Can you tell me the initiative that was taken back in 2016 to support entrepreneurs and to build a robust startup ecosystem to transform India into a country of job creators instead of job seekers?
Could you answer it? If yes, nice GK! And if not, don’t worry I’ll tell you….
The Start-up India Scheme!
But before digging right in and telling you about the startup scheme let’s first see what startups are!
What if your idea is not just an idea? What if it sees light? What if it’s truly born? India has journey of the startup revolution. The ecosystem has been made in India for the rise of startups.
Let’s talk about the boom of startup culture in India.
But before diving into India’s startup culture. Let’s first try to understand what a startup is and how it works
It is “a young company that is just beginning to develop.” Brought into function either because the founder(s) have come up with a unique solution (a product, software, or service) to erase a challenging issue because they have found a more efficient way to recreate and distribute something that previously existed.
But there are some steps that make their start-up great or unique from the rest! But what is it?
It is a blend of the following:
1. An idea that is exciting, effective, and feasible all at the same time.
2. Managers who are resourceful and have the knack to bring out the best in each and every employee.
3. An ability to anticipate future trends and rapidly adapt to changing business environment.
4. A mentality that puts purpose ahead of money.
5. A tact to handle tough customers with patience and care.
6. Mentors who can guide the team through difficult and tough times with their experience and wisdom.
Now there might be a small question floating around your mind? There are hundreds of startups but only a few succeed. Why do only some startups succeed while many fail?
In simple words, to join the top 1%, you must have to execute the right idea in the right direction at the right time. This is an age-old formula for success written in golden letters. Once you crack the above formula everything functions in sync and starts falling in the right place. The output increases, your customer base expands and hence the company automatically starts to grow exponentially.
But there are those 99% who don’t make it to the top 1%. Here’s why:
1. Running out of money and the right resources to feed into the system.
2. Lack of persistence or quitting too early in the process.
3. Fear of taking risks or challenges or changing according to changing times.
4. Wrong notion about the market. Late execution, too slow on picking up and incorrect pricing, so on and so forth.
But on the brighter side, today’s Indians no matter their age are absolutely not afraid of keeping aside their 9 to 5 desk jobs to see their dreams take the flight and become a living reality to the most. They are all set to break the chains to attain powerful leadership roles. Also with the Modi Government’s initiative of the startup India scheme, entrepreneurs are rising and taking India to a whole another level in the business world. Startup growth is a significant achievement for the developing India.
Here’s my tiny suggestion worth a cent;
If any startup, no matter where it’s based wants to succeed, it must let the employees be and express themselves freely with no negativity. People give their best only when they are actually allowed to talk and act freely without any second thoughts. In my opinion, more than the idea itself, it is the culture of a workplace that decides whether or not it succeeds.
Without any more diversions, let’s jump right back into and let me tell you all about the Startup India Scheme.
The Indian government has launched an initiative called Startup India. The campaign of Startup India was first announced by Honorable Prime Minister Narendra Modi during his speech on 15th August 2015, which was later implemented on 16th January 2016.
16th January is now celebrated as “National Start-up Day”. To celebrate the eve of the first National Start-up Day 48 startups were awarded by the Prime Minister.
Under the Startup India Initiative, the companies which are registered with DPIIT are eligible to receive the following benefits:
1. Simplification and Handholding: Reduction in information asymmetry by facilitating easier compliance, simpler exit process for failed startups, legal assistance, expediting patent applications, and creating a website.
2. Funding Support and Incentives: Exemptions on Income Tax and Capital Gains Tax for eligible startups; a loan guarantee programme and a pool of funds to inject additional resources into the startup ecosystem.
3. Industry-Academia Partnership and Incubation: Creation of numerous incubators and innovation labs, events, competitions, and grants.
So, the benefits look very fascinating, but not every organization is eligible to register with DPIIT!
There are certain criteria’s that an organization needs to surpass to register with DPIIT and be eligible for the Start-up India Scheme, let’s take a look at it:
- The company to be formed must be a private limited company or a limited liability partnership.
- It should be a new firm or not older than five years, and the total turnover of the company should be not exceeding 25 crores.
- The firms should have obtained the approval from the Department of Industrial Policy and Promotion (DIPP).
- To get approval from DIPP, the firm should be funded by an Incubation fund, Angel Fund or Private Equity Fund.
- The firm should have obtained a patron guarantee from the Indian patent and Trademark Office.
- It must have a recommendation letter by an incubation.
- The firm must provide innovative schemes or products.
- Angel fund, Incubation fund, Accelerators, Private Equity Fund, Angel network must be registered with SEBI (Securities and Exchange Board of India).
Now that we know the eligibility criteria, let’s talk about the most important thing…..
As hardcore Indians one of the most important thing which we look for in each and everything at every point of our lives is Benefit.
So, let me quickly tell you about the benefits of registering under the Start-up India initiative:
- Tax Exemption under 80IAC – Eligible startups are exempted from paying tax for 3 consecutive financial years out of their first ten since incorporation year.
- Exemption under section 56 – Investments into eligible startups by accredited investors, non-residents, AIFs (Category 1), & listed companies with a net worth of more than INR 100 Crore or turnover more than INR 250 Crore will be exempted. Moreover, consideration of shares received by eligible startups will be exempted up to an aggregate limit of INR 25 Crore.
- 80% less cost for patent filing – The Central Government will bear the entire fees of the facilitators for any number of patents, trademarks or designs that a Startup may file, and the Startups shall bear the cost only of the statutory fees payable. Additionally, startups will receive an 80% rebate on patent application fees compared to other businesses.
- Easy Winding Up – As per the Insolvency and Bankruptcy Code, 2016, startups with simple debt structures, within 90 days of submitting the insolvency application can be dissolved.
- In addition, the government has established a starting fund of Rs. 2500 crore and a credit guarantee fund of Rs. 500 crore.
In the last 3-4 years startups have become a very enticing and rewarding prospect for the youth of this country. Working with a select group of people and having the freedom to choose your own company tactics make it an empowering profession.
The Indian economy has benefited greatly from these businesses’ rising popularity. Startups get a lot of traction from skilled and unskilled young professionals in this country. These firms not only create jobs for the millions of young, unemployed professionals in our nation but also set the bar for innovation. Most successful startups find their origin in a young unemployed graduate coming up with a ground – breaking product. A startup business needs its products and services to stand out from all the other similar products in order to be successful.
A new business cannot compete in the market with an established, reputable brand. This framework is supported in part by the Startup India Scheme. In turn, this strengthens our economy.
After this, I can definitely say that Startups are the future of developing India.
See you soon, Tada!
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