In 2016 the Prime Minister of India, Narendra Modi launched the Start-Up India program to establish an ecosystem that strengthens and encourages innovation and start-ups to generate large-scale employment and further boost the economic growth of the country. The government put forward an ‘Action Plan’ to achieve its objective.
The “action plan’ aims to give a push to the Start-Up India movement :
• From digital/ technology sector to a wide array of sectors including agriculture, manufacturing, social sector, healthcare, education, etc.;
• From existing tier 1 cities to tier 2 and tier 3 cities including semi-urban and rural areas. The Action Plan is divided across the following areas:
• Simplification and Handholding
• Funding Support and Incentives
• Industry-Academia Partnership and Incubation”
The Start-up India Action Plan defines a start-up as an entity that is incorporated or registered in India not more than five years before 2016, has an annual turnover not exceeding INR 25 crores in the preceding financial year, and works in the field of innovation, development, and commercialization of new products, processes or services driven by technology or intellectual property. Also, such an entity should not be formed either by splitting up, or reconstructing, a business that is already in existence.
The scheme was launched to help start-up businesses by reducing the regulatory burden on them, thereby allowing them to focus on their core business and keep compliance costs low. The objective of the scheme was formulated by recognizing the fact that many new start-up businesses are unaware of the regulatory rules and regulations that have to be adhered to be and complied with. For example, there are many labour laws and environmental laws that need to be followed, making the initial process of setting up a business a very cumbersome and complex task. It also seeks to create a sturdy mechanism of innovations and experiments. At the same time, it wants to create a nation full of job givers in place of job lookers.
Benefits of the scheme:
The Start-Up India scheme seeks to provide several benefits to start-ups. Some of these are as follows:
- SIMPLE PROCESS – To ease the difficulties faced by small businesses in getting registered under the scheme the government of India has launched a mobile app and a website for the same. Using the app/website any start-up seeking to avail benefits offered by the Start-Up India scheme can get themselves registered by simply filling up a simple form on the website and uploading certain documents. The entire process is completely online.
- COST REDUCTION – The government has provided a list of facilitators of patents and trademarks. These contacts provide high-quality IPR Services including fast examination of patents at lower fees in comparison to the industry standard rates. Additionally, the government will bear all facilitator fees and the start-up will bear only the statutory fees, thereby enjoying an 80% reduction in the cost of filing patents.
- EASY ACCESS TO FUNDS – A 10,000 crore rupees fund had been set up by the government to provide funds to the start-up as venture capital. The government has also given a guarantee to the lenders to encourage banks and other financial institutions to swiftly provide venture capital to start-ups.
- TAX HOLIDAY FOR 3 YEARS – Start-ups will be exempted from income tax for 3 years provided they obtain a certification from the Inter-Ministerial Board (IMB).
- APPLY FOR TENDER – Start-ups can apply for government tenders. They are exempted from the “prior experience/turnover” criteria applicable for normal companies participating in government tenders.
- R & D FACILITIES – Seven new Research Parks have been set up to offer their facilities for start-ups in the field of R&D.
- NO TIME-CONSUMING COMPLIANCES – Various compliances have been simplified for start-ups to save time and money. For example, start-ups will be allowed to self-certify compliance (through the Start-up mobile app) with 9 labour and 3 environment laws.
- TAX SAVING FOR INVESTORS -Under section 80-IAC of the Income Tax Act, People investing their capital gains in the venture funds set up by the government will get exemption from capital gains. This will help start-ups to attract more investors.
- CHOOSE YOUR INVESTORS – Due to the scheme, the start-up will have an option to choose between the VCs, giving them the liberty to freely choose their investors.
- EASY EXIT – A start-up can close its business within 90 days from the date of applying to wind up its business.
- MEET OTHER ENTREPRENEURS – The government has proposed to hold 2 start-up fests annually both nationally and internationally with the idea to provide various stakeholders of a start-up a platform to meet. This will help people associated with start-ups a great opportunity to network.
Who all are eligible?
The eligibility criteria for registering under the Start-Up India Scheme are as follows –
- The firm has to be a private limited company or a limited liability partnership.
- The company remains a start-up for the first ten years, post the date of registration.
- The company shall remain a start-up if the turnover per year does not cross the Rs 100 crore mark in any of the 10 years. Once the company crosses the mark, it no longer remains eligible to be called a start-up. The mark of Rs 100 crore has been raised from the previous benchmark of Rs 25 crore.
- The firm should have approval from the Department of Industrial Policy and Promotion (DIPP).
- The firm should be funded by an Incubation Fund, an Angel Fund, or a Private Equity Fund.
- A patron guarantee from the Indian Patent and Trademark Office is necessary.
- A start-up must have a recommendation letter by an incubation.
- The firm must come up with innovative ideas and schemes.
- All the details regarding the funding must be registered with SEBI (Securities and Exchange Board of India).
Since its launch in 2016 the Start-up India Scheme has proved to be effective and has launched several programs to support small entrepreneurs in India. These programs are being run by a devoted Start-up India team, which submits its reports to the Department for Industrial Policy and Promotion (DPIIT).
START-UP INDIA & WOMEN ENTREPRENEURS
If we look into the current situation of women entrepreneurs specifically the ones related to Start-Up Businesses in India, we’ll notice that almost 35% of women are working as Directors in these businesses and overall women constitute 14% of all entrepreneurs in India.
Now, under the Start-Up India Scheme, “NITI Aayog has launched a Women Entrepreneurship Platform (WEP) for providing an ecosystem for budding & existing women entrepreneurs across the country. SIDBI has partnered with NITI Aayog to assist in this initiative”.
The 3 Pillars of WEP are as follows –
- Iccha Shakti represents motivating aspiring entrepreneurs to start their business
- Gyaan Shakti represents providing knowledge and ecosystem support to women entrepreneurs to help them foster entrepreneurship
- Karma Shakti represents providing hands-on support to entrepreneurs in setting up and scaling up businesses
- It provides services such as free credit ratings, mentorship, funding support to women entrepreneurs, apprenticeship and corporate partnerships;
- WEP also encourages entrepreneurs to share their entrepreneurial journeys, stories & experiences to nurture mutual learning.
- WEP is a platform for change and promotes offline initiatives and outreach programs to promote entrepreneurial spirit among potential women entrepreneurs, in collaboration with partner organizations.
- WEP offers incubation and acceleration support to women-founded / co-founded start-ups through its various partners who handhold women entrepreneurs registered with WEP and provide the necessary support to help them start and scale up.
The Start-Up Scheme introduced by the Prime Minister of India is a welcome step towards encouraging citizens of the country who wish to open their businesses, make India self-reliant, and create job opportunities for the country’s working class. The Scheme is also beneficial to create a more gender-inclusive environment and reduce gender disparity and promote sustainable growth of women entrepreneurs. However, more steps are needed to be taken to further the interest of women.
I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.
If you are interested in participating in the same, do let me know.
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