Lok Sabha Question No. 280 (UNSTARRED), answered on 2018-02-05
Subject: Registered Start-up
Ministry: SKILL DEVELOPMENT AND ENTREPRENEURSHIP
Asked by: MALLIKARJUN  KHARGE

## MINISTRY OF SKILL DEVELOPMENT AND ENTREPRENEURSHIP

## GOVERNMENT OF INDIA LOK SABHA

## UNSTARRED QUESTION NO. 280 TO BE ANSWERED ON 05.02.2018 REGISTERED START-UP

## 280. SHRI MALLIKARJUN KHARGE:

## Will the Minister of SKILL DEVELOPMENT AND ENTREPRENEURSHIP be pleased to state:

- (a) the number of start-ups that have been registered since 2014;
- (b) the top 5 sectors in which the maximum number of start-ups have opened up since 2014;
- (c) whether any support has been provided by the Government to these start-ups;
- (d) if so, the details thereof; and
- (e) the  details  of  the  top  5  States  where  the  maximum number of start-ups have opened since 2014 along with the data?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF SKILL DEVELOPMENT AND ENTREPRENEURSHIP (SHRI ANANTKUMAR HEGDE)

- (a) The Startup India program was launched by Department of Industrial Policy & Promotion,  Ministry  of  Commerce  &  Industry  in  January  2016.  Since  the  launch,  a total of 6,606 Startups have been recognised under the Startup India initiative till 28 th January 2018.
- (b) The top 5 sectors in which the maximum number of recognised Startups have opened up are as under:-
- (i) IT Services
- (ii) Healthcare & Life sciences
- (iii) Education
- (iv) Professional & Commercial Services
- (v) Food & Beverages
- (c) & (d) Several  incentives  are  made  available  to  Startups  by  Government  of India under the Startup India initiative. The details of the support provided are given at Annexure-I .
- (e) Details  of  the  top  5  States  in  which  the  maximum  number  of  start-ups  have been recognized are given at Annexure-II.

## Details of the support provided to Startups under Startup India action plan 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 06.04.2017 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:
- Startup  recognition  -  6,606  Startups  have  been  recognised  till  28 th January 2018.
- Advertising space for Startups.
- Learning & development module - over 1,95,000 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. The mobile app has been downloaded by more than 1,00,000 users.

## 3.  Startup India Hub

- 80,000+ queries have been handled by the Startup India Hub.
- 450+ Startups have been mentored for incubation and funding support.
- Startup India online hub was launched on 19.06.2017 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. 23,000+ registrations have been achieved on the Hub as of January, 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 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  16.06.2017  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.

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

- Fund of  Funds  for  Startups  of  INR  10,000  crore  shall  be  released  over  two Finance Commission cycles, that is, by the year 2025.
- INR 500 crore has been released to SIDBI in FY16 and INR 100 crore in FY 17.
- Total  commitments  under  FFS  stand  at  INR  900.5  crore  to  22  Alternative Investment  Funds  (AIFs)  while  drawdown  by  AIFs  is  INR  113.49  crore.  97 Startups have received funding under FFS with catalysed investment of INR 406.66 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 INR 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 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.
- 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. 78 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.

## 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.

## 12.  Harnessing Private Sector Expertise for Incubator Setup

- 6 existing Incubators have been sanctioned scale-up grant of INR 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  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  installment  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.

## 14.  Setting up of 7 New Research Parks modeled 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 installment 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.

## 15.  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 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 in the process of 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 Rashtrapati Bhavan from 4 th - 10 th 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-inResidence) 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.

## 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'.
- The  upper  limit  for  number  of  angel  investors  in  a  scheme  has  been increased from forty nine to two hundred.
- Angel  Funds  will  be  allowed  to  invest  in  start-ups  incorporated  within  five years, which was earlier 3 years.
- 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.
- The lock-in  requirements  of  investment  made  by  Angel  Funds  in  a  venture capital undertaking has been reduced from three years to one year.
- Angel Funds are allowed to invest in overseas venture capital undertakings upto 25% of their investible corpus in line with other AIFs.

## State-wise Startup details for Top 5 States

Out  of  the  6,606  recognized  Startups,  the  top  5  states  are  Maharashtra, Karnataka, Delhi, Uttar Pradesh and Telangana. The breakup of the Startups across these states are as under:-

|   S.No. | State         |   Number of Startups Recognised |
|---------|---------------|---------------------------------|
|       1 | Maharashtra   |                            1317 |
|       2 | Karnataka     |                            1052 |
|       3 | Delhi         |                             894 |
|       4 | Uttar Pradesh |                             487 |
|       5 | Telangana     |                             388 |

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