Lok Sabha Question No. 4604 (UNSTARRED), answered on 2018-03-23
Subject: Loan under Start Up India
Ministry: FINANCE
Asked by: VINOD KUMAR SONKAR

## Govt. of India Ministry of Finance Department of Financial Services

## LOK SABHA UNSTARRED QUESTION No. 4604

## TO BE ANSWERED ON THE 23 rd  MARCH, 2018/Chaitra 2, 1940 (Saka)

## Loan under Start Up India

## 4604. SHRI VINOD KUMAR SONKAR:

Will the Minister of FINANCE be pleased to state :

(a) the present status of the Start Up India Scheme;

- (b)  whether  the  Government  has  set  any  target  facilitating  scheduled  caste/ scheduled tribe and women entrepreneurs through banks across the country under Start Up India Scheme and if so, the details of the banks which have achieved the said target, bank/State/UT-wise;

(c) the time by which the said target is likely to be achieved by the banks; and

(d)  whether  the  Government is conducting review of the said scheme, if so, the details thereof and the number of banks which are not taking any interest in the said scheme along with the action taken against them?

## ANSWER

## To be answered by (MINISTER OF STATE IN THE MINISTRY OF FINANCE) (SHRI SHIV PRATAP SHUKLA )

(a): The present status of Startup India Scheme since its inception is provided at Annexure-I. So far, 7987 Startups have been recognised under the Startup India initiative.

(b)  &(c): The  benefits  under  the  Startup  India  initiative  are  available  to  all entrepreneurs belonging to any caste, community and gender (including schedule caste/  schedule  tribe  and  women  entrepreneurs).  Currently,  there  is  no  scheme under the Startup India initiative that is administered through banks and hence no target has been set for the purpose.

(d): A Monitoring Committee chaired by Secretary, Department of Industrial policy & Promotion has been constituted for effective monitoring of the implementation of the Action Plan of Startup India initiative

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## Achievements under the Startup India initiative

## Simplification and Handholding

## 1. Compliance Regime based on Self-Certification

-  List  of  36  industries  in  'white'  category  has  been  published  on  CPCB's  website. CPCB has exempted such industries from all the applicable self-certifications under 3 Environment related Acts listed in the Startup India Action Plan
-  Ministry of Skill Development and Entrepreneurship (MSDE) has issued advisory to states  to  allow  Startups  to  self-certify  compliance  with  the  Apprenticeship  Rules, 1992 of Apprenticeship Act, 1961
-  Startups have been allowed to self-certify compliance in respect of 6 Labour laws; 26 states have confirmed compliance to the advisory issued on 12.01.2016 and new advisory issued on 6.4.2017 by Ministry of Labour and Employment (MoLE)

## 2. Rolling out of Mobile App and Portal

-  Startup India portal has been developed to provide access to the following:
- o Startup recognition - 8183 Startups have been recognised till 14 th  March 2018
- o Advertising space for Startups
- o Learning & development module - over 1,97,000 registrations achieved
-  The  portal  acts  as  a  one  stop  solution  for  all  queries  related  to  the  Startup  India initiative
-  Startup  India  mobile  app  has  been  developed  to  provide  on  the  go  services  and information to users.

## 3. Startup India Hub

-  84,000+ queries have been handled by the Startup India Hub
-  460+ Startups have been mentored for incubation and funding support
-  30,000+ registrations have been achieved on the Hub as of February, 2018.

## 4. Legal Support and Fast-tracking Patent Examination at Lower Costs

-  423 facilitators for Patent and Design and 596 facilitators for Trademark applications  have  been  empanelled  to  assist  Startups  in  fling  of  patents  and trademarks
-  768 applications  have  received  rebate  of  up  to  80%  on  patent  fees  and  have  also received legal assistance
-  Patent  filing  has  been  made  faster  for  Startups  and  accordingly  126Startups  have been facilitated
-  Trademark facilitation has been extended to 858Startups as of January, 2018

## 5. Relaxed Norms of Public Procurement for Startups

-  Relaxed norms for public procurement for micro, small and other enterprises have been  provisioned  in  the  Procurement  Policy  by  the  Ministry  of  Micro,  Small  and Medium Enterprise
-  All  Central  Ministries  /  Departments  /Department  of  Public  Enterprises/  Central Public  Sector  Undertakings  have  been  authorised  to  relax  conditions  of  prior experience  and  prior  turnover  with  respect  to  MSEs  in  all  public  procurements subject to meeting quality and technical specifications
-  Further,  Rule  173(i)  has  been  incorporated  in  GFR,  2017  which  provides  for relaxation of conditions of prior turnover and prior experience for Startups,  and
-  Rule 170(i) of GFR 2017 has been amended on 25th July 2017 allowing all Startups

## Annexure- I

as recognized by DIPP exemption from submission of Earnest Money Deposit/Bid Security in public procurement tenders

## 6. Faster Exit for Startups

-  Insolvency and Bankruptcy Board has been constituted
-  MCA has  notified  the  relevant  sections  55  to  58  of  Insolvency  and  Bankruptcy Code, 2016 pertaining to the Fast Track process on 16.6.2017 and also notified that the  process  shall  apply  to  Startup  (other  than  the  partnership  firm)  as  defined  by DIPP. For Startups, Insolvency Resolution process to be completed within 90 days as against 180 days for other entities.

## Funding Support and Incentives

## 7. Providing  Funding  Support  through  Fund  of  Funds  (FFS)  with  a  Corpus  of  Rs. 10,000 crore

-  Fund of Funds for Startups of Rs. 10,000 crore shall be released over two Finance Commission cycles, that is, by the year 2025
-  Rs. 500 crore has been released to SIDBI in FY16 and Rs. 100 crore in FY 17
-  Total commitments  under  FFS  stand  at  Rs.1050.7  crore  to  24  Alternative Investment Funds (AIFs) while drawdown by AIFs is Rs.122.86 crore
-  109  Startups  have  received  funding  under  FFS  with  catalysed  investment  of Rs.517.92 crore

## 8. Tax Exemption on Capital Gains

-  Section 54 EE has been introduced under the Finance Act, 2016 which provides for exemption  of  capital  gain  arising  out  of  transfer  of  long  term  capital  asset  (not exceeding Rs. 50 lakh in   a financial year) invested in a fund notified by Central Government
-  Section 54 GB of Income-tax Act, 1961 has been amended to provide exemption from tax on capital gains arising out of sale of residential house or a residential plot of land if the amount of net consideration is invested in equity shares of an eligible Startup for utilizing the same to purchase specified asset.

## 9. Tax Exemption to Startups for 3 Years

-  Provision has been made for Startups (Companies and LLPs) to avail income tax exemption for 3 years in a block of 7 years, if they are incorporated between 1 st April 2016 and 31 st  March 2019.
-  87Startups have been approved for availing tax benefits

## 10. Tax Exemption on Investments above Fair Market Value

##  Removal of Angel Tax

Tax  exemption  on  investment  above  Fair  Market  Value  has  been  introduced  on 14th June 2016.

## Industry-Academia Partnership and Incubation

## 11. Launch of Atal Innovation Mission (AIM)

-  941 schools selected for establishing tinkering labs and Rs. 12 Lakh each has been disbursed to 374 tinkering labs

## 12. Harnessing Private Sector Expertise for Incubator Setup

-  6 existing Incubators have been sanctioned scale-up grant of Rs. 2.5 crore each by NITI Aayog
-  13 New Incubators approved for funding support by NITI Aayog

## 13. Building Innovation Centres at National Institutes

-  15 Startup Centres have been approved for joint set up by Department of Science
- and Technology (DST) and Ministry of Human Resource Development (MHRD)
-  Amount of Rs.  37.50  lakh  (Rs.  3.75  lakh  each  for  10  Startup  Centres)  has  been released as 1st instalment of the grant for 10 Startup Centres by MHRD
-  11 TBIs (Technology Business Incubators) have been approved and Rs. 42 crore have been sanctioned and Rs. 17 crore disbursed to TBIs

## 14. Setting  up  of  7  New  Research  Parks  modelled  on  the  Research  Park  Setup  at  IIT Madras

-  IIT Kharagpur at a cost of Rs. 100 crore is under construction and Rs. 74.83 Cr. released to IIT Kharagpur
-  IIT Mumbai at a cost of Rs. 100 crore is under construction and Rs. 34 Cr. released to IIT Bombay
-  The Research Park at IIT Gandhinagar has been sanctioned by DST at a total cost of Rs. 90 crore and the Department has already disbursed instalment of Rs. 40 crore
-  5 more Research Parks at IIT Kanpur, IIT Delhi, IIT Guwahati, IIT Hyderabad and IISc  to  be  supported  by  MHRD  approved  with  a  budget  of  Rs.  375  Crore  for  a period of 3 years.

## 15. Promoting Startups in the Biotechnology Sectors

-  Department  of  Biotechnology  (DBT)  has  sanctioned  Rs.  1  crore  under  Biotech Equity fund to be given to each bio-incubator. The initiative has already helped 3 Bio-incubators that have been selected as recipients of the above mentioned Equity Fund.
-  30 bio-incubators have been supported through funding support with Rs. 185 crore sanctioned and Rs. 119 crore disbursed. The impact has been multi-fold as a total of 290  start-ups  have  received  benefits  from  these  bio-incubators  under  various programmes like Biotechnology Ignition Grant, IIPME, Sparsh, Grand Challenges, BioNEST, etc.
-  In  respect  of  Bengaluru-Boston  Biotech  Gateway  to  India:  4  entrepreneurs  have joined  and  1  is  joining  the  Harvard  University,  USA  to  share  ideas  and  receive mentorship

## 16. Launching of Innovation Focused Programs for Students

- (a) Innovation Core program with an outreach to 10 lakh innovations from 5 lakh schools
-  4 regional workshops organized & revamped MANAK  (Million Minds Augmenting National Aspiration and Knowledge) approved
-  Over  1  lakh  INSPIRE  (Innovation  in  Science  Pursuit  for  Inspired  Research  ) Awardees competed at District & State Level
-  588 were selected to participate in the 6th National Level Exhibition and Project Competition, Delhi
-  Top  60  projects  were  showcased  at  the  Annual  Festival  of  Innovations  in RashtrapatiBhavan from 4th-10th March 2017
- (b) NIDHI  (National  Initiative  for  Developing  and  Harnessing  Innovation)-  Grand challenge program
-  19 new TBIs established
-  9 TBIs supported for Seed Support System (SSS)
-  10 NIDHI-PRAYAS (Promoting and Accelerating Young and Aspiring technology entrepreneurs) and 10 NIDHI-EIR (Entrepreneurs-in- Residence) sanctioned
-  6 new centres of excellence (COEs) have been recommended to receive funds for COEs in FY2017-18
- (c) UchhattarAvishkarYojana (UAY)
-  Rs. 475 crore for 2016-18 has been earmarked for 3 years
-  Rs. 75 crore has been disbursed for research proposals from IITs under 6 domains
-  92 projects have been recommended for approval

## 17. Other incentives :

-  External  Commercial  Borrowing  (ECB)  guidelines  for  Startups:  Startups  can borrow up to $3 million or equivalent per financial year, either in rupees, or any convertible  foreign  currency  or  a  combination  of  both,  for  a  minimum  average maturity period of three years
-  Foreign  venture  capital  investors  (FVCI)  are  now  allowed  to  invest  in  Startups irrespective of any sector without Reserve Bank of India's approval
-  SEBI (Foreign Portfolio Investors) Regulations, 2014 have been amended to permit FPIs to invest in unlisted Non-Convertible  debentures  and  securitised debt instruments
-  The  SEBI  Board  has  approved  five  key  amendments  to  SEBI  (Alternative Investment Funds) Regulations, 2012 with respect to 'Angel Funds':
- o The upper limit for number of angel investors in a scheme has been increased from forty nine to two hundred
- o Angel  Funds  will  be  allowed  to  invest  in  start-ups  incorporated  within  five years, which was earlier 3 years.
- o The  requirement  of  minimum  investment  amount  by  an  Angel  Fund  in  any venture capital undertaking has been reduced from Rs. 50 lakh to Rs. 25 lakh.
- o The  lock-in  requirements  of  investment  made  by  Angel  Funds  in  a  venture capital undertaking has been reduced from three years to one year.
- o Angel  Funds  are  allowed  to  invest  in  overseas  venture  capital  undertakings upto 25% of their investible corpus in line with other AIFs.

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