New Delhi, January 17 2016: Prime Minister, Narendra Modi, launched the Start-up India initiative , here last night. The launch was preceded by a day-long workshop on various aspects of entrepreneurship.
He said successful start-ups are usually created by those who are driven by an idea, or an urge to solve a problem that people face. He said making money is not the primary objective, but is often a by-product. He said Start-up innovators are often driven by a sense of compassion for others. If a Start-up can offer employment to even five people, it would be doing a great service to the nation. He mentioned some areas where youth innovators should focus, including crop wastage, and cyber security. "We have to combine IP(intellectual property) and YP(youth property)" , the PM said.
"“When I was listening to Ritesh Agarwal, I wondered, as a tea-seller why didn’t I think of a hotel chain,” he said. Agarwal is founder of the cheap hotel rooms startup, OYO Rooms.
The Prime Minister unveiled the highlights of the Start-up Action Plan. He said a dedicated Start-up fund worth Rs. 10,000 crore will be created for funding of Start-ups. Start-ups will be exempted from paying income tax on their profit for the first three years. He said the Government is working on a simple exit policy for Start-ups. He also said the Government is working towards fast-tracking of Start-up patent applications. He announced an eighty percent exemption in patent fee for Start-up businesses, and said a self-certification based compliance system for Start-ups would be introduced for 9 labour and environment laws. He said the Atal Innovation Mission will be launched to give a boost to innovation
He also announced a mobile app to be from April 2016, to l ensure that startup companies/partnerships are registered in one day.
"When I say Startup India, I mean Stand Up India as well....
The first and foremost thought is that government shouldn’t come in the way
( of startups)". Primie Minister Narendra Modi.
Read reaction of startups here
Travis Kalanick, founder, Uber, Masayoshi Son, founder and CEO, Softbank, Kunal Bahl, founder Snapdeal , Vijay Shekhar Sharma, founder, Paytm and heads of InMobi and Practo were on stage with the Prime Minister during the announcements. “This is policy on steroids", said Sharma.
Key elements of the new startup policy:
- Introduction of compliance regime based on self-certification
- The government would allow start-ups to realise the value of their intellectual property rights (IPR) at the earliest possible, patent applications of the start-ups will be fast tracked for examination and disposal
- Faster exits for start-ups
- Tax exemption to start-ups for 3 years
Start-ups set up after April 1, 2016, shall be exempted from income-tax for a period of three years
- Tax exemption on investments above fair market value
Exemption would be available to venture capital funds to invest in start-ups above fair market value (FMV). It would also include investments made by incubators above FMV
- Tax exemption on capital gains
Tax on long-term capital gains in unlisted entities would be cut from present rate up to 20 percent
- Starting a start-up in a day through mobile app
A panel to aid start-ups with legal support and assistance in filing of patent application
Government appointed facilitators shall help start-ups in filing and disposal of patent applications
The govt would bear the cost of it
- Norms of public procurement for start-ups to be relaxed
Public sector units would give start-ups preference.
- 80 percent rebate on filing patent applications by start-ups
- Start-up India Hub
An entire start-up ecosystem that would be a set-up and a friend, mentor and guide for start-ups through their entire journey
- Setting up of 7 new research parks with an initial investment of Rs 100 crore each modeled on the research park at IIT-Madras
- 35 new incubators in institutions
- Launch of Atal Innovation Mission– Entrepreneurship promotion
- Innovation promotion: Institution of innovation awards: 3 per state/UT and 3 national level
- Credit guarantee fund for start-ups through National Credit Guarantee Trust Company and SIDBI to be rolled out with a budgetary corpus of Rs 500 crore per year for the next four years.
- Funding support through fund of funds with a corpus of Rs 10,000 crore
The government to set up a fund with an initial corpus of Rs 2500 crore and a total corpus of Rs 10000 crore over a period of four years