and Talent Utilization (SETU), wherein innovators would be supported and mentored willbecome successful entrepreneurs • Innovation promotion will provide a platform where innovative ideas are generated.
- Research & Development facilities: Seven new Research Parks will be set up to provide facilities to startups by this scheme.
- Relaxed norms for Application of Government tenders: Startups can apply for government tenders and they are exempted from the prior experience/turnover criteria which is applicable to normal companies responding to government tenders.