Startup India: (Reality check) Beginning of start-ups boom?

PM Modi announced the action plan of his government to Youngsters willing to be an entrepreneur. Plan was launched with big announcements and enthusiasm. He fulfilled his promise of simplifying process of taxpaying to inspire start-ups.

Biggest Announcements for Start-up ecosystem were:

1.       Special Fund

PM announced that Govt. will set up initial corpus of ₹ 2,500 crore and total fund of ₹ 10,000 crore for four years. This fund is to be managed by a board with eminent professionals from successful start-ups and industrial bodies. Fund will be invested in sectors like health, Education, Manufacturing and Agriculture.

2.       Single point Registration

On April 1, government will launch a mobile app for start-ups to register company in one day. This portal will be hub for contact for approvals and registrations, and for schemes under Startup India Action Plan.

3.       TAX Exemption for three years

Startups will be exempted from income-tax for consecutive three years on establishment. Also capital gains invested in SEBI registered venture funds will also be exempted from tax.

4.       Fast track patent filing applications

Central Government will bear the cost of patents, designs and trademarks for start-ups, with 80% rebate. Government is intended to increase Intellectual Property creation and Protection.

5.       Collaboration Hub

Startup India hub will be formed which will assist start-ups in financial organization. This Hub will arrange mentorship programs to encourage youngsters for knowledge exchange.

6.       Credit guarantee fund

To rise debt funding for start-ups through SIDBI/ National credit guarantee Trust Company

this credit Guarantee mechanism will help.

7.       Faster exit for startups

As per Insolvency and Bankruptcy Bill 2015, voluntary closure of businesses is allowed. Startups are allowed to exit within period of 90 days from making an application for winding up.

8.       An annual incubator grand challenge

Each year Government will identify top incubators based on KPIs (KEY PERFORMANCE INDICATORS). Government will give them ₹ 10 crore each as financial assistance to develop their infrastructure.