Quick Take On Start Up India Progress
or domestic funds not registered as VC funds will now not have to worry about having to pay tax on the money invested in startups.
And, the long awaited constitutional amendment to Goods and Services Tax (GST) finally saw the light of the day. Given that the businesses in India face several hurdles in dealing with 29 states, 7 union territories and of course the central government, the uniform tax structure is definitely something to cheer about. GST is deemed to benefit the businesses of all sizes and nature, startups too can expect to look forward to better times ahead.
Fund of Funds
DD Mishra One key challenge faced by startups in India has been access to finance, and in order to provide funding support to startups, the Government has set up a fund with an initial corpus of Rs 2,500 crore and a total corpus of Rs 10,000 crore over a period four years. The Fund will be in the nature of Fund of Funds, which means that it is managed by SIDBI. The fund will invest in SEBI registered Alternative Investment Funds (AIFs) which, in turn, will invest in startups. Thus, this fund will act as an enabler to attract private capital in the form of equity and quasi-equity for startups.
In March 2016, President Pranab Mukherjee unveiled an online startup ecosystem platform called SIDBI Startup Mitra as part of an effort to scale up initiatives targeted at entrepreneurship development. The launch of the platform is in line with the objective of the government in forging innovationled growth through various measures, including start-up action plan and Atal Innovation Mission. According to SIDBI, the platform will enable entrepreneurs in the startup community to get connected with various stakeholders, namely incubators, angel investors, and venture capital funds.