18 Jan 2016, 08:03 — 6 min read
The much-awaited launch of Start Up India, Stand Up India, a government of India initiative to promote entrepreneurship in the country, brought cheer to a number of budding entrepreneurs and startups. Most importantly, it will help correctly position these new generation businesses as game changers, which will take India to the resurgent position it deserves in the world economy.
But the cheer can spread to the wider business community, including to established Small & Medium Enterprises, which will gain from the ripple effect this will most certainly create. Even as Prime Minister Narendra Modi appreciated the adventurous spirit of the new generation entrepreneurs, he motivated them to use their spirit of innovation, including beyond technology led initiatives where necessary, to build innovative solutions to the problems that plague the common Indian.
In his speech at Vigyan Bhavan, PM Modi urged startups to focus on maximising the farmers’ produce, make healthcare affordable, take quality education to remote areas, design apps for trading handicrafts or work on enhancing cyber security.
On this #EntrepreneurMonday we bring to you highlights of this initiative and urge us all to think of ways in which we can have our businesses gain from the likely energy and spirit this Action Plan will create:
1. Compliance Regime Based On Self-certification: PM Modi said that a self-certification based compliance system for startups would be introduced for nine labour and environment laws. No inspection will be done for three years of startup businesses in respect of labour, environment law compliance post self-certification.
2. Rs 10,000 Crore Fund: A dedicated startup fund will be created for funding of startups with an initial corpus of Rs 2,500 crore and a total corpus of Rs 10,000 crore over a period of four years.
3. Simplifying The Startup Process: The registration process for startups has been a tough road until now. PM Modi spoke on simplifying the process wherein a startup will now be able to set up by just filling up a short form through a mobile app and an online portal that will be launched in April this year.
4. Income Tax Exemption Up To 3 Years: Startups will be exempted from paying income tax on profits for the first three years.
5. Exemption From Capital Gains Tax: Startups will be exempt from capital gains tax. The exemptions will be given in case capital gains are invested in the fund of funds recognised by the government. In addition, existing capital gain tax exemption for investment in newly formed MSMEs by individuals will be extended to all startups.
6. 80% Reduction in Patent Application Fees: In order to enable startups to reduce costs in their formative years, PM Modi announced a reduction in Patent Application fees by 80%.
7. Patent Protection: Intellectual property rights and patent protection too was on PM Modi’s action plan as he announced a transparent IPR procedure for startups. Patent applications of startups will be fast tracked. Pro-bono facilitation will also be provided for legal support and assistance in filing of patent application. The government will bear the entire fees of the facilitators for any number of patents, trademarks or designs that startups may file.
8. Faster Exit: PM Modi spoke on making the exit procedure easier for startups, for which the provision for fast-tracking closure of businesses has been included in ‘The Insolvency and Bankruptcy Bill 2015’.
9. Credit Guarantee Fund: To promote entrepreneurship through credit to innovators across all sections of society, credit guarantee mechanism through National Credit Guarantee Trust Company/SIDBI will be rolled out with an amount of Rs 500 crore per year for the next four years.
10. Tax Exemption On Investments Above Fair Market Value: Investments made by incubators above FMV will also be exempted.
Prime Minister Modi also announced the launch of Atal Innovation Mission, which will promote innovation and entrepreneurship apart from organising annual startup fest for showcasing innovations and providing a collaboration platform.
The Start Up India, Stand Up India initiative has kicked off to a great start, with the government working towards offering startups and entrepreneurs an environment conducive to their business growth. The announcements of Saturday present a number of opportunities for us all – either as direct beneficiaries (if we are eligible startups) or as those that can benefit from new clients, suppliers or partnership opportunities from emerging enterprises, as a consequence of this movement. Also, a robust and energetic business environment will provide us all the opportunity to continue dreaming big and working towards solving that core consumer or business need that will drive increased value for us and our teams.
How do you see Start Up India, Stand Up India benefiting your business and what in your view should established SMEs do to gain from the overall environment and change this will likely create?
Posted byGlobalLinker Staff
We are a team of experienced industry professionals committed to sharing our knowledge and skills with small & medium enterprises.
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