Startup is the current buzzword in the business domain of India. There can be no better opportunity for the innovative youth who dare to venture out and try something new. Since the PM’s aggressive projection of the startup scheme a year back, thousands of young boys and girls are experimenting with their dreams and tasting success.
Since the atmosphere is conducive like never before, and government support is forthcoming, several new, adventurous and untried fields are being explored, which is laying out a new business ecosystem that is smart, may be unconventional, and vibrant, providing an enriching experience to the customer, generating employment for millions and strengthening the micro-economy. For the first time in the country’s business history, a model has been launched that would see the minimalist government interference, which in turn, paves the way for a smoother and faster set-up process and, bereft of the red-tape hurdles, a more efficient business atmosphere.
What is a startup as per the govt?
To reap the government benefits of startup, the criterion is that an entity should not be more than five years old. The entity should also be not a part or branch of an older and/bigger entity or parent company. In addition to that, the annual turnover of that unit should not be more than Rs 25 crore as per the preceding years’ audit. Finally, the entity should be registered and established in India. These are the basics to fall under the startup category. Businesses which don’t have commercial viability are not liable to be brought under the startup scheme.
Salient features
Why startup is a lucrative deal at this time for the youth is the fact that it needs single window clearance, even through mobile app. There is no running from department to department and long delays in processing of files. Things will be submitted, sorted out and cleared all at one place. Also startups will be allowed to self-certify compliance (through the startup mobile app) with nine labour and environment laws. There will be no inspection for the first three years.
The second good thing is that if a business fails, there is a 90-day exit window under Bankruptcy Code, which means if a new business shuts down, the owner has to bear minimal losses for premature winding up. Another thing the government has done is to set aside a corpus of a whopping Rs 10,000 crore exclusively to help funding startups.
There is also a 3-year break on tax from profit and also on Capital Gains for the investor. To help the youth, the government is also opening 75 startup support hubs across the country in IITs, IIMs and NITs. These support hubs, acting as nodal agencies will also collaborate with central and state governments, Indian and foreign VCs, angel networks, banks, incubators, legal partners, consultants, universities and R&D institutions, thereby further easing the process. In addition, it will also assist startups through their life cycle with specific focus on important aspects like obtaining financing, feasibility testing, business structuring advisory, enhancement of marketing skills, technology commercialisation and management evaluation.
Japan headquartered SoftBank has chipped in with US $ 2 bn to help fund the progressive scheme, with a total outlay of $10 billion in a staggered format. Google and Oracle have also joined the fray in different capacities. Oracle for instance is opening 17 incubation centres for start-ups in major cities of the country.
To bolster the startup ecosystem, the government is also holding startup fests at national and international stages where sessions are held to connect investors, mentors, incubators and startups, showcase innovations, exhibitions and product launches, encourage pitches by startups, mentor sessions, talks by disruptive innovators, announce rewards and recognitions, hold panels and conferences with industry leaders, etc, thereby lending a fecund ground for prospective startup investors to go ahead in an encouraging atmosphere.
The Atal Innovation Mission (AIM) with Self-Employment and Talent Utilisation (SETU) Programme also needs to be mentioned, whose main purpose is entrepreneurship and innovation promotion. Pre-incubation training to potential entrepreneurs in technology in collaboration with various academic institutions with expertise in the field and seed funding to potentially successful and high growth startups are some of the things AIM-SETU is doing. Providing support to State Innovation Councils for awareness creation and organising state-level workshops/conferences is also one of the major roles it is playing in bolstering the startup support system.
Prospects
With so much happening in the sector, it is certainly a good time for the youth to think beyond the mundane and the conventional. Funds are galore and it is only for one’s ability and hard work to take full advantage of this silent revolution. The government is doing its best to make the startup sector an exemplary innovation in good governance and since it is a youth-oriented programme, and India being a country with a high youth population, there is every chance that it will reflect in a big way on our economy.
More people are getting aware of the Startup India scheme, more they are getting drawn into it. To make it more a pan-India phenomenon and involve more youngsters in it, the government is spreading the word through local and regional level seminars and conclaves apart from tying up with nearest institutes of repute in respective states and districts to spread technology and expertise down to the last man in the queue and propel the scheme in a still bigger way. If you have an idea in the making, take the plunge and reap rich harvests! This is a now or never opportunity for those who dare.
Writer
Diptiman Chakraborty
