How is Startup India Affecting the Lives of Entrepreneurs?

Startup India | Insights success | Blog

The Start-up revolution is taking place with a storm in India and NO, it’s not because of TVF’s Pitchers or Wolf of Wall Street. The startups were happening in India long before the emergence of both the ventures. Just the kind of hype startups are getting due to increased internet and smartphone penetration in both urban and rural areas is exponential.
India has emerged as the 3rd country in the world, among global startup ecosystems with 4200 startups after the U.S and UK. Also, the number of active investors has increased from 220 in 2014 to 490 in 2015. The middle-class young brains are not lagging behind with the old thinking of 9 to 5 jobs. They are ready to take risks with the creative and innovative ideas.
Along with unique and creative ideas, entrepreneurs need tonnes of other things. Then the question emerges- How the government is playing a role in the making of tomorrow’s millionaires? The Modi government had launched Startup India program to encourage entrepreneurship in India earlier this year. There are things we need to know before we judge the initiative.
So what exactly is Startup India?
The Startup India is an action plan launched by the Modi government to promote and nurture entrepreneurship across the country. The plan is mainly based on an action plan aimed to promote bank financing for startups to boost entrepreneurship and encourage startups with job creation. The Startup India campaign was first announced by Prime Minister Modi in his 15 August 2015 address from the Red Fort and later launched earlier this year on 16 January 2016.
What is self-registration?
The objective behind the introduction of self-registration of startups through a mobile app is to reduce the regulatory burden on Startups. Traditional registration requires various formalities and labour and environmental laws that consume time. Often, new and small ventures are unaware of the process of registration and get discouraged due to waste of time in the whole process. With the Startup India, a process has become easier and faster with self-registration on a mobile app and also, the inspection that conducted in the traditional process has been eliminated. The new registration process is so much easier that one can register the company in a day.
What is Startup India Hub’s role in boosting startups?
The need for a genuine friend, guide, and mentor to hold the hand of the young Indians and walk with them has been taken care with the introduction of the Startup India Hub. To improve the ease of doing business in India, the government has created the Startup India Hub, which will be a single contact point for startup founders and will help the entrepreneurs in exchanging knowledge and accessing financial aid with the other innovators on a grand level. It will be a key stakeholder and will work in a hub and collaborate with Central and State governments, foreign and Indian VCs, angel networks, banks, incubators and assist startups through their life cycle.
How ‘fund of funds’ will provide funding support?
With the ‘fund of funds’, the government will be setting up a fund with an initial corpus of INR 2500 crore per year for the four years. It will not invest directly in startups, but it will be in the nature of ‘fund of funds,’ which will be managed by a board of professionals drawn from industry bodies, and successful startups. LIC is a co-investor in the new venture. The total corpus, the government will be providing is of INR 10,000 crore over a period of 4 years.
What is Tax Exemption to Startups?
The profits of Startup initiatives are exempted from the income-tax period of 3 years, with a view to stimulate the development of Startups in India and provide them a competitive platform. The exemption has been the center of attraction of the Startup India as it aims to facilitate the growth of business and meet the working capital requirements during the first three years of operation.
Easy Exit?
In the case of a business failure, it is crucial to reallocate capital and resources to more productive avenues. Thus, a swift and simple process has been given for Startups to wind up operations. This will promote entrepreneurs to experiment with creative and innovative ideas, without having the fear of facing a complex and long-drawn exit process where their capital remains interminably stuck. As every Indian doesn’t act without fearing the worst, this will be the leap of hope in case the worst happens.
7 New Research Parks
The government will be setting up 7 new research parks in institutes, including IIT Guwahati, IIT Hyderabad, IIT Kharagpur, IIT Delhi, IIT Gandhinagar, and IISC Banglore. The government will be investing INR 100 crore on each Research Park with an aim to encourage Research and development in mentioned institutes. All the research parks will be based on the model Research Park setup at IIT Madras.
Also, Startup India includes 31 innovation centers, Tax Exemption on Capital Gains, Legal Support and Fast-tracking Patent Examination at Lower Costs, Credit Guarantee Fund for Startups, and Harnessing Private Sector Expertise for Incubator Setup.
The Startup India promises to be a good start for the novel entrepreneurship culture in India. But how it affects the Indian young entrepreneurs, only time will tell us.

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