`100-bn fund, tax sops to boost Start-Up India
RED CARPET Modi and Jaitley promise several entrepreneur-friendly measures
NEW DELHI: Prime Minister Modi announced on Saturday a string of initiatives to support the country’s start-ups, including three years of tax and compliance breaks aimed at cutting onerous government regulations and red tape.
Modi also reiterated plans to set up a Rs10,000 crore start-up fund, first announced by finance minister Arun Jaitley in the interim budget of 2014-15. He also said start-ups would benefit from cheaper and faster patent applications, a capital gains waiver if the money is reinvested in a similar venture, as well as easier exit for failed projects.
While the announcements will likely help improve the environment for start-ups in India, it wasn’t immediately clear how measures such as three-year tax breaks could help small-bore, innovative ventures that struggle for years to break even.
Modi’s speech was made in the presence of some of the biggest names in Indian and global startups who gathered in New Delhi for the launch of one of Modi’s flagship projects – “Start-up India, Stand-up India”. “People who have achieved success are not just entrepreneurs but also adventurous. Success of entrepreneurs depends on their ability to take risk,” he said.
“That’s how [taxi aggregator] Uber became [god of wealth] Kuber,” Modi said to peals of laughter from the audience.
India is home to the third-largest number of technology start-ups after the United States and Britain, and they attract billions of dollars in funding every year, despite crippling government regulation and red tape – a hurdle Modi referred to in his speech. “A lot can happen if the government did not meddle. We are here so that you can tell us what we should not do,” he said.
Modi said the government would make it easier for founders to exit their companies, responding to concerns that though it is difficult to start a company in India, it is almost impossible to shut one down.
THE ACTION PLAN
No tax on profits and no inspections for 3 years
Fund with Rs10,000 crore corpus
No capital gains if money invested in another start-up
Easy exit policy
Self certification-based compliance for labour and environment laws
Single-point Start-Up India hub for clearances
Mobile app, portal for registrations
Handholding, with government acting as a friend and colleague
New intellectual property rights
HERE’S WHAT START-UP BUSINESSES CAN LOOK FORWARD TO protection, 80% reduction in patent fee
Encourage start-ups in govt purchases, with relief in experience and turnover criteria
Credit guarantee scheme
Special scheme for women entrepreneurs
Support to biotechnology start-ups
Programme to encourage innovation among students in 500,000 schools.