Startup India: A Governmental Startup Support System

Startup India: A Governmental Startup Support System

This is the era of New Startups and new business Ideas. In our country India, with a population of 1.25 billion, there is no limitation of new ideas with fresh brains. If you see the last 10 years of India’s business growth , it is amazing. You must have seen that a number of startups reaching the acme and they are one of the big names not only in India but also in the world. Flipkart, Paytm, Oyo Rooms, FreeCharge, Ola etc. But at the same time, we have seen startups which had seen downfalls and got closed irrespective of their brilliant business model. Many of the young entrepreneurs’ ideas died a death just because of lack of support system. What is that support system exactly – lack of initial funding, strict labour law, burdening tax rule, lack of early stage guarantors in front of banks. So to support the Indian entrepreneurship which plays a crucial role in the economic growth of a country, Government of India has taken a crucial step with Startup India.

Related- What is Make in India?

In the present year 2016, India is at the 3rd position worldwide with 4200+ Startups. Approximately 800 Startups are taking birth every year only in India and if we rely on the Nasscom analysed figures, then by 2020 there would be 11500 startups which can employ 250K people. The figures are really astonishing and we can say that India is the fastest growing Startup ecosystem. But, there is a dark side of this bright figure, 90% of the start-ups have  died by now. In the last 2 years, since 2014 to 2016 – 2281 start-ups have been  shut downstartup failure funded non-funded data stats

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Indian Startups outside India

Have you ever wondered that Indian entrepreneurs have blossomed outside India at an astonishing rate? If you see Silicon Valley, Indian figures are prominent among foreign-born entrepreneurs.  Silicon Valley speaks a difference between what an Indian can accomplish out of  India versus in India. As per a study, Indians stands third with respect to the  immigrant founders across the world. It simply conveys that Indians can foster a strong business ecosystem.

The Government of India realised this need of a support system which cannot only strengthen the economy of India but also generates the ample amount of employability inside the country. India can streamline regulations of better domestic entrepreneurship. Indian Startups need a motivated culture that stirs the spirit of entrepreneurship in Silicon Valley.

Related- Advantages and Disadvantages of Make in India

What is Startup India?

Startup India is a flagship initiative started by Indian Government to support startups ideas at the initial level. The intention is to build a strong ecosystem for nurturing innovations and Startups in the country that will sustainability in economic growth and generate large scale employment opportunities. The Startup India initiative will empower the Indian startups to grow through innovations and design.

Startup India Campaign was launched on 16th January 2016 by the current prime minister of India Narendra Modi and comes under Ministry of Commerce and Industry. Department of Industrial Policy and Promotions (DIPP) are responsible for organising the operations of Startup India. The launch event was attended by top 40 CEOs and startup founders from Silicon Valley. The basic idea  of Start India is not to leave any talent behind.

The prime minister of India Narendra Modi addressed Indian startups on the launch of Startup India and said –

I see startups technology and innovations as exciting and effective instruments for India’s Transformation.

What is the eligibility of a business to be recognised as a Startup by Startup India?

Startup India has been announced by Government of India for creating a conducive environment for startups in India. In this mission, various ministries proposed various activities for this purpose. To bring the uniformity , an entity shall be considered as a “Startup”. So which entity or business unit will be considered as a Startup? Followings are the key qualities; you have to review your business before applying for Startup India action plans.

So which entity or business unit will be considered as a Startup? Followings are the key qualities; you have to review your business before applying for Startup India action plans.

Followings are the key qualities  that you must review  your business model  with before applying for Startup India action plans.

  • Up to 5 years from the date of its incorporation/registration.
  •  The turnover for any of the financial years should  not exceed Rs, 25cr.
  • It is working towards innovation, development, deployment and also to commercialise new products, processes or services driven by technology or intellectual property.
  • The entity must have its identical recognition means it should not have been formed by splitting from an already running or existed business.
  • The meaning of entity here is a private limited company or registered partnership firm or a limited liability partnership.

Apart from the above criteria, if you want to obtain the tax benefits from the government, a startup so identified under above definition shall be required to obtain a certificate of an eligible business from the Inter-Ministerial Board of Certification which consists of:

  • Joint Secretary, Department of Industrial Policy and Promotions
  • Representative of Department of Science
  • Representative of Department of Biotechnology

Related- How “Make in India” Will Effect Indian Economy?

What is the Government’s Role in Startup India Campaign?

This is very clear up to now that Government wants Indian entrepreneur to grow their business ideas in the hassle free country. But what is their key role? So, to keep the only light on the hard and tough path of entrepreneurship of Indian brains, Government has prepared an action plan. This Startup India Action Plan has a dozen of policy innovations to foster more creative startups. Like Relaxations in Tax policy and financial and labour laws.

Ministry of Human Resource Development and Department of Science and Technology together are creating startup support hubs in colleges and universities like – National Institute of Technology, Indian Institute of Technology, the Indian Institute of Science Education and Research and the National Institute of Pharmaceutical Education and Research.

The Reserve bank of India has  also been  involved in this campaign. They are taking steps to help improve the ease of doing business in the country and contribute to an ecosystem that is conducive for the growth of Startup Business.

Related- Make In India Policies- Motives & Conclusion

Educational Alliances with Startup India

Educational Alliances is one of the important strategies of Startup India. The Government is trying to have a bond with prestigious educational institutes and establish alliances with them. Under this scheme, a bunch of startups will acknowledge an MoU with the educational institute and they will establish the startup centres inside the campus. Till now the National Institute of Silchar and Indian Institute of Madras have joined the program.  These startup centres promote the startup ideas inside the campus and provide proper guidance to the bright minds of the institutions.

According to the current news , MoU has been signed with Yi Mysuru. The chairman of Yi Mysuru, Raymya Bopanna said that –

The MoU has been signed keeping in mind that the laws are increasing both in number and complexity. It requires professionals to respond to specific queries on startup initiatives, agreement reviews or drafting, compliance requirement, tax issues, structuring of corporate deals or registering of startups.”

Startup India Investors till now

So now the big question comes,

Has any big investor invested in startups through Startup India?

The answer is still vague.

But some of the famous investors have invested a bit. Like Soft bank, headquarter in Japan has invested US $2Bilion into Indian Startups. Despite it, Google declared to launch one startup based on highest votes in which top three startups will be allowed to join the next Google Launchpad week and the final winner will be ventured by Google.

With the initiation of Startup India, there is some hope that Indian Startups would get some of the support from Government to grow. Hopefully , new entrepreneurs who are completely unaware of the basics also get some idea regarding how they can  proceed. But still, the path is not much clear. A lot of policies and law need to be modified.

Namita Lal
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Namita Lal

Content Writer at Business Alligators
She is a SAP Consultant by profession and Student of management and technology. A hardcore Business Enthusiasts at heart. She does analysis of startups and their new business ideas; afterwards writes their story and mantra of success. Apart from Technology and Business, Her interests in Camera make her try to see the world differently. A good book and hot cup of tea are her favorite time pass.
Namita Lal
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