TEAM YS 16 JANUARY 2016
It was on the occasion of India’s 69th Independence Day that Prime Minister Narendra Modi announced the Startup India initiative from the ramparts of India’s iconic Red Fort. Just five months later, on 16th January, the PM unveiled the historic Startup Action Plan. PM Modi’s talk was laced with humour: “If anyone asks what’s the difference, the government working on a Saturday that too after 6pm is the difference.” He also said: “When I heard Ritesh (Aggarwal of Oyo) speak, I thought how a tea seller like me didn’t think of setting up a hotel chain.”
In the Vigyan Bhawan auditorium that was bristling with energy and anticipation, PM Narendra Modi announced the Startup Action Plan. Here are the top points (you can check the complete report at the end of this article):
- Compliance regime based on self certification – To reduce regulatory burden, startups shall be allowed to self-certify compliance with labour and environment laws. In case of labour laws, no inspection will be conducted for three years. In case of environment laws, startups under ‘white’ category would be able to self certify compliance.
- Startup India hub – Will be single-point of contact and hand-holding.
- 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 that will be launched in April.
- Patent protection – PM Modi said patent protection and IP rights are a major concern for Indian startups. The government will make IPR procedure transparent for stratups. Fast track mechanisms of startup patent applications – in order to allow startups to realise the value of their IPRs at the earliest possible. Patent applications of the startups shall be fast tracked for examination and disposal.
- Panel of facilitators to provide legal support and assist in filing of patent application – Facilitators shall provide assistance for startups in filing and disposal of patent applications related to patents, trademarks and design under relevant Acts. Government shall bear the entire fees of the facilitators for any number of patents, trademarks or designs that a startup may file.
- 80% rebate on filing patent applications by startups – To enable startups to reduce costs in their crucial formative years, startups shall be provided an 80% rebate in filing patents vis-a-vis other companies.
- Relaxed norms of public procurement for startups – to provide an equal platform to startups vis-a-vis the experienced startups/companies in public procurement, startups (in the manufacturing sector) shall be exempted from the criteria of prior ‘experience/turnover’ without any relaxation in quality standards or technical parameters.
- Faster exits for startups – To make it easier for startups to exit, provision for fast-tracking closure of businesses have been included in ‘The insolvency and Bankrupcy Bill 2015’. Startups with simple debt structures may be wound up within a period of 90 days from making of an application for winding up on a fast-track basis.
- Funds of funds with a corpus of Rs 10,000 crore – To provide funding support for development and growth of innovation driven enterprises, 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 a period of 4 years.
- Credit Guarantee Fund – To catalyse entrepreneurship through credit to innovators across all sections of society, credit guarantee mechanism through National Credit Guarantee Trust Company/SIDBI shall be rolled out with a budgetary corpus of Rs 500 cr per year for the next four years.
- Exemption from Capital Gains Tax – Exemptions shall be given in casecapital 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 shall be extended to all startups.
- Tax exemption for startups – To promote growth of startups, profit of startups, set up after April 1,2016, shall be exempted from income-tax for a period of three years.
- Tax exemption on investments above Fair Market Value – In line with the exemption available to venture capital funds to invest in startups above fair market value (FMV), investments made by incubators above FMV shall also be exempted.
- Startup fests – For showcasing innovation and providing a collaboration platform
- Launch of Atal Innovation Mission
Entrepreneurship promotion via- Establishment of sector specific incubators
- Establishment of 500 tinkering labs with 3D printers in universities
- Pre-incubation training to potential entrepreneurs
- Strengthening of existing incubation facilities
- Seed funding to high growth startups
Innovation promotion via
- Institution of innovation awards (three per state/UT) and three national level
- Providing support to State Innovation councils for awareness creation and organising state level workshops/conferences
- Launch of Grand Innovation Challenge Awards for finding low cost solution to India’s pressing and intractable problems
- Setting up of 35 new incubators in institutions – Funding support of 40% (subject to a maximum of Rs 10 crore) shall be provided by central government for establishment of new incubators in existing institutions for which 40% funding by the respective state government and 20% funding by the private sector has been committed.
- Setting up of 7 new research parks modeled on the research park at IIT Madras – Government shall set up seven new research parks – six in IITs, one in IISc with an initial investment of Rs 100 crore each. These parks shall enable companies with a research focus to set up base and leverage the expertise of academic/research institution. 31 centres of innovation, 13 startup centres and 18 technology business incubators in national institutions will be established.
- Promote entrepreneurship in biotechnology – Five new bio clusters, 50 new bio incubators, 150 technology transfer offices and 20 bio connect offices will be established.
- Innovation focused programmes for students – Innovation core program shall be initiated to target school kids with an outreach to 10 lakh innovations from five lakh schools. A Grand Challenge Program (National Initiative for Developing and Harnessing Innovations) to support and award Rs 10 lakhs to 20 student innovations from Innovation and Entrepreneurship Development Centres. Uchhattar Avishkar Yojanahas earmarked Rs 250 crore per annum towards fostering ‘very high quality’ research amongst IIT students.
Are you eligible for schemes under ambitious Startup Action Plan?
- ROHIT LOHADE
18 JANUARY 2016
Many entrepreneurs were excited by the announcements made by Prime Minister Narendra Modi as part of the Startup India Action Plan. There’s no doubt the measures were significant, but they do beg the question, are all the startups really eligible for the benefits that were announced?
Here’s a quick analysis of the eligibility criteria(please note that the following flow chart is specifically applicable for startups seeking tax exemption):
In addition, for a startup to be recognized as one,
- It must be an entity registered/incorporated as a:
Private Limited Company under the Companies Act, 2013; or
b. Registered Partnership firm under the Indian Partnership Act, 1932; or
c. Limited Liability Partnership under the Limited Liability Partnership Act, 2008. - Five years must not have elapsed from the date of incorporation/registration.
- Annual turnover (as defined in the Companies Act, 2013) in any preceding financial year must not exceed Rs. 25 crore.
- Startup must be working towards innovation, development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property.
- The Startup must aim to develop and commercialise:
a) a new product or service or process; or
b) a significantly improved existing product or service or process that will create or add value for customers or workflow. - The Startup must not merely be engaged in:
developing products or services or processes which do not have potential for commercialisation; or
b. undifferentiated products or services or processes; or
c. products or services or processes with no or limited incremental value for customers or workflow - The Startup must not be formed by splitting up, or reconstruction, of a business already in existence.
- The Startup has obtained certification from the Inter-Ministerial Board, setup by DIPP to validate the innovative nature of the business, and
a. be supported by a recommendation (with regard to innovative nature of business), in a format specified by DIPP, from an incubator established in a post-graduate college in India; or
b. be supported by an incubator which is funded (in relation to the project) from GoI as part of any specified scheme to promote innovation; or
c. be supported by a recommendation (with regard to innovative nature of business), in a format specified by DIPP, from an incubator recognized by GoI; or
d. be funded by an Incubation Fund/Angel Fund/Private Equity Fund/Accelerator/Angel Network duly registered with SEBI* that endorses innovative nature of the business; or
e. be funded by the Government of India as part of any specified scheme to promote innovation; or
f. have a patent granted by the Indian Patent and Trademark Office in areas affiliated with the nature of business being promoted.
* DIPP may publish a ‘negative’ list of funds which are not eligible for this initiative.Our Analysis
One of the eligibility criteria states that “The product or service should be a new one or a significantly improved version of existing services or products.”
Let’s take the example of startups who are engaged in creating and developing online marketplaces like Flipkart and Amazon. So a new startup engaged in the same field may not be eligible unless its product is significantly improved than what existing players provide.
Another eligibility criteria states that the startup should get a recommendation letter from the recognized incubator cell or be recognized by the GoI or should be funded by recognized funds.Now this will be quite a task for startups.
In our estimate, going by these criteria, roughly 60% of existing startups could be rendered ineligible for the Startup India plan.
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2016年 01月 18日 15:51印度拟推新计划扶持初创企业
- It must be an entity registered/incorporated as a:
- 印度总理莫迪(Narendra Modi)上周六表示，印度政府将对初创企业减税，并以间接方式向初创企业投入逾10亿美元资金。
这是莫迪推出的“印度初创企业行动计划”(Startup India Action Plan)计划的一部分，该计划旨在清除创业者认为会遏制新企业发展的监管障碍。
Aarin Capital Partners的Mohandas Pai称，去年，从投资者手中筹集资金的印度初创企业中，有四分之三将其公司法定所在地迁出印度。2014年这一比例为54%。
印度创业者抱怨称，在印度设立一家公司至少要花上一个月时间。莫迪上周六表示，注册新公司时间将缩短至一天，并且可以通过移动应用程序进行注册。
莫迪称，政府将简化初创企业破产程序。上个月提交至议会的破产法案将使债务结构简单的企业可以在90天内完成破产程序，相比之下，当前破产程序可能持续数年。创业者称，他们需要迅速清算破产企业，以便重新配置剩余现金。
莫迪称，政府计划在四年内向印度初创企业间接投资1,000亿卢比（合15亿美元），方式是将这些资金投入风投基金。任何投资该基金的其他投资者均可免缴资本利得税。将资本利得再投资的企业还可免缴因这些利润产生的税款。
该计划还简要提出，对初创企业的利润三年内减免税款，并且另行提供信贷额度。未来四年，政府每年将为总计至多50亿卢比的贷款提供担保。
此外，莫迪承诺为初创企业竞标利润丰厚的政府合同提供方便。对竞标政府合同的限制通常意味着只有大型印度企业才能在竞标中胜出。
