As a small business owner, the announcement of the Startup India program by Prime Minister Narendra Modi must have got you excited. India has over 19,000 startups and 8 Indian startups that belong to Unicorn Club (ventures that are valued at $1 billion and upwards). Therefore, it is important for the Central Government to provide a solid foundation that lays the groundwork for the millions that dream to make a name for themselves both domestically and abroad.
On January 16, 2016, Prime Minister Modi announced the initiative for the startups creating a sustainable structure and enabling small businesses to stay competitive and relevant. With startup festivals, incubator challenges, an Rs. 10,000 crore startup corpus and a 3-year tax exemption, startups are provided a support system that is a step in the right direction.
Here is the breakdown of the Startup India Programme:
- Startups can now showcase their products at National and International Startup Festivals to gain visibility. There will be several innovation core programs for students in 5 lakh schools.
- An Annual Incubator Grand Challenge to develop world-class incubators will be introduced.
- A PPP model is being reviewed for 35 new incubators; 31 innovation centers at national institutes and 7 research parks, 5 new bio-clusters.
- There would be no inspection necessary for 3 years of startup businesses in respect of labor, environment law compliance after a self-certification is complete.
- The Atal Innovation Mission will provide the much-needed boost to startups to nurture innovation and harness talent.
- There is an Income Tax exemption for startups for 3 years and there will also be a tax exemption on capital gains for startups.
- Startups are provided with a credit guarantee fund. In order to start a corpus, Rs. 2,500 crores will be sanctioned and then an additional Rs 10,000 crores.
- An 80 percent rebate in patent costs has been allowed. Startups will be provided with faster exit terms. Norms will be relaxed for the public procurement of startups.
- Startups are required to produce products with the best quality. This will enable them to have faster patent registration and protection for Intellectual Property rights with self-certification compliance by startups.
- The Startup India mobile app has been created and allows startups a platform to register their business within a day. This portal enables small businesses to apply for clearances, approvals, and registrations.
With more startups looking to slingshot their way into the international arena, the Startup India program is a game-changer for millions of Indians. This will provide the support system required for Startups to create innovative products without the risk of falling short on money.
Startups can utilize Rs. 10,000 crore credit guarantee fund and the self-registration online mechanisms to enable a focus on a hindrance-free and profit-oriented business model. In this way, the government can enable startups to function independently by following the established guidelines while building an ecosystem that will give them a chance to thrive.