Start-ups are usually created by those who are driven by an idea, or an urge to

solve a problem that people face. He said making money is not the primary
objective, but is often a by-product. He said Start-up innovators are often driven by
a sense of compassion for others.

Objective of Startup India

Introduction:

To create a single point of contact for the entire Startup ecosystem and enable
knowledge exchange and access to funding

Young Indian today have the conviction to venture out on their own and a
conducive ecosystem letsthem watch their ideas come to life. In todays
environment we have more Startups and entrepreneurs than ever before and the
movement is at the cusp of a revolution. However, many Startups do not reach
their full potential due to limited guidance and access.
The Government of India has taken various measures to improve the ease of doing
business and is also building an exciting and enabling environment for these
Startups, with the launch of the Startup India movement. The Startup India
Hub will be a key stakeholder in this vibrant ecosystem and will:
Work in a hub and spoke model and collaborate with Central & State
governments, Indian and foreign VCs, angel networks, banks, incubators, legal
partners, consultants, universities and R&D institutions
Assist Startups through their lifecycle with specific focus on important aspects
like obtaining financing, feasibility testing, business structuring advisory,
enhancement of marketing skills, technology commercialization and management
evaluation
Organize mentorship programs in collaboration with government organizations,
incubation centers, educational institutions and private organizations who aspire to
foster innovation. To all young Indians who have the courage to enter an
environment of risk, the Startup India Hub will be their friend, mentor and guide to
hold their hand and walk with them through this journey.
1. Compliance regime based on self certification
The objective of compliance regime based on self certification is to reduce the
regulatory burden on startups. This self-certification will apply to laws like
payment of gratuity, contract labour, employees provident fund, water and air
pollution acts.
2. Startup India hub
A startup India hub will be created as a single point of contact for the entire startup
ecosystem to enable knowledge exchange and access to funding.
3. Simplifying the startup process
A startup will be to able to set up by just filling up a short form through a mobile
app and online portal. A mobile app will be launched on April 1 through which
startups can be registered in a day. There will also be a portal for clearances,
approvals and registrations
4. Patent protection
The government is also working on a legal support for fast-tracking patent
examination at lower costs. It will promote awareness and adoption of Intellectual
Property Rights (IPRs) by startups and help them protect and commercialise IPRs.
5. Funds of funds with a corpus of Rs 10,000 crore
In order to provide funding support to startups, the government will set up a fund
with an initial corpus of Rs 2,500 crore and a total corpus of Rs 10,000 crore over
four years. The fund would be managed by private professionals drawn from the
industry while LIC will be a co-investor in the fund. The credit guarantee fund for
start-ups would help flow of venture debt from the banking system to start-ups by
standing guarantee against risks.
6. Credit Guarantee Fund
A National Credit Guarantee Trust Company is being envisaged with a budgetary
allocation of Rs 500 crore per year for the next four years.
7. Exemption from Capital Gains Tax
Currently, investments by venture capital funds in startups are exempt from this
law. Now, the same is being extended to investments made by incubators in
startups.
8. Tax exemption for startups
Income tax exemption to startups announced for three years
9. Tax exemption on investments above Fair Market Value
10. Startup fests
Innovation core programs for students in 5 lakh schools. There will also be an
annual incubator grand challenge to create world class incubators
11. Launch of Atal Innovation Mission
Atal Innovation Mission started to give an impetus to innovation and encourage the
talent among the people
12. Setting up of 35 new incubators in institutions
PPP model being considered for 35 new incubators, 31 innovation centres at
national institutes
13. Setting up of 7 new research parks
Government shall set up seven new research parks - six in IITs, one in IISc with an
initial investment of Rs 100 crore each.
14. Promote entrepreneurship in biotechnology
Five new bio clusters, 50 new bio incubators, 150 technology transfer offices and
20 bio connect offices will be established.
15. Innovation focused programmes for students
There will be innovation core programs for students in 5 lakh schools.
16. Panel of facilitators to provide legal support and assist in filing of patent
application
17. 80 per cent rebate on filing patent applications by startups
18. Relaxed norms of public procurement for startups
19. Faster exits for startups
Achievements of 'Startup India' Action Plan

Achievements
Simplification and Hand-Holding
Compliance Regime based on Self-Certification

List of 36 industries in white category has been published on CPCBs

website. CPCB has exempted industries in white from all the applicable self-
certifications under the 3 Environment Acts listed in the Startup India Action Plan.

Ministry of Skill Development and Entrepreneurship (MSDE) has issued

advisory to allow Startups to self-certify compliance with the Apprenticeship
Rules, 1992 of Apprenticeship Act 1961

Self-Certification under six Labour Laws has also been formulated; 11

states have confirmed compliance to the advisory issued on 12.01.2016 by
Ministry of Labour and Employment (MoLE)

Startup India Hub

27000+ queries handled by the Startup India Hub.

170+ Startups have been mentored for Incubation and funding
support.

Rolling out of Mobile App and Portal

Startup India portal developed to provide access to the following:

Startup recognition.
Incubator recognition.
Advertising space for Startups.
Learning & development module.
The portal acts as a one stop solution for all queries related to the
Startup India initiative.
 Startup India mobile app developed to provide on-the-go services
and information to users.

Legal Support and Fast-tracking Patent Examination at Lower Costs

Panel of over 422 facilitators for Patent and Design and 669
facilitators for Trademarks applications.
104 applications have received rebate of up to 80% rebate on patent
fees and also received legal assistance.

Relaxed Norms of Public Procurement for Startups

Relaxed norms for public procurement for micro, small and other
enterprises have been provisioned in the Procurement Policy by the Ministry of
Micro, Small and Medium Enterprise.

Department of Expenditure and all Central Ministries /

Departments /Department of Public Enterprises/ Central Public Sector
Undertakings may relax condition of prior experience and prior turnover with
respect to MSEs in all public procurements subject to meeting of quality and
technical specifications.

Faster Exit for Startups

Provisions for Corporate Insolvency Resolution Process have been

notified on 1.12.2016.

Liquidation provisions have also been notified on 9th December 2016.

Draft rules and regulations have been uploaded on MCA website for
public comments.

Letter written to MCA to notify Startups as fast track firms.

Funding support and Incentives

Providing Funding Support through Fund of Funds (FFS) with a Corpus of
INR 10,000 crore

Rs. 500 crore has been released to SIDBI in FY16.

Rs. 129 crore has been sanctioned by SIDBI to Venture Funds.

Credit Guarantee Fund for Startups

The Credit Guarantee Scheme along with the Expenditure Finance

Committee (EFC) note is in advanced stage of finalization.

Tax Exemption on Capital Gains

Section 54 EE has been introduced under the Finance Act, 2016

which provides for exemption of capital gain arising out of transfer of long
term capital asset (not exceeding INR 50 lakhs in a financial year) invested in a
fund notified by Central Government.

Section 54GB of Income-tax Act, 1961 has been amended to

provide exemption from tax on capital gains arising out of sale of residential
house or a residential plot of land if the amount of net consideration is invested in
equity shares of eligible Startups for utilizing the same for purchase of specified
asset.

Tax Exemptions to Startups for 3 Years

Provision has been made in the Finance Act, 2016 Section 80- IAC
for Startups (Companies and LLPs) to avail income tax exemption for 3 years in
a block of 5 years, if they are incorporated between 1st April 2016 and 31st
March 2019.

In the Union Budget 2017-18, the Government has increased this

period of profit- linked deductions available to the eligible Startups to 7
years. Thus, once the Finance Bill 2017 is passed, a Startup can avail income tax
exemption for three consecutive assessment years out of seven years beginning
from the year in which such eligible start up is incorporated. This
amendment will take effect from 1st April, 2018 and will accordingly,
apply in relation to assessment year 2018-19 and subsequent years.

Tax Exemption on Investments above Fair Market Value

Removal of Angel Tax

Tax exemption on investments above Fair Market Value have been
introduced on 14 June 2016 for investments made in Startups.

Launch of Atal Innovation Mission (AIM)

Establishment of 257 Tinkering Labs has been approved.

6 existing Incubators have been sanctioned for scale-up grant by
NITI Aayog.

Building Innovation Centres at National Institutes

9 Technical Business Incubators (TBIs) have been approved.

10 Startup Centres have been funded by Ministry of Human
Resources Department.

Setting up of 7 New Research Parks Modelled on the Research Park Setup at

IIT Madras

Out of the 7 Research Parks, IIT Kharagpur already has a

functional Research Park.
The Research Park at IIT Gandhinagar is being set up by DST.

Launching of Innovation Focused Programs for Students

Ucchatar Aavishkar Yojana (UAY): INR 475 crore for 2016-18 has
been approved.
180 proposals have been received from IITs and 92 have been
recommended for approval.

Participation and Partnership

Guidelines for logo usage and financial assistance drafted.

Partnership and participation in the following events
TiE Global Summit 2016.
 Uber Exchange.
IIT Bombay E-Summit 2017.
India-Portugal Startup Summit.
Amazon Launchpad.
NextBigWhat.
Signed an MoU with Startup Portugal for leveraging the respective
ecosystems, devising joint programs and exploring academia collaborations.
Collaboration with State Governments in Startup-related events.

Other Incentives

External Commercial Borrowing (ECB) guidelines for Startups:

Startups can now borrow up to $3 million or equivalent per financial year,
either in rupees, or any convertible foreign currency or a combination of both,
for a minimum average maturity period of three years

Foreign venture capital investors (FVCI) are now allowed to invest

in Startups irrespective of any sector without the Reserve Bank of Indias
approval.

SEBI (Foreign Portfolio Investors) Regulations, 2014 have been

amended to permit FPIs to invest in unlisted Non-Convertible debentures and
securitised debt instruments

The SEBI Board has approved five key amendments to SEBI

(Alternative Investment Funds) Regulations, 2012 with respect to
Angel Funds:

o The upper limit for number of angel investors in a scheme has been
increased from forty nine to two hundred

o Angel Funds will be allowed to invest in start-ups incorporated within

five years, which was earlier 3 years.

o The requirement of minimum investment amount by an Angel Fund

in any venture capital undertaking has been reduced from fifty lakhs to
twenty five lakhs.
 o The lock-in requirements of investment made by Angel Funds in the
venture capital undertaking has been reduced from three years to one
year.

o Angel Funds are allowed to invest in overseas venture capital

undertakings upto 25% of their investible corpus in line with other AIFs.

I. Ucchatar Aavishkar Yojana (UAY):

The objective of UAY is to promote industry and outcome-oriented

research projects by students. It is being implemented under Ministry
of Human Resource Development.

INR 475 crore has been provisioned for 2016-18.

180 proposals have been received from IITs and 92 have been
approved.

II. NIDHI (National Initiative for Development and

Harnessing Innovations):

NIDHI is an umbrella program by the DST for nurturing ideas and

innovations (knowledge-based and technology-driven) into successful startups

The 8 components under NIDHI would provide a range of funding

support to startups from idea to prototyping, fellowship, incubation, seed
support, acceleration support, etc., i.e. it would support each stage of a
budding startup from idea to market

One of these components, Startup-NIDHI, would financially

support each of the selected startups with an ignition grant/award of INR
10 lakh

Guidelines and pro-forma for submission of proposals have been

published on the website.

III. Million Minds Augmenting National Aspirations and

Knowledge (MANAK) scheme of DST:
 In context of Start-up India initiative, the INSPIRE Awards scheme
is being revamped to foster culture of innovation through innovation focused
programs for students

The scheme has been rechristened as INSPIRE Awards-MANAK

(Million Minds Augmenting National Aspiration and knowledge)

10 lakh ideas will be targeted from 5 lakh schools across the

country in a financial year

1 lakh top ideas will be shortlisted for an INSPIRE Award of Rs.

5,000 each, for preparation of a project/model and participation in district-
level exhibitions and project competitions

10,000 best projects will be shortlisted for state-level exhibitions

and project competitions

Top 1,000 awardees shortlisted at the state level will be given Rs.
20,000 each for development of improved prototype for national level event

Top 60 projects will be shortlisted for National Awards and

mentoring and will also be showcased at the Annual Festival of Innovations
in Rashtrapati Bhavan.

Tinkering Labs

With a vision to Cultivate one Million children in India as Neoteric

Innovators, Atal Innovation Mission (AIM) is establishing Atal Tinkering
Laboratories (ATLs) in schools across India. 257 Tinkering Labs sanctioned under
AIM (out of more than 30,000 applications).