It has all the makings of a new dawn for India’s economic renaissance, with Prime Minister Modi launching the Start-up India initiative and unveiling the fund of around $1.5 billion to boost new age entrepreneurs.
The atmosphere was surcharged with optimism and energy at Vigyan Bhavan, the premier convention hall in the Indian capital on January 16, with start-up satraps and aspiring entrepreneurs hanging on to every word of India’s reform-minded prime minister. Mr Modi didn’t disappoint them: amid a blitz of selfies, he announced a 19-point action plan which includes a ‘fund of funds’ for Rs 10,000 crore and a three year tax- holiday, seminal steps that are expected to fire up the booming start up sector in India.
With many young Indians aspiring to become entrepreneurs riding on the back of a tech boom, the action plan lays out a roadmap to leverage their huge potential to transform India. The ‘Start up India’ event was attended by star entrepreneurs and investors, including Masayoshi Son of Japan’s Softbank, Travis Kalanick, founder Uber and Adam Neumann founder of WeWork. Flipkart’s Sachin Bansal, Snapdeal’s Kunal Bahl and Zomato’s Deepinder Goyal looked effervescent as they doled out advise to would-be entrepreneurs.
Cheering potential and existing start ups, Mr Modi vowed to simplify the registration process, announcing a self-certification scheme related to nine labour and environment laws and said there would be no inspection during the first three years of a venture. Announcing reforms in the patent regimes, Mr Modi said the government would ensure faster registration of patents by start-ups. He also promised to bring a new scheme to protect Intellectual Property Rights.
Energy, enthusiasm and enterprise
Speaking about the dynamism of young entrepreneurs, Mr Modi elaborated on why start ups are as much about adventure as it is about risks and the role of technology and innovation. “Start up India movement reflects the new India, driven by the energy, enthusiasm & enterprise of our youth,” Mr Modi said. He also spoke about the importance of start ups in generating employment. “Start up does not mean billion dollar company where thousands of people work. It is about employing even 5 people & developing India,” Mr Modi said.
Incentives for start-ups
Bringing clarity on which organisations would be defined as a start up under the new initiative, the new guidelines state that “any entity which has been around for less than five years and has a turnover of less than 25 crore qualifies to be defined as a start-up, provided it is working towards innovation, development, deployment or commercial of new products, process or services that are driven by technology or intellectual property.”
Companies which clear the tests conducted by a government board will be entitled to several benefits. Some of these benefits include a three year tax holiday, capital gains tax benefits, no labour law inspection for first three years, self-certification.
Shining the path ahead for national resurgence, Prime Minister Modi stressed on the importance of can-do problem-solving attitude. “Yes, we have a million problems but at the same time we have over a billion minds,” he said.
The government has also announced Rs 2000 crore credit guarantee fund to help flow of venture debt from formal banking system. It has also promised an easier exit for start ups through the new insolvency law.
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