Lok Sabha Question No. 341 (UNSTARRED), answered on 2017-12-18
Subject: Startup India Programme
Ministry: COMMERCE AND INDUSTRY
Asked by: George Baker, GOPAL CHINAYYA SHETTY, HARI BABU KAMBHAMPATI, M. I. SHANAVAS, R. PARTHIPAN, KAUSHALENDRA KUMAR

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY

## DEPARTMENT OF INDUSTRIAL POLICY & PROMOTION

## LOK SABHA

## UNSTARRED QUESTION NO. 341. TO BE ANSWERED ON MONDAY, THE 18 TH  DECEMBER,  2017.

## STARTUP INDIA PROGRAMME

## 341.   SHRI GEORGE BAKER:

SHRI GOPAL SHETTY:

DR. KAMBHAMPATI HARIBABU:

SHRI M.I. SHANAVAS:

SHRI R. PARTHIPAN:

SHRI KAUSHALENDRA KUMAR:

Will the Minister of COMMERCE AND INDUSTRY be pleased to state:

## वाणिज्य एवं उद्योग मंत्री

- (a) the salient features of the Startup Programme along with the number of startup schemes  launched  by  the  Government  and  number  of  persons  likely  to  be benefitted therefrom so far, State/UT-wise including West Bengal;
- (b) the details of the funds sanctioned, allocated and utilised under this programme during the last three years across the country, State/UT-wise;
- (c) the  details  of  the  targets  set  and  achievements  made  under  this  programme during the said period along with its response period, State/UT-wise;
- (d) the details of the maximum limit of amount provided to one startup, at present; and
- (e) whether the Government is planning to increase this amount or the Government has received any proposal from some of the States to increase this and if so, the details thereof and the reasons therefor and the action taken by the Government in this regard, State/UT-wise?

## ANSWER

वाणिज् यएवंउद्योग मंत्रालयमेंराज् यमंत्री(श्री सी.आर.चौधरी) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY (SHR I C.R. CHAUDHARY )

- (a): The  salient  features  of  the  Startup  India  Action  Plan  launched  on  16 th January, 2016 by Government are provided at Annexure-I .

As on 1 st December, 2017, a total of 5350 Startups have been recognized by  Department  of  Industrial  Policy  and  Promotion  (DIPP)  for  availing benefits under Startup India initiative. The State/UT-wise list is enclosed at Annexure-II .

Under the Fund of Funds for Startups, 75 startups have received funding to the tune of Rs. 337.02 crore. Further, a total of 74 Startups have been given  tax  exemption  under  Section  80  IAC  of  Income  Tax  Act.    The Startup India Hub has resolved 75,643 queries so far and there are 15000 registered users on the Startup India Hub. The Learning and Development  module  of  the  Startup  India  program  has  been  used  by 1,89,000  individuals  so  far.  No  state/UT  wise  list  of  beneficiaries  is available in this regard.

- (b) to (e): Under the Startup India initiative, a Fund of Funds for Startups (FFS) with a corpus fund of INR 10,000 crore has been established for development and growth of innovation driven enterprises.  Till  date,  a  total  amount  of Rs. 600 crore has been released to SIDBI for the FFS. Rs. 605.7 crore has  been  committed  by  SIDBI  and  Rs.  90.62  crore  disbursed  to  17 Alternative Investment funds (AIFs), who in turn have invested Rs. 337.02 crore in 75 Startups. No maximum limit has been prescribed in respect of amount  to  be  provided  to  one  Startup  under  FFS.  The  achievements under the Startup India initiative are provided at Annexure III.

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## ANNEXURE  REFERRED  TO  IN  REPLY  TO  PART  (a)  OF  THE    LOK  SABHA UNSTARRED QUESTION NO. 341 FOR ANSWER ON 18 TH  DECEMBER, 2017.

## Features of Startup India Action Plan

|   S. No. | Action Point                                                                              | Objective                                                                                                                                                                                                                                                                          |
|----------|-------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        1 | Compliance Regime based on Self-Certification                                             | To reduce the regulatory burden on Startups thereby allowing them to focus on their core business and keep compliance cost low                                                                                                                                                     |
|        2 | Startup India Hub                                                                         | To create a single point of contact for the entire Startup ecosystem and enable knowledge exchange and access to funding                                                                                                                                                           |
|        3 | Rolling out of Mobile App and Portal                                                      | To serve as the single platform for Startups for interacting with Government and Regulatory Institutions for all business needs and information exchange among various stakeholders                                                                                                |
|        4 | Legal Support and Fast- tracking Patent Examination at Lower Costs                        | To promote awareness and adoption of IPRs by Startups and facilitate them in protecting and commercializing the IPRs by providing access to high quality Intellectual Property services and resources, including fast-track examination of patent applications and rebate in fees. |
|        5 | Relaxed Norms of Public Procurement for Startups                                          | To provide an equal platform to Startups across sectors vis-à-vis the experienced entrepreneurs/ companies in public procurement                                                                                                                                                   |
|        6 | Faster Exit for Startups                                                                  | To make it easier for Startups to wind up operations                                                                                                                                                                                                                               |
|        7 | Providing Funding Support through Fund of Funds with a Corpus of INR 10,000 crore         | To provide funding support for development and growth of innovation driven enterprises                                                                                                                                                                                             |
|        8 | Credit Guarantee fund for Startups                                                        | To catalyze entrepreneurship by providing credit to innovators across all sections of society                                                                                                                                                                                      |
|        9 | Tax Exemptions on Capital Gains                                                           | To promote investments into Startups by mobilizing the capital gains arising from sale of capital assets                                                                                                                                                                           |
|       10 | Tax Exemptions to startups for 3 Years                                                    | To promote the growth of Startups and address working capital requirements                                                                                                                                                                                                         |
|       11 | Tax Exemption on Investments above Fair Market Value                                      | To encourage seed-capital investment in Startups                                                                                                                                                                                                                                   |
|       12 | Organizing Startup Fests for Showcasing Innovation and Providing a Collaboration Platform | To galvanize the Startup ecosystem and to provide national and international visibility to the Startup ecosystem in India                                                                                                                                                          |
|       13 | Launch of Atal Innovation Mission (AIM)                                                   | To serve as a platform for promotion of world- class Innovation Hubs, Grand Challenges,                                                                                                                                                                                            |

| S. No.   | Action Point                                                                      | Objective                                                                                              |
|----------|-----------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|
|          |                                                                                   | Startup businesses and other self-employment activities, particularly in technology driven areas       |
| 14       | Harnessing Private Sector Expertise for Incubator Setup                           | To ensure professional management of Government sponsored / funded incubators.                         |
| 15       | Building Innovation Centers at National Institutes                                | To propel successful innovation through augmentation of incubation and R&D efforts                     |
| 16       | Setting up of New Research Parks Modeled on the Research Park Setup at IIT Madras | To propel successful innovation through incubation and joint R&D efforts between academia and Industry |
| 17       | Promoting Startups in the Biotechnology Sector                                    | To foster and facilitate bio-entrepreneurship                                                          |
| 18       | Launching of Innovation Focused Programs for Students                             | To foster a culture of innovation in the field of Science and Technology amongst students              |
| 19       | Annual Incubator Grand Challenge                                                  | To support creation of successful world class incubators in India                                      |

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## ANNEXURE-II

## ANNEXURE  REFERRED  TO  IN  REPLY  TO  PART  (a)  OF  THE    LOK  SABHA UNSTARRED QUESTION NO. 341 FOR ANSWER ON 18 TH  DECEMBER, 2017.

## State wise distribution of recognised Startups (as on 1 st December, 2017)

| State                       |   Number |
|-----------------------------|----------|
| Andaman and Nicobar Islands |        1 |
| Andhra Pradesh              |       91 |
| Arunachal Pradesh           |        2 |
| Assam                       |       46 |
| Bihar                       |       41 |
| Chandigarh                  |       29 |
| Chhattisgarh                |       66 |
| Dadra and Nagar Haveli      |        3 |
| Daman and Diu               |        1 |
| Delhi                       |      748 |
| Goa                         |       19 |
| Gujarat                     |      289 |
| Haryana                     |      268 |
| Himachal Pradesh            |        9 |
| Jammu and Kashmir           |       16 |
| Jharkhand                   |       35 |
| Karnataka                   |      853 |
| Kerala                      |      182 |
| Madhya Pradesh              |      101 |
| Maharashtra                 |     1079 |
| Manipur                     |        3 |
| Nagaland                    |        5 |
| Orissa                      |      105 |
| Pondicherry                 |        3 |
| Punjab                      |       31 |
| Rajasthan                   |      139 |
| Tamil Nadu                  |      301 |
| Telangana                   |      296 |
| Uttar Pradesh               |      383 |
| Uttarakhand                 |       42 |
| West Bengal                 |      163 |
| Total recognitions          |     5350 |

*****

## ANNEXURE-III

## ANNEXURE REFERRED TO IN REPLY TO PARTS (b) TO (e) OF THE  LOK SABHA UNSTARRED QUESTION NO. 341 FOR ANSWER ON 18 TH  DECEMBER, 2017.

## 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  selfcertifications  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
- o Advertising space for Startups
- o Learning & development module
-  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.
-  Startup  India  online  hub  was  launched  on  19.6.2017  to  serve  as  a  platform where  all  the  stakeholders  of  the  Startup  ecosystem  can  collaborate  and synergise  their  efforts.  It  will  facilitate  location-wise  and  sectoral  mapping. 15,000+ registrations have been achieved on the Hub as of November, 2017.
3.  Startup India Hub
-  75,000+ queries have been handled by the Startup India Hub
-  450+ Startups have been mentored for incubation and funding support
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 filing of patents and trademarks
-  415 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 87 Startups have been facilitated
-  Trademark facilitation has been extended to 473 Startups

## 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 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 INR 10,000 crore
2.  Fund of Funds for Startups of INR 10,000 crore shall be released over two Finance Commission cycles, that is, by the year 2025
3.  INR 500 crore has been released to SIDBI in FY16 and INR 100 crore in FY 17
4.  Total  commitments  under  FFS  stand  at  INR  605.7  crore  to  17  Alternative Investment Funds (AIFs) while drawdown by AIFs is INR 90.62 crore
5.  75 Startups have received funding under FFS with catalysed investment of INR 337.02 crore
8.  Tax Exemption on Capital Gains
7.  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 INR 50 lakh in  a financial year) invested in a fund notified by Central Government
8.  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
10.  Provision  has  been  made  in  the  Finance  Act,  2016  Section  80-IAC  for Startups (Companies and LLPs) to avail income tax exemption for 3 years in a block of 5 years, if they are incorporated between 1 st April  2016 and 31 st March 2019.
11.  In the Union Budget 2017-18, the Government has increased this period of profit-linked  deductions  available  to  eligible  Startups  to  7  years.  Startup  is eligible  to  avail  income  tax  exemption  for  three  consecutive  assessment years out of a block of seven years, which was earlier five years.
12.  75 Startups 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 INR 12 Lakh each has been disbursed to 374 tinkering labs
-  6 existing Incubators have been sanctioned for scale-up grant by NITI Aayog
-  13 New Incubators approved for funding support

## 12.  Building Innovation Centres at National Institutes

-  15  Startup  Centres  are  being  jointly  set  up  by  Department  of  Science  and Technology (DST) and Ministry  of  Human  Resource  Development  (MHRD), and approval for all 15 is in place
-  Amount of INR 37.50 lakh (INR 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 INR 42 crore have been sanctioned and INR 17 crore disbursed to TBIs

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

-  IIT Kharagpur at a cost of INR 100 crore is under construction and INR 74.83 Cr. released to IIT Kharagpur
-  IIT Mumbai at a cost of INR 100 crore is under construction and INR 34 Cr. released to IIT Bombay
-  The Research Park at IIT Gandhinagar has been sanctioned by DST at a total cost of INR 90 crore and the Department has already disbursed instalment of INR 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 INR 375 Crore for a period of 3 years.

## 14.  Promoting Startups in the Biotechnology Sectors

-  Department  of  Biotechnology  (DBT)  has  sanctioned  INR  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 INR 185 crore  sanctioned and INR 119 crore disbursed. The impact has been multifold  as  a  total  of  290  start-ups  have  received  benefits  from  these  bioincubators  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 in the process of joining the Harvard University, USA to share ideas and receive mentorship

## 15.  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 Rashtrapati Bhavan 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) Uchhattar Avishkar Yojana (UAY)
-  INR 475 crore for 2016-18 has been earmarked for 3 years
-  INR 75 crore has been disbursed for research proposals from IITs under 6 domains
-  92 projects have been recommended for approval

## 16.  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 INR 50 lakh to INR 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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