“All of us, in a sense, struggle continuously all the time, because we never get what we want. The important thing which I’ve really learned is how do you not give up, because you never succeed in the first attempt.” – Mukesh Ambani
Prime Minister of India Shri Narendra Modi announced the Startup India programme on 15th August 2015. The programme aimed to boost the entrepreneurship and encourage startups in creating jobs for the Indians. It is based on an action plan aimed at promoting bank financing for start-up ventures.
How do you feel when you can open a business in less than a month’s time period?
Startup India Programme focused on restricting the role of States in the policy domain and getting rid of “License Raj” and hindrances like land permissions, foreign investment proposal, and environmental clearances. To Increase the pace of Startup India campaign government has launched Pradhan Mantri Mudra Yojana (PMMY) and the MUDRA Bank (With a fund of Rs.20,000 crores, a new institution set up for the development and refinancing activities related to SMSE and micro-unit enterprises)
Need for STARTUP INDIA
India is the second most populous country after China which need bigger schemes and better action plans to create jobs for the larger part of the population. But, the National Sample Survey Office recent data indicates that unemployment is almost becoming endemic in this country at 6.1% which is highest in the last 40 years. As per the Centre for Monitoring Indian Economy (CMIE) and a private think tank India’s unemployment rate at 7.38 in urban areas and 5.8 in rural areas.
A typical Indian parent thinks, their child will get a secured life if he/she gets a public sector job. Indian public sector is a major employer of youth and one of them is Indian Railways, Asia’s biggest public sector service provider with around 13.5 lakh staff. Over 2.8 crore people have applied for the 90,000 job offers in as per railway recruitment board. These numbers show the height of unemployment in India at present.
So, entrepreneurship must be seen as a serious alternative because of inadequate government jobs and a slow uptick in private sector jobs. Entrepreneurship will boost employment in the county much more than any other options and provide wealth generation.
Components of Startup India
The action plan for this initiative is based on the following three pillars:
- Simplification and Handholding.
- Funding Support and Incentives.
- Industry-Academia Partnership and Incubation.
Department for Promotion of Industry and Internal trade (DPI&IT) focuses on areas relating to this campaign such as discard restrictive states Government Policies and reduces the application processing time and paperwork through the single window system.
Benefits for a recognized startup under Startup India scheme are
- 10,000 crore startup funding pool (SIDBI).
- Reduction in patent registration fees.
- Revised Bankruptcy Code, to ensure a 90-day exit window.
- Freedom from mystifying inspections for the first 3 years of operation.
- The exemption of Capital Gain Tax for the first 3 years.
- Income Tax exemption for 3 years.
- Self-certification facility (Mobile App).
Startup India programme helps to find the venture capitals and Angel investors for your Startup on its platform.
Goals of Startup INDIA
- Under the Atal Innovation Mission, create an Innovation Hub.
- Including the students in innovation-related programmes and rewarding them. For phase 1, the targets are schools and colleges which involve 10 lakh children in this programme through various workshop and competition platform.
- Providing IPR protection to startup firms.
- Encourage entrepreneurship within the country.
- Promoting India across the world as a start-up hub.
Eligibility Criteria to Register for Startup India Scheme
Startup India programme launched by the Government of India brought a new spirit among the young entrepreneurs who wish to chase their dreams.
Government of India published the notification for the eligibility criteria to avail the benefits under Startup India Scheme are
- The company/startup must be registered as a Private company, Partnership firm or Limited Liability Partnership (LLP).
- The Startup must not be formed by splitting up or reconstruction of an existing business.
- The startup must not be aged more than 7 years from the date of registration. In Case of biotechnology sector 10 years.
- Annual turnover should not be over 25 crores.
- The entity should work towards innovation, development, and commercialization of the product.
- Significantly improving the product or service by adding value to it and workflow.
- Approval from the Department of Industrial Policy and Promotion (DIPP).
How to register for the Startup India Scheme
- First, you must incorporate the business as a Partnership firm or Limited Liability partnership or Private limited company.
- Create an account in Startup India Portal
- a) Visit the official web portal of Startup India https://www.startupindia.gov.in and Click on ‘Register’ button.
- b) Provide your email id and mobile number.
- c) OTP will be sent to your email Id. Verify the email Id with OTP.
- d) Log in with the email Id and password.
- Click on ‘Get Recognised’, it will direct you to ‘Startup Recognition Page’.
- Enter all the ‘Entity details’. (Example: PAN, Entity registration No, etc.)
- Fill the complete address details of the company.
- Next, fill the ‘Authorized Representative details’.
- Provide the details of Partners and directors of your Startup.
- Next, provide information such as
- a) The Number of employees in the company.
- b) Giving details about the type of product or service you provide ( Innovative, problem solving, etc.)
- c) Details of wealth and employment generation through your business model.
- Upload the details of proof of funding.
- Giving details of the business model, the solutions you are providing, etc.
- Upload the ‘Incorporation/ Registration Certificate’.
- Submit the details after accepting the ‘Terms and conditions’.
After examining the application and documents uploaded the Certificate of Recognition your startup will be issued.
- Certificate of Incorporation or registration
- Entities Income tax details, PAN, TAN and GST documents details.
- The audited balance sheet of 2 years
- Income tax documents in XML format.
- Assets and liability details
75 Startup support hubs have been set up with the help of MHRD Department and the Department of Science and Technology in different national importance institutions such as the National Institutes of Technology (NITs), the Indian Institutes of Information Technology (IIITs), the Indian Institutes of Science Education and Research (IISERs) and National Institutes of Pharmaceutical Education and Research (NIPERs).
The Reserve Bank of India promised to improve the ‘ease of doing business’ in the country and contribute to an ecosystem that is conducive for the growth of start-up businesses.
At present, there are nearly 46 thousand startups have been registered. The startup belongs to categories such as Green technology, Marketing, Fintech, Travel and Tourism, IT services, Internet of Things, Renewable energy, etc.
A startup will have key stages in development and growth. They are
In this stage, founders of the entity focus much on market research and sharpening the service idea or product. Finding the customer segment and targeted audience is important to decide in this stage.
11127 startups are in this stage as per startup India portal.
Concept of proof is called validation, it is the most stressful stage for a startup. In this stage, it must focus on multiple things, brand positioning, product strategy and attracting the customers.
17014 startups are getting support from the mentors to build a strong foundation for themselves.
In this stage, the startup’s task is to grow and attract investors by showing sustainable profits.
14068 startups are showing a good sign in profit making.
The startup will explore new markets and increase its service or products portfolio.
3742 new entities are exploring new markets as per the Startup India portal.
There are nearly 500 mentors who support startups in different stages by giving guidance in the corporate world. Sometimes mentors will become angel investors in the startup.
In startup India ecosystem, there are any investors who support the young minds and helps in achieving their dreams. There are angel investors and venture capitalists in the pool. Few of them are BSNL, State angel investor groups (Rajasthan, Punjab, Delhi, etc.), AI developing companies.
A company or entity that helps startups companies to grow by providing needed management training and office space to them. The incubators are suitable for the early stage of startups in the ecosystem.
At present, there are 158 startup Incubators across the country under this programme. The highest number of incubators are located in Delhi region and Maharashtra state.
Accelerators are companies with helps the startups in providing advice, mentorship, and resources to succeed in the business. It helps in preparing the startups for Demo day or pitching the investors.
There are few accelerator categories such as
AI accelerators, Biotech accelerators, Hardware accelerators, etc.
Many government bodies or government department are involved in giving the faster clearance or approval certificates in the respective departments.
Few government bodies are
- Ministry of Electronics and Information Technology (Telangana State).
- Department of science and Industrial research (NRDC)
- Ministry of Civil Aviation.
- Ministry of Home Affairs
- Ministry of Science and Technology
- Ministry of MSME.
Collaboration between different countries to set up a startup hub. These International startup hubs bring the different countries startup ecosystems closer and facilitate innovation between different economies.
At present there are following collaborative hubs
- India -Korea Startup Hub
- Japan India Startup Hub
- India Israel Innovation Bridge
- India Singapore Entrepreneurship Bridge
- India Finland Tech Hub.
And much more International collaborations are in the pipeline. This collaboration helps in sharing the tech getting international funding for Indian Startups and international recognition.
The “angel tax” and new e-commerce policy became a hindrance for the new entrepreneurs. In the entire decision-making process, we need continuity and stability from the planning stage to execution stages. To decide the innovative nature of a startup, validating a startup, eligibility for tax exemption DIPP must consult professional experts in the respective domain areas rather than the inter-ministerial board.
What is a startup?
An entity or a company is termed as a startup if the entity is incorporated as a Private Limited company (The Companies Act, 2013) or a partnership firm (Section 59 of the Partnership Act, 1932) or registered as a Limited Liability Partnership (under LLP Act, 2008) in the country. The company should not be aged more than 7 years from the date of its registration. And the turnover must not be more than 25 crores.
How can I start a startup?
If you have an idea or a business plan which can lead to generation of wealth and employment you can start a business company. To start a business you can avail upto 10 lakh of MUDRA loans under PMMY scheme. The interest rates are very low compared to other loans and these loans need no guarantee or collateral.
How much is the registration cost?
Good news for the young entrepreneurs, Finance Minister on 26th January 2018, announced Zero registration fee for the companies having Authorised capital upto Rs.10 lakh. The Ministry of Corporate Affairs published a notification officially on official Gazette of India as an amendment to the Companies (Incorporation) Rules, 2014.
How to register a company online?
Now the registration of company has been made much more easy. Now you can incorporate a company electronically with a simple procedure, by filling SPICe or Form INC-32, it helps you to incorporate a company for reservation of name, allotment of DIN and helps in fast track incorporation of a company in India, it is similar to Form INC-29.
By filling Form INC-32, a company can also obtain TAN, PAN and ESIC registration.
For How many years a startup gets tax exemption?
If a startup meets the conditions mentioned under G.S.R. notification 501(E), the company can get a tax exemption under section 80 IAC of the Income Tax Act and section 56 of the Income Tax Act (Also known as Angel Tax) for 3 years.