STARTUP INDIA – The long and the short of it

By Published On: March 29th, 2016Categories: Articles, Featured4.4 min read
what is startup India

Empowerment. Exemptions. Assistance. What ‘Startup India’ promises the entrepreneurs of India. A take by BHIVE!

Simply put, Startup India intends to provide resolutions for India’s start-up revolution, at least on paper; with great emphasis laid on innovation and design. Anyway, here’s the long and short of it.



1. Compliance regime based on Self-Certification

Start-ups aren’t mandated to keep up with 6 labour laws covering Gratuity, PFs, Insurance, Migrant Workmen, Construction workers etc. They can self-certify and are only subjected to random inspections. Accordingly, start-ups aren’t restricted by 3 environmental laws addressing water and air pollution.

2. Startup India Hub – A single point of contact for the entire start-up ecosystem.

The government hopes to make ‘Start-up India Hub’ the missing link between entrepreneurs, start-ups and investors; a ‘hub and spoke’ model collaboration with government bodies, VCs, and financial and R&D institutions.

Start-up India Hub will focus on assisting start-ups through their lifecycle, and provide guidance and counsel to them.

3. Rolling out of Mobile App and the Portals

The government will introduce mobile apps and online portals for quick movement of paper works, registration forms etc. Start-ups will be able to live track the status of their registration forms, clearance certificates, approvals etc. Also, the chance to apply for various schemes is available under the Action Plan.

4. Legal Support and Fast-Tracking Patents

To facilitate and promote the filing of intellectual property, the government plans to put together a panel of ‘facilitators’. Start-ups will be entitled to rebates in the fee of intellectual property, reaching up to 80%.

5. Relaxed Norms of Public Procurement for Start-ups

In order to provide support to start-ups in the manufacturing sector, the government shall exempt start-ups from the criteria of ‘prior experience/turnover.’

6. Faster Exit for Startups

To make it easier for start-ups to wind up operations, provisions have been made to fast-track the closure of businesses. Start-ups will be able to wind up within a period of 90 days after filing of the application, and an insolvency professional shall be appointed for the startup during the closure period.


1. Providing Financial Support

To support start-ups, the government has allotted initial funds worth INR 25 billion and a total of INR 100 billion over four years. These funds will not be directly invested into start-ups but will participate in Venture Funds. They will be called funds of funds and shall be managed by a board. Also, LIC shall be a co-investor in the funds of funds.

2. Credit Guarantee Fund for Start-ups

To encourage entrepreneurship, the government will encourage lenders and banks to provide Venture Debt rather than Debt funding for it’s perceived as a high-risk area. Credit guarantees will be provided through NCGTC.

3. Tax Exemptions on Capital Gains

To promote start-up investment, exemptions will be given to those investing their capital gains in the funds of funds. Also, the capital gain tax exemption for MSME’s will be extended to all start-ups.

4. Tax Exemption to Start-ups for three years

Start-ups are free from income tax for three years of business to facilitate funds for working capital and operations.


Start-up Fests: To provide the start-up ecosystem national and international visibility, the govt. is proposing to introduce start-up fests at national and international stages. These fests will encompass exhibitions, product launches, talks and discussions, and showcasing innovations. These fests will be organized to connect investors, mentors, incubators and start-ups.

Atal Innovation Mission (AIM) has two aims: to promote entrepreneurship through self-employment and Talent Utilization, to support innovators. And become a platform where innovative ideas are generated.

Incubator Setup: The govt. plans to create the right legal environment to promote incubators across the country. This is be achieved by providing funds to incubators from central, state and private sector. Also, a grant shall be provided for incubators established in existing institutions.

Innovation Centres: The government  plans to set up and scale up centres of innovation and entrepreneurship at national institutes.

Research Parks: The government shall set up 7 new research park in certain institutions with an initial investment of INR 100 crore each.

Bio-entrepreneurship: To promote start-ups in the biotechnology sector, the department of Biotechnology will implement new Bio-clusters, Bio-Incubators, Technology Transfer Offices and Bio-Connect offices in research institutes across India. For financial assistance to young Biotech start-ups, Biotech Equity Funds will partner with National and Global Equity funds.

Innovation Focused Programmes: To promote research and innovation among young students, the govt. shall implement: Innovation core, NIDHI and Uchhattar Avishkar Yojana.

Incubator Grand Challenge: The govt. proposes to make investments towards building top-notch, well-equipped incubators. The incubators will be given INR100 million each for financial assistance to ramp up the quality of their services. The ‘Incubator Grand Challenge’ exercise shall be annually carried out for identification of these incubators.

This, in brief, is the Startup India Action Plan. While it looks rosy, hopeful and starry-eyed on paper, only time will tell if the govt. can implement it as effectively as it seems in words. Though the slogans in report provide courage: ‘Ecosystem minus the trappings of the system.’

Then again, path carved forward for start-ups is indeed wider and brighter than ever. As the slogan in the report reads: ‘No Tunnel. Only Light.’

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