Importance of innovative startups in developing a society is incomparable. Innovative startups help a nation achieve sustainable economic growth as well as large scale employment opportunities. Startup India is one such initiative by Government of India to nurture and foster entrepreneurship by providing right resources and eco-system for startups in India. In this article, we are going to give you a quick understanding of Startup India Action Plan to accelerate the Startup Movement in India.
Startup India Action Plan has 3 core pillars –
- Supporting startups with Funds
- Incubation and Industry-academia partnerships
1. Simplification and Handholding
- To help startups focus on their core business and avoid wasting time and money on regulatory formalities, the government has introduced Compliance Regime based on Self-certification. The plan is to allow startups to self-certify compliance with 9 labour and environmental laws.
- Government of India is taking steps to foster collaboration of startups with central & state govt, Indian & foreign VCs, angel networks, banks, incubators, legal partners, consultants and R&D institutions. Meeting these objectives by introducing Startup India Hubs as a single point of contact for the entire Startup Ecosystem.
- Startups can interact directly with government for all financial, legal or informational needs with one single Startup India Mobile App and Portal.
- The action plan aims to provide fast & high quality Legal & intellectual property services for startups in rebated cost.
- From April 1, 2015, Government will introduce relaxed norms of public procurement for startups which means exempt startups from ‘prior experience’ criteria while no relaxation on technical parameters. Also, the Central Government, State Government and PSUs have to mandatorily procure at least 20% from the Micro Small and Medium Enterprise (MSME).
- In case of failure, provisions are made to help startups in wrapping up and taking faster exits.
2. Funding Support to Startups
- Steps are taken to provide adequate funding support to startups not directly but through fund of funds with a corpus of 10,000 crore.
- Innovation comes with an expense of failure! To help entrepreneurs take disruptive steps, government will provide credit guarantee comfort with flow of Venture Dept from Formal Banking System.
- To help startups, attract investments and resources, there will be provisions to provide Tax exemptions on capital gains.
- Startups struggle to attain early growth because of high risk and significant capital investment. Hence, Government of India will provide tax exemptions to startups for first 3 years.
- Seed capital investment to startups is one of the most crucial stepping stone during the initial years. To promote this, there will be tax exemptions on investments above fair market value.
- Organizing Startup Fests and events to promote collaboration and showcase innovation.
- Aiming to promote entrepreneurship and innovation in Startup India Action Plan, activation of Atal Innovation Mission (AIM) with Self-Employment and Talent Utilization (SETU) Program.
- Furthermore, setting up of incubators across the country with government partnering with private companies to ensure professional management.
- 31 innovation centers in National Institutes to augment Research & Development with Incubation.
- 7 new Research Parks in Indian Institutes with initial investment of 100 crore on each center. While each center is modeled based on Research Park in IIT Madras.
- Promotion of Bio-entrepreneurship by nurturing 300-500 Biotechnology startups every year. Aiming to have around 2,000 startups by the end of year 2020.
- Foster innovation and entrepreneurship in science and technology field by launching innovation centered programs for students.
- Finally, Bringing top incubators across the country to the surface by introducing ‘Incubator Grand Challenge‘.
In conclusion, Startup India Action Plan looks promising and well-planned initiative by the Government of India. Encouraging entrepreneurship and providing resources, funds and limelight for innovative startups is the need of the hour. Learn more details about Startup India Standup India Initiative here