The much awaited startup India event by the Indian government took place today. A series of stimulating sessions and talks by the most imminent startup founders from India and the likes of Uber founder Travis Kalanick and Softbank CEO Masayoshi Son were had. Indian prime minister Narendra Modi, who spearheaded the event, finally laid down the main agenda for startups in India.
Beginning his speech with a light hearted quip about it being a holiday for the government, especially “after 6pm”, Modi set the ball rolling for a series of highly- anticipated announcements of policies and initiatives to aid innovation and boost startups in India.
Here are the major announcements made by Modi.
1. Financial boost to startups
The government will set up a corpus of ₹10,000 crores – to provide funding support for development and growth of innovation driven enterprises, Government will set up a fund with an initial corpus of ₹2500cs and a total corpus of ₹10,000 cr over a period of 4 years.
2. Faster exit plan for startups
Lamenting the current lack of exit options for startups, Modi expressed his thoughts about failure being a part and parcel of entrepreneurship and supporting entrepreneurs with faster exits. To make it easier for startups to exit, provision for fast-tracking closure of businesses have been included in ‘The insolvency and Bankrupcy Bill 2015. Startups with simple debt structures may be wound up within a period of 90 days from making of an application for winding up on a fast-track basis.
4. Taxation relaxation
In a bold move, capital gains from startups to not be taxed for 3 years. Investments in startups to not be taxed above fair market value.
5. Self- certification
Underscoring the value of faster setting up of business, businesses to be allowed self certification of compliance with labor and environment laws, in a display of trust. In case of labor laws, no inspection will be conducted for three years. In case of environment laws, startups under ‘white’ category would be able to self certify compliance.
6. Ease of patents
Patents are a key to encouraging innovation. To enable startups to reduce costs in their crucial formative years, startups shall be provided an 80% rebate in filing patents vis-a-vis other companies. Legal help would be provided to aid faster patent filing.
7. Mobile app for one day registeration for startups
To serve as the single platform for information exchange and interacting with government and regulatory institutions, a mobile app shall be available from April 2016. This will ensure that startup companies/partnerships are registered in one day.
8. Encouraging innovation at schools
Modi believes that innovation starts early and even school kids can come up with various ideas that can be enoucraged, polished and harnessed. Towards this end, various startup innovation programmes would be launched across 5,00,000 schools in India.
9. Set up research centre
7 new research centres amounting to Rs. 100 crore each would be set up at 6 IITs and IISc (Indian School Of Science, Bangalore) to aid innovation. The parks shall enable companies with a research focus to set up base and leverage of the expertise of academic/research institutions.
10. Encouraging women entrepreneurs
Modi who mingled with a few women entrepreneurs before the event, announced a plan of encouraging women entrepreneurships in the country and schemes for the same to be launched soon.
11. Relaxed rules for procurement for startups
To provide an equal platform to startups vis-a-vis the experienced startups/ companies in public procurement, startups(in the manufacturing sector) shall be exempted from the criteria of prior ‘experience/turnover’ without any relaxation in quality standards or technical paramaters.
12. Launch of Atal Innovation Mission (AIM)
Entrepreneurship would be promoted with various initiatives like:
-Establishment of sector specific incubation centres
-Establishment of 500 Tinkering Labs with 3D printers in universities
– Pre-incubation training to potential entrepreneurs
– Strengthening of existing incubation facilities
– Seed funding to high growth startups.