FAQ - Start-Up India Initiative
- What is Start-Up India initiative?
On 69th Independence Day of India, the Prime Minister of India Mr. Narendra Modi proposed a programme called Start-Up India to encourage entrepreneurship in the country. Later on January 16, 2016, the Government of India formally launched the Start-Up India initiative celebrating the entrepreneurship spirit of country's youth to unveil the Start-Up Action Plan.
Start-Up India programme ensures government's support to the people who want to revolutionize India's massive consumer industry with creative ideas and products promoting Make in India policy of the government. The programme will promote bank financing for start-ups in order to boost entrepreneurship and job creation.
- What's the Purpose of This Initiative?
The Start-Up India initiative aims at promoting entrepreneurship in the country by offering an enabling environment for new start-ups and entrepreneurs. The sole purpose is to transform job seekers into job creators.
- What Are the Tax Benefits for New Start-Ups Under This Scheme?
To promote growth of new start-ups, start-ups that would be set up after April, 1, 2016, will be exempted from income tax for initial three years. Besides, exemptions will also be given in case capital gains are invested in the fund of funds recognised by the government. Additionally, existing tax exemptions for Micro Small and Medium Enterprises (MSMEs) will be extended to new start-ups.
- What Kind of Legal Support Would Be Provided to The Start-Ups?
There will a panel of facilitators that would provide legal support to the start-ups and help them in filing applications related to patents, design, trademark etc. under proper Acts. The government will bear the fees of these facilitators for start-ups.
- How will It Promote Entrepreneurship in the Field of Biotechnology?
To promote entrepreneurship in biotechnology, five new bio clusters, 150 technology transfer units/offices, 20 bio-connect offices and 50 bio incubators shall be established by the government under Start-Up India scheme.
- What are the Key Announcements for Start-Ups in Star-Up India Initiative?
The highlights of the initiative are as follow:
- Self-certification compliance with labor and environment laws. There will be no labor inspection for three years.
- Single window clearance with the help of a mobile app and hence simplifying the start-up process.
- Modified and entrepreneur-friendly Bankruptcy Code to ensure 90-day exit window, in case a start-up fails.
- Promoting entrepreneurship among women and SC/ST people.
- Making Intellectual Property Rights (IPR) procedure transparent and simple for start-ups.
- Legal support to start-ups.
- 80 per cent rebate on filing patent applications by start-ups.
- To provide funding support to new enterprises the government will set up a fund with an initial amount of Rs 2,500 crore and a total corpus of Rs 10,000 crore over a period of four years.
- Exemption from capital gains for start-ups.
- Tax exemption for start-ups for initial three years.
- Government shall set-up seven new research parks: six in IITs, one in IISc with an investment of Rs 100 crore each.
- The government will also create credit guarantee scheme for start-ups through National Credit Guarantee Trust Company/SIDBI with a budget corpus of 500 crore over a period of four years.
- Under Atal Innovation Mission, pre incubation training and seeds fund will be given to new start-ups/innovations.
- What's the Funding Mechanism for New Start-Ups in This Scheme?
With an aim to promote development and innovation driven start-ups, the government will provide funding support to new enterprises and for that it will set up a fund with an initial amount of Rs 2,500 crore and a total corpus of Rs 10,000 crore over a period of four years.
- What if A Start-Up Fails? What's The Easy-Exit Policy?
In case a start-up fails, the government will assist the entrepreneurs in finding proper solutions to their problems. If they fail again, the government will also provide an easy way out as per Start-Up India programme's easy-exit policy. For this purpose, the government is working hard on the Insolvency and Bankruptcy Code 2015, which aims at providing an easy exit option for insolvent and sick companies.
- Does the Scheme Cover Small and Medium Enterprises (Smes) Also?