India will do anything to ensure world's best start-up ecosystem

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Saurabh Gupta | 23 Jul, 2016
Commerce and Industry Minister, Nirmala Sitharaman has said that the government will do whatever it takes to ensure that world's best start-up ecosystem is in India.

Speaking at the first conference of states organized by the DIPP in New Delhi on Saturday, Sitharaman said, "We are taking feedback from all these key stakeholders of the startup ecosystem, government will facilitate and do whatever it takes to ensure that world's best startup ecosystem is in India."

"I invite all of you to join this movement and let your suggestions keep pouring in," she added.

"Startup India initiative is designed to foster innovation, create jobs and facilitate investment. Government is committed to make this initiative a scalable reality and to provide an environment for our Startups to thrive in," Sitharaman addressed the seminar on start-ups.

She said, "India is buzzing with entrepreneurial activity like never before and is at the forefront of an entrepreneurial revolution."

India has been pegged at 3rd place behind USA and UK in terms of the number of Startups. Close to 4,400 technology startups exist in India and the number is expected to reach 12,000+ by 2020, driven by a young and diverse entrepreneurial ecosystem.

India is the world's youngest startup nation with 72 percent founders less than 35 years and remarkably innovative ventures are making a mark in India.

She said, "These numbers are indicative of the positive entrepreneurial temperament of India. This is not only today's reality but is indeed, a fantastic opportunity."

"Startups are the next big economic force in India. Through the Start-up India initiative, we want to ensure that the momentum is accelerated. We are determined to make it a startup revolution and to ensure that every aspiring entrepreneur is able to achieve his/her potential."

The government has operationalised the Startup India Hub on 1st April 2016 to resolve queries and to provide handholding support to Startups. The hub has been able to resolve more than 13,500 queries received from Startups through telephone, email and Twitter.

Government has have also recognized the need of incentivizing innovative startups because we are aware that they are the engines of growth.

The Finance Act, 2016 has made provision for Startups to get income tax exemption for 3 years in a block of 5 years, if they are incorporated between 1st April 2016 and 31st March 2019. Tax exemption on investments above Fair Market Value have also been introduced for investments made in Startups.

"To avail these benefits one must get a Certificate of Eligibility from the Inter-Ministerial Board of DIPP," she said.

The minister also said, funding is perhaps the most important input because from day one any entrepreneur will need funds to develop his ideas and give it a concrete shape.

"A 'fund of funds' of Rs.10,000 crores for Startups has been established which is managed by SIDBI. The fund will invest in SEBI registered Alternative Investment Funds (AIFs) which, in turn, will invest in Startups."

Thus, this fund acts as an enabler to attract private capital in the form of equity, quasi-equity, soft loans and other risk capital for Startups, said Sitharaman.

Startups working in areas covered under the list of 36 "white" category industries have been exempted from all the applicable compliances under 3 Environment Laws viz. the Water (Prevention & Control of Pollution) Act, 1974; the Water (Prevention & Control of Pollution) Cess (Amendment) Act, 2003 and the Air (Prevention & Control of Pollution) Act, 1981.

Startups also need to be assisted during that stage when they are scaling up and trying to venture into new markets. To that end, we have made provision for relaxed norms on prior experience and turnover for public procurement for micro and small enterprises in the Procurement Policy of Ministry of MSME, added Commerce Minister.

A panel of facilitators has been constituted for providing assistance and support in filing applications for Intellectual Property Rights (IPR), wherein, DIPP would bear the facilitation cost.

In order to avail IPR-related benefits, rebate in fee upto 80 percent and free of cost facilitation in filing IPR applications, a Startup would now be required to obtain only a Certificate of Recognition from DIPP and would not be required to be examined by the Inter-Ministerial Board, as was being done earlier.

"These new reforms, I believe, will lead to a paradigm shift in the way investors - nationally and globally will look at India's business environment," she added.