So PM Modi’s ambitious Startup India program has kicked off and brought a whole bunch of proposals that promise to improve the country’s start-up ecosystem and make it easier for companies to open up shop — by extension, also improving the economy, job opportunities and so on. In fact, yesterday’s announcement may just have managed to pleasantly surprise even the most optimistic with some of its clauses. Lets take a look.
For one, the clause through which the profits that startups make for a period of three years from registering, are now liable for exemption from income tax. That in itself is something you would expect from a startup heaven, and i don’t even need to elaborate upon the benefits companies just stepping out into business will reap from it. The law is valid for businesses set up after April 1,2016.
What’s more, the new laws also allow companies that are just starting out, a period of grace to settle down and take their bearings.
“We will allow startups to comply with provisions on a self certification basis. Regulatory and environmental clearances that impact you would now be allowed on self certification and there will be no inspection from any inspector for three years,”
The new law also makes provisions for the quick registration of companies. The same was also stressed by the bureaucratic panel that sat earlier in the day, which talked about reducing the registration time down to one day (An app for the same will be launched on April 1 ).
The Prime minister of the country also mentioned the setting up of a startup Funds-of-fund with a corpus of Rs. 10,000 crore which would be expected to spend Rs. 2500 crore every year for the next four years.The corpus will be used to provide funding support for the development and growth of innovation driven enterprises.
PM Modi also talked about the issue of protection of intellectual property and built upon the promise of enhancement of India’s patent capabilities, that was made earlier in the day.
“We lack in the registration of patents and IP. I plan to open a facilitation centre in all major towns to facilitate and encourage IP protection free of charge. We would also provide an 80% reduction in the IP fees,”
Adding that a panel of facilitators will be there to provide assistance, legal and otherwise.
Finally, a new Insolvency and Bankruptcy Act, 2015 makes provisions so that startups can exit as gracefully as they begin. Exiting had certainly been one of the more important issues on the list of problems to be addressed and indeed was almost harder than starting a company. The new act would attempt to reduce the time taken to exit a company and bring it down to a maximum 90 days for startups with simple debt structures
“I salute the ones who have dared to start and fail and because of this it was important that we introduced the Bankruptcy Bill in the Parliament.”
The government also committed itself to the setting up of 35 new incubators in institutions and agreed to provide a funding support of 40 percent assuming that 40% of the cost will be borne by the respective state government and the remaining 20 percent by the private sector. Also, a staggering 5 lakh schools and 10 lakh students are slated to be involved in various programmes and events to foster their drive for innovation, while national as well as international startup festivals will be held for the identical purpose.
So basically, PM Modi has taken what was a broken down cobble road to startup and converted it into a 4-lane highway — and hung a welcome banner over it too. The improved environment is sure to generate more and more excitement both for those contemplating doing their own thing and also for investors — from the country and abroad — thinking about putting in their money, as they see the prospect of profit from their investments rise.
All in all, the day heralded what may just be the beginning of a new era for the Indian startup ecosystem. The plan was greeted by much enthusiasm from the gathered audience which included some of the top names from the start-up community.
Well, Acche-din may just have come significantly closer with PM Modi’s startup action plan.