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Indian Government Plans To Encourage Startups By Introducing Flexible Rules

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Government of India, over the last few months, has undoubtedly made relentless efforts to transfigure India into a digital, connected network and has received global acknowledgement for the same. As a part of this strategy, the government has decided to make some internal changes to the rules and policies, that would eventually promote flexibility in hiring norms and faster winding up of failed startups.

Along with that, the government is also planning to promote women entrepreneurs by giving preference to their enterprises in public procurement and making it easier for them to access capital.

With the changes in regulatory framework for start-ups, the government is hoping to prevent an exodus of successful ventures to foreign shores. Many successful start-ups like Flipkart, Freshdesk, Grofers, Mobikon, AdNear, etc. have moved its base to Singapore. The government will now focus on making it easier to launch, run and close a startup in India.

On the ease of starting a business, Singapore ranks 3rd while India ranks 179th. The World Bank report notes that it takes around 27 days to start a business in India, while in Singapore, it takes two and a half days. Also, there are 12 procedures that need to be completed before one can start a business in India.

Jyotsna Sitling, joint secretary in the ministry of skill development and entrepreneurship, said,

It is critical that there is some flexibility for startups in hiring and retaining employees during their first three or five years of operations. We are also pursuing easier exit for enterprises that fail to take off in their first three years of operations. We want to promote a rescue culture by revisiting bankruptcy rules as well as provide advisory services to ventures that are struggling to take off. Incentives for angel funding and venture capital units in the quasi-public sector to bring in equity funds are also on the cards.

Along with the overhaul of framework, as a part of PM’s vision of ‘Start Up India, Stand Up India’, the government will allot a unique entrepreneurship number (UEN) which can be used for completing statutory registrations and report compliance with tax and labor laws.

The government is also taking a new approach by focusing on entrepreneurship education, for which it is banking on online courses (MOOCs) and experiential learning. Government will be starting entrepreneurship courses in 3,000 colleges, which are located around 325 industrial clusters with 50 nodal entrepreneurship hubs (e-hubs) over the next five years.

Government will also set up a National Entrepreneurship Hub that would integrate the entrepreneurship initiatives of different ministries and private partners. It is also going to work on making incubators and accelerators gender-neutral, facilitating access to capital and changing public procurement norms to help enterprises.

It is also planning a web and mobile-based platform, which will connect students with network of incubators, accelerators and mentors, helping them tap other government programs for small enterprises like Atal Innovation Mission and ‘Self-Employment and Talent Utilisation’.


He has been a technology writer since more than five years. At The Tech Portal, he covers gadgets, startups and the good and bad of tech.

Email: [email protected]

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