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.”
To promote a culture of entrepreneurship, the government on Saturday announced a slew of incentives including a Rs10,000-crore corpus for innovation-driven enterprises, a three-year break from paying income tax on profits, a Rs500-crore per year credit guarantee mechanism, and exemption from capital gains tax for start-ups. After a full day of discussions at the launch of the ‘Start-up India’ programme attended by hundreds of young entrepreneurs, Prime Minister Narendra Modi unveiled his government’s action plan to help entrepreneurs, and asked them to play a transformative role in India’s development.
BACKGROUND- India is country of 1.3 billion people and still counting.Terms like Population explosion is being used in context Of India's population. As population grows, employment should also be generated simultaneously but it hasn't been so smooth. There are too many reason behind it but one of the main reason is lack of manufacturing products in India. For ex. USA, Germany, China, Japan, all these countries have around zero employment and most significant reason is that they have robust manufacturing culture.
PRESENT SCENARIO- Current NDA government also wants to erase unemployment but this couldn't be done in 1 day or 1 year. It takes time. Even China was in similar condition in 80s but today China is competing with USA and that took around two decade. Now, India cant wait for decades because nearly 2 crore youngsters are joining the workforce every year and are forced to do meagre jobs in lack of opportunity. Condition is even worse when it comes to Btech and Mba pass outs. People keep blaming Namos foreign visit but he has tried his best to solve this problem and result is also infront of us. India is currently on 130 rank(earlier 142) on ease of doing business according to world bank report. PMs visit to Germany was a master stroke as Germany have best skill development infrastructure and Skill India mission was launched after that. But only skill will not eradicate unemployment, what's more important is proper utilisation of that skill so that India also gains in long term.
Start Ups will come in play over here. As Namo explained “Start-up is not just about mobiles and laptops… Start-up does not only mean a company with billions of dollars of money and 2,000 employees. If it is able to provide employment to even five people, it would help in taking the country forward. Young people have to change their mindsets from being job seekers to try and become job creators. Once you become a job creator, you will realise that you are transforming lives,”
Banks are going to make or break this initiative as not all start up get funding from softbank and alibaba. Mudra is already there to help start ups even in rural and semi urban area. Start ups will also help in make in india campaign to be successfull.
START UP INDIA EVENT- PM Narendra Modi concluded what was perhaps the largest startup conference for entrepreneurs in India with his action plan, which included new policies and initiatives that would make it easier for for investors and startup founders to incubate their ventures in the country. Many startup founders had expressed their wishes in the run up to the event, and would find many potential game changers in the new policies announced in the action plan. Here's what changed for India's startup ecosystem on Saturday.
1) A Rs. 10,000 crore fund for startups
The 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 four years, which will be be managed by a board with private professionals drawn from industry bodies, academia, and successful startups. The fund will participate in the capital of SEBI registered venture funds, and invest in sectors such as manufacturing, agriculture, health, and education.
2) A single point of registration for startups
The government will launch a mobile app and a portal on April 1, which will enable startups to register their company in a day. The portal will also serve as a single point of contact for clearances, approvals and registrations, and for companies to apply for schemes under the Startup India Action Plan.
3) A simplified regulatory regime based on self-certification
To reduce the regulatory burden for startups, the government will allow startups to self-certify compliance on nine labour and environment laws through the startup mobile app. No inspections will be conducted in case of the labour laws for a period of three years.
4) A fast-track mechanism filing patent applications
Launched on a pilot basis for a year, the Central Government shall bear the cost of patents, trademarks and designs for a startup, with an 80 percent rebate to encourage the creation and protection of its intellectual property.
5) A credit guarantee fund for startups
A credit guarantee mechanism willl help startups raise debt funding through the formal banking system through National Credit Guarantee Trust Company (NCGTC)/SIDBI, which has an annual corpus of Rs. 500 crore for the next four years.
6) Tax exemption for three years, and capital gains
Aimed at facilitating growth and help retain capital, startups will be exempted from income-tax for a period of three years. However, the exemption shall be available subject to non-distribution of dividend by the startup. To augment the funds available to various VCs and alternative investment funds, capital gains invested in SEBI registered venture funds will be exempt from tax as well.
7) A Startup India Hub for collaboration
The Startup India Hub will serve as a single point of contact for startup ecosystem players, and will function in a hub and spoke model with central and state governments, Indian and foreign VCs, angel networks, banks, incubators, legal partners, consultants, universities and R&D institutions. The hub will assist startups in obtaining financing, and organise mentorship programs to encourage knowledge exchange.
8) Relaxed norms of public-procurement
The Central Government, State Government and PSUs will exempt startups in the manufacturing sector from the criteria of "prior experience/ turnover" as long as they have their own manufacturing facility in India, and have the requisite capabilities and are able to fulfil the project requirements.
9) Faster exits for startups
Startups may be wound up within a period of 90 days from making of an application for winding up on a fast track basis, as per the recently tabled Insolvency and Bankruptcy Bill 2015, which has provisions for voluntary closure of businesses. This process will respect the concept of limited liability.
10) Atal Innovation Mission to encourage entrepreneurship and innovation
The Atal Innovation Mission will establish sector specific incubators and 500 'Tinkering Labs' to promote entrepreneurship, provide pre-incubation training and a seed fund for high-growth startups. Three innovation awards will be given per state and union territory, along with three national awards, as well as a Grand Innovation Challenge Award for finding ultra-low cost solutions for India.
11) Innovation focused programs for students
An innovation core program targeted at school kids aims to source 10 lakh innovations from five lakh schools, out of which the the best 100 would be shortlisted and showcased at an Annual Festival of Innovations, to be held in Rashtrapati Bhavan. A Grand Challenge program called NIDHI (National Initiative for Developing and Harnessing Innovations) shall be instituted through Innovation and Entrepreneurship Development Centres (IEDCs) to support and award INR 10 lakhs to 20 student innovations. Uchhattar Avishkar Yojana, a joint MHRD-DST scheme has earmarked Rs. 250 crore annually to foster "very high quality" research amongst IIT students.
12) An annual incubator grand challenge
The government will identify and select ten incubators, evaluated on pre-defined Key Performance Indicators (KPIs) as having the the potential to become world class, and give them Rs.10 crore each as financial assistance to ramp up their infrastructure. For Action Plan-
http://dipp.nic.in/English/Investor/startupIndia/StartupIndia_ActionPlan_16January2016.pdf
At the end few lines from start up event:
- Passion and intention needed for business. Don't run just after the money, advises Adam Neumann
- In India, we will build a local brand with a global playbook: Adam Neumann
- This young generation in India will not only change India, but the world: Mr Neumann
- In India launching a startup is like Abhimanyu entering in to Chakravyuha"-- Economic Affairs Secretary Shaktikanta Das
- "You know I was richer than Bill Gates, then our share price went down, I recovered by passion, passion"--Softbank founder Masayoshi Son
- India can be bigger in momentum than China in next 10 years; 21st century belongs to India: Softbank CEO.
- What excites Mr Son about India: Smart people, young people, IT, Sunshine and ability to speak in English.
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