Lok Sabha Question No. 95 (UNSTARRED), answered on 2017-07-17
Subject: Start-up India Programme
Ministry: COMMERCE AND INDUSTRY
Asked by: KOTHA PRABHAKAR REDDY, GOPAL CHINAYYA SHETTY, BHEEMRAO BASWANTHRAO PATIL

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT OF INDUSTRIAL POLICY & PROMOTION

## LOK SABHA

UNSTARRED QUESTION NO. 95.

TO BE ANSWERED ON MONDAY, THE  17 TH  JULY, 2017.

## START-UP INDIA PROGRAMME

95. SHRI PRABHAKAR REDDY KOTHA: SHRI GOPAL SHETTY: SHRI BHEEMRAO B. PATIL:

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

## वाणिज् यवव द्यग ं ्री

- (a) the extent to which the Government has achieved the aims and objectives of the Start-up India Programme being implemented in the country;
- (b) whether  the  Government  proposes  to  introduce  certain  schemes  including Credit Guarantee Fund to enable Start-ups to get collateral free loans for their operations in the country;
- (c) if  so,  the  details  thereof  including  the  terms  and  conditions  of  the  schemes; and
- (d) the  details  of  other  financial  support  and  incentives  being  extented  to  the Start-ups in the country?

## ANSWER

## वाणिज् यवव द्यग ााज् यं ्रीस् वतं ््रभााा(स्रींतंरीिरंमलााीरीतंाांि( THE MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF COMMERCE & INDUSTRY (SHRIMATI NIRMALA SITHARAMAN)

- (a): In order to incentivize and support entrepreneurs, Government of India launched  the  Startup  India  programme  on  16  January,  2016.  The Government through this initiative aims to empower Startups to grow through  innovation  and  design.  Details  of  the  present  status  of  the progress  made  under  'Startup  India'  programme  are  annexed  as Annexure I.
- (b) & (c): Yes, Madam. The Credit Guarantee Scheme for Startups (CGSS) with a corpus contribution of INR 2000 crores is proposed keeping in mind the  challenges  faced  by  Startups  in  accessing  funds.  The  proposed scheme  will  provide  credit  guarantee  upto  Rs.  500  lakhs  per  case inclusive  of  term  loan,  working  capital  or  any  other  instrument  of assistance extended by Member Lending Institutions (MLIs) to finance an  eligible  borrower  i.e.  a  Startup  recognized  by  Department  of Industrial Policy and Promotion (DIPP).
- (d): Details have been provided under 'Funding support and incentives' at Annexure I.

******

## ANNEXURE REFERRED TO IN REPLY TO PARTS (a) AND (d) OF THE LOK  SABHA  UNSTARRED  QUESTION  NO.  95  FOR  ANSWER  ON 17.07.2017

## Progress under Startup India Program

## 1.  Simplification and Handholding

- i. Startup  definition  has  been  amended  whereby  an  entity  shall  be considered  a  'Startup'  up  to  7  years  (earlier  5  years).  In  respect  of Biotechnology sector, however, an entity shall be considered a 'Startup'  up  to  10  years.  Further,  no  letter  of  recommendation  is required while applying for recognition and tax benefits.
- ii. Faster  exit  for  Startups  has  been  provided  for  which  allows  Startup companies  to wind up business within 90 days vis-à-vis other companies
- iii. To ease the compliance regime for Startups, all States/UTs have been advised to allow them to self-certify compliance under 6 Labour laws for a period of 5 years from the date of their incorporation. 36 industries have been placed in white category under which startups are allowed to  self-certify  compliance for three years under 3 environment-related Acts.
- iv. Startup India Hub has been established to resolve queries (over email, Twitter and calls) and provide handholding support to Startups.  Over 57000 queries have been answered & 410 Startups facilitated by the Startup  India  Hub  as  on  11th  July  2017.  An  online  version,  Startup India Online Hub has also been launched to serve as a platform where all  the  stakeholders  of  the  Startup  ecosystem  can  collaborate  and synergise their efforts.
- v. Launched in January 2016, Scheme for Facilitating Start-Ups Intellectual Property Protection (SIPP) has now been extended further till  31.3.2020. Facilitators have been empanelled to assist startups file for  patents,  trademarks  or  designs,  with  the  Government  bearing  the cost of these facilitators. Apart from this, an 80% rebate in fee for filing Trademark  applications  has  been  provided  to  startups.  470  Startups have already benefitted from these measures.
- vi. To  ensure  a  level  playing  field  for  Startups  in  public  procurement, Department  of  Expenditure  relaxed  conditions  of  prior  turnover  and experience for  all  Startups.  The  same  has  also  been  incorporated  in General Financial Rules 2017.
- vii. A free  online  Learning  and  Development  Module  has  been  launched with  6  modules  on  entrepreneurship.  Over  1,45,000  applicants  have signed up for the course.

## 2.  Funding Support and Incentives

- viii. Fund  of  Funds  for  Startups  with  a  corpus  of  INR  10,000  crores managed  by  SIDBI  has  been  created,  to  be  released  by  SIDBI  by
2025.  So  far,  SIDBI  has  committed  INR  623.5  cr.  to  17  AIFs  under FFS.  Out  of  this,    Rs.  55.00  crore  has  been  disbursed  and  a  total investment of INR 252.20 cr. has been made in Startups.
- ix. Credit  Guarantee  Scheme  is  proposed  to  be  set  up,  managed  by NCGTC, to provide debt funding to Startups. A corpus contribution of INR 2000 crore is envisaged.
- x. Key tax exemptions and regulatory benefits have been provisioned for Startups, including Income Tax Exemption for 3 years out of a block of 7  years,  Tax  Exemption  on  Capital  Gains  (Section  54  EE),  Tax exemption on Investments made in Startups above Fair Market Value.
- xi. Among other key regulatory benefits, Startups have been permitted to raise external commercial borrowings of upto $3mn in a financial year. Angel  funds  are  now  allowed  to  invest  up  to  25%  of  their  corpus  in overseas  undertaking.  Upper  limit  for  number  of  angel  investors  in  a scheme has been increased from 49 to 200. Minimum investment by an angel fund in a Startup has been reduced from INR 50 lakhs to 25 lakhs.

## 3.  Industry-Academia Partnership and Incubation

- xii. 457 schools have been selected for establishing tinkering labs. 10 new Incubation  centers  have  been  approved  to  receive  grant  in  FY16-17. Also, 6 existing Incubators have been sanctioned scale-up grant of INR 2.5 cr.
- xiii. 15 Startup Centers are being established with first grant on INR 3.75 lakh released to 10 centers. Also, 15 TBIs are being set up jointly by DST and MHRD; INR 34.92 crore has been sanctioned and INR 15.3 crore disbursed.
- xiv.   8 New research parks are being established.
- xv. Promoting  Startups  in  the  Biotechnology  Sector:  3  bio  clusters  have been  funded;  INR  276  crore  has  been  sanctioned  and  INR  92  crore disbursed.  Landscaping  study  for  Technology  Transfer  Offices  has been  initiated.  3  bio  incubators  have  been  selected  as  recipients  of Biotech Equity Fund of INR 1 crore each. Also, under the BengaluruBoston Biotech Gateway, 4 entrepreneurs have joined and 1 is in the process of joining the Harvard University, USA
- xvi. Launching  of Innovation  Focused  Programs  for  Students:  Under Ucchatar Aavishkar Yojana, 92 proposals from various IITs have been approved.  Under  National  Initiative  for  Developing  and  Harnessing Innovations (NIDHI), 19 new TBIs have been established and 9 have been provided seed support.
6. ******