`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.

PM Narendra Modi on Saturday. MOHD ZAKIR/HT 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...