Start- Up India

Sandarbha Desk
Sandarbha Desk

TOPIC: Indian Economy and Up India issues relating to planning, mobilization of resources, growth, development and employment; Inclusive growth and issues arising from it; Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and bodies constituted for the protection and betterment of these vulnerable sections

  • This initiative aims at fostering entrepreneurship and promoting innovation by creating an ecosystem that is conducive for growth of Start-ups.
  • The objective is that India must become a nation of job creators instead of being a nation of job seekers.

Salient Features of the Scheme are:

Simplification and Handholding ( Up India ) 

  • A self-certification based compliance system for Start-ups would be introduced for 9 labor and environment laws.
  • Launch of mobile app and portal for compliance and information exchange.
  • Start Up India hub to handhold start ups during various phases of their development.
  • Legal support to start ups.
  • The Government will work towards fast tracking of their patent applications.
  • An 80 % exemption in patent fee for Start-up businesses.
  • The Government is also working on a simple exit policy for Start-ups.
  • Relaxed norms of public procurement for startups.

Funding support and incentives

  • A dedicated Start-up fund (Fund of Funds) worth Rs. 10,000 crore will be created for funding of Start-ups. It will be managed by SIDBI.
  • The Fund will invest in SEBI registered Alternative Investment Funds (AIFs), which, in turn, will invest in Startups. It will act as an enabler to attract private capital in the form of equity, quasi-equity, soft loans and other risk capital for Startups.
  • The fund will facilitate large scale job creation.
  • Tax exemption on capital gains invested in Fund of Funds.
  • The Start-ups will be exempted from paying income tax on their profit for the first three years.
  • Credit guarantee funds for startups.

Industry- Academia Partnership and Incubation

  • Organizing Startup fests to showcase innovations and providing collaboration platforms.
  • Launch of Atal Innovation Mission (AIM) with Self-Employment and Talent Utilization (SETU) Program of Niti Aayog.
  • Harnessing private sector expertise for setting up incubators.
  • Setting up of 7 new research parks modeled on the Research Park at IIT Madras.
  • Launching of innovation focused programs for students.
  • Annual Incubator Grand Challenge to promote good practices among incubators.

Credit Guarantee Fund

  • It will be created for startups through National Guarantee Trust Company (NCGTC)/SIDBI with a corpus of Rs. 500 crore per year for the next four years.

Eligibility Criteria

  • Firms setup in the past 5 years with an annual turnover below Rs. 25 crore, working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property will be eligible.
  • The mere act of developing products or services that do not have potential for commercialization or have no or limited incremental value for customers will not be eligible.
  • To fall under the category of a Startup, the firm cannot be formed by splitting up, or reconstruction, of a business already in existence.
  • The entity has to be registered as a Private Limited Company (under the Companies Act, 2013) or a Registered Partnership Firm (under the Indian Partnership Act, 1932) or Limited Liability Partnership ( under the Limited Liability Partnership Act, 2008).
  • The entity should be supported by one of the following:
  1. A recommendation (with regard to innovative nature of business), in a format specified by DIPP, from an Incubator established in a post-graduate college in India.
  2. An Incubator which is funded (in relation to the project) Up India for GoI as part of any specified scheme to promote innovation.
  3. A recommendation (with regard to innovative nature of business), in a format specified by DIPP, from an Incubator recognized by GoI.
  • It will also be eligible if it is funded by an Incubation Fund/ Angel Fund/ Private Equity Fund/ Accelerator/ Angel Network duly registered with SEBI that endorses innovative nature of the business.
  • If Centre is part of any specified scheme to promote innovation.
  • Another way to be within the category is to have a patent granted by the Indian Patent and Trademark Office in areas affiliated with the nature of business being promoted.

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