Lok Sabha Question No. 2587 (UNSTARRED), answered on 2019-12-04
Subject: Start up India
Ministry: COMMERCE AND INDUSTRY
Asked by: Sumedhanand Saraswati

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE

## LOK SABHA

## UNSTARRED QUESTION NO. 2587.

TO BE ANSWERED ON WEDNESDAY, THE 04 TH  DECEMBER, 2019.

## START UP INDIA

## 2587.  SHRI SUMEDHANAND SARASWATI:

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

वाणिज्य

## एवं उद्योग मंत्री

- (a) whether  the  scheme  called  startup  is  being  run  by  the  Government  in  the country and if so, the details thereof;
- (b) the salient features of this scheme and the details with regard to the rules and eligibility conditions for availing the benefits of this scheme;
- (c) the  number  of  beneficiaries  under  this  scheme  in  the  country  including  the State of Rajasthan; and
- (d) the number of startups registered so far and the number of startups, out of the total startups that proved successful along with the positive results achieved under this scheme and the details thereof?

## ANSWER वाणिज ् य एवं उद्योग मंत्री ( श्री पीयूष गोयल ) THE MINISTER OF COMMERCE & INDUSTRY (SHRI  PIYUSH GOYAL)

- (a) & (b): Startup India is a flagship initiative of the Government of India, intended to build  a  strong  eco-system  for  nurturing  innovation  and  Startups  in  the country  that  will  drive  sustainable  economic  growth  and  generate  large scale  employment  opportunities.  The  Government  through  this  initiative aims to empower Startups to grow through innovation and design.

Start-up  India  initiative  launched  on  16th  January  2016,  consists  of  19 Action  Points  that  act  as  a  guiding  document  for  the  initiative.  Salient features  of  these  action  points  are  appended  as  Annexure  I.  The  rules and eligibility conditions for a Startup to avail the benefit of this scheme are appended as Annexure II.

- (c) & (d): As on 26th November 2019, there are 25,115 recognized startups in India including  713  recognized  startups  in  Rajasthan.  The  data  on  number  of successful  Startups  is  not  centrally  compiled,  however,  details  of  the positive  results  achieved  under  Startup  India  initiative  is  appended  as Annexure III.

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## ANNEXURE REFERRED TO IN REPLY TO PARTS (a) & (b) OF THE LOK SABHA UNSTARRED QUESTION NO. 2587 FOR ANSWER ON 04.12.2019.

## Salient features of Startup India action plan

1. Compliance  Regime  based  on  Self-Certification with  an  objective  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 with an objective 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 with  an  objective  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 with an  objective  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  fasttrack examination of patent applications and rebate in fees.
5. Relaxed Norms of Public Procurement for Startups with  an  objective  to provide an equal platform to Startups across sectors vis-à-vis the experienced entrepreneurs/ companies in public procurement.
6. Faster Exit for Startups with an objective to make it easier for Startups to wind up operations.
7.  Providing Funding Support through Fund of Funds with a Corpus of RS. 10,000  crore with  an  objective  to  provide  funding  support  for  development and growth of innovation driven enterprises.
8.  Credit Guarantee fund for Startups with objective to catalyze entrepreneurship  by  providing  credit  to  innovators  across  all  sections  of society.
9.  Tax Exemptions on Capital Gains with an objective to promote investments into Startups by mobilizing the capital gains arising from sale of capital assets.
10.  Tax  Exemptions to startups for 3 Years with  an  objective  to  promote the growth of Startups and address working capital requirements.
11.  Tax Exemption on Investments above Fair Market Value with an objective to encourage seed-capital investment in Startups.
12.  Organizing  Startup  Fests  for  Showcasing  Innovation  and  Providing  a Collaboration Platform with an objective 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) with  an  objective  to  serve  as  a platform  for  promotion  of  world-class  Innovation  Hubs,  Grand  Challenges, Startup businesses and  other self-employment activities, particularly in technology driven areas.
14.  Harnessing Private Sector Expertise for Incubator Setup with an objective to  ensure  professional  management  of  Government  sponsored  /  funded incubators, Government will create a policy  and framework for setting-up of incubators across the country in public private partnership.
15.  Building  Innovation  Centers  at  National  Institutes with  an  objective  to propel  successful  innovation  through  augmentation  of  incubation  and  R&D efforts. 16.  Setting  up  of  7  New  Research  Parks  Modelled  on  the  Research  Park Setup at IIT Madras with an objective to propel successful innovation through incubation and joint R&D efforts between academia and Industry. 17.  Promoting Startups in the Biotechnology Sector with an objective to foster and facilitate bio-entrepreneurship. 18.  Launching  of  Innovation  Focused  Programs  for  Students with an objective  to foster  a  culture  of  innovation  in  the  field  of  Science  and Technology amongst students. with an objective to support creation of
19. Annual Incubator Grand Challenge successful world class incubators in India.

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## ANNEXURE REFERRED TO IN REPLY TO PARTS (a) & (b) OF THE LOK SABHA UNSTARRED QUESTION NO. 2587 FOR ANSWER ON 04.12.2019.

## Rules and eligibility conditions for a Startup

'An entity shall be considered as a Startup:

- i. Upto a period of ten years from the date of incorporation/ registration, if it is incorporated as a private limited company  (as  defined  in the Companies  Act,  2013)  or  registered  as  a  partnership  firm  (registered under  section  59  of  the  Partnership  Act,  1932)  or  a  limited  liability partnership (under the Limited Liability Partnership Act, 2008) in India.
- ii. Turnover of the entity for any of the financial years since incorporation/ registration has not exceeded one hundred crore rupees.
- iii. Entity  is  working  towards  innovation,  development  or  improvement  of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.

Provided  that  an  entity  formed  by  splitting  up  or  reconstruction  of  an existing business shall not be considered a 'Startup'.'

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## ANNEXURE REFERRED TO IN REPLY TO PARTS (c) & (d) OF THE LOK SABHA UNSTARRED QUESTION NO. 2587 FOR ANSWER ON 04.12.2019.

## Positive results achieved under Startup India initiative

## 1.   Compliance Regime based on Self-certification

Startups  recognised  under  Startup  India  initiative  can  self-certify  their  compliance against the 6 labour laws and 3 environmental laws.

-  15 States have implemented self-certification for 5 years and 12 States have implemented self certification for 3 years. 9 States/UTs are yet to implement the self-certification.
-  9 States (Haryana, Madhya Pradesh, Maharashtra, Rajasthan, Gujarat, Uttar Pradesh, Punjab, Uttarakhand, and Delhi) have integrated their portals  with Shram Suvidha Portal
-  169 DPIIT recognized Startups have availed the benefits of self-certification.

## 2.  Startup India Hub

-  Startup India works in a hub and spoke model and collaborates with Central & State governments, Indian and foreign VCs and ecosystem stakeholders
-  Startups are assisted through their lifecycle with a specific focus on important aspects like obtaining financing, feasibility testing, business structuring advisory and enhancement of marketing skills
-  Startup India  has  organized  mentorship  programs  in  collaboration  with government organizations, incubation centers, and educational institutions
-  1,57,138 queries  have been addressed by the Startup India team as of 22 nd November 2019.

## 3   Startup India Portal and Mobile App

-  3,60,406  users  registered  on  the  Startup  India  Portal  as  of  22 nd November 2019.
-  2,54,339  aspiring  and  existing  entrepreneurs  logged  in  for  the  learning  and development course as of 22 nd November 2019.
-  6,948 mentor, investor and incubator connections have been established through the portal for Startups as of 25 th November 2019.
-  More  than  175  Innovation  Hunts  and  programs  have  been  hosted  on  the Startup India portal by various government departments and corporates as of 25 th November 2019.

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

-  Startups  are  eligible  for  80%  rebate  in  patent  filing  fees  and  50%  rebate  in trademark filing fees. Additionally, Startups are also considered for expedited examination of patent applications to reduce time taken in granting patents.
-  1,031 Facilitators have been empanelled for free of cost filing & facilitation
-  1,630 patent applications have been granted 80% rebate on filing fee.
-  2,895 trademark applications have been granted 50% rebate on fill fee.
-  474 applications were granted expedited examination

## 5.  Relaxed Norms of Public Procurement for Startups

-  Startups  have  been  exempted  from  submitting  Earnest  Money  Deposit requirements (Jul'17)
-  Public procurement norms have been relaxed for startups through exemptions on (Nov'16)
- o Prior turnover criteria; and
- o Prior experience criteria

Applicable on all tenders issued by Central Ministries and Central Public Service Undertakings (CPSUs)

-  GeM 'Startup Runway' has been launched  - dedicated  for startups  to  sell products  and  services  to  Government  (Feb'19)- 2,804  Startups  have  been registered  on  GeM; 13,666  orders  have  been  placed  to  startups;    value  of orders served by startups is to the tune of Rs. 463.45 crore

## 6.  Faster Exit for Startups

-  Ministry of Corporate Affaairs has notified Startups as 'Fast track firms'
-  This enables them to wind up operations within 90 days as against 180 days for other companies through Insolvency and Bankruptcy Board

## 7.  Funding Support through a Fund of Funds

-  The Cabinet has approved the establishment of 'Fund of Funds for Startups (FFS) at SIDBI for contribution to various Alternative Investment Funds (AIFs) with a corpus of Rs10,000 Cr. The corpus is to be built up over the 14th and 15th Finance Commission cycles.
-  A total of Rs 700 Crore has been released till now
-  2x Govt. contribution received by venture funds is invested into DPIIT recognised startups
-  SIDBI has committed Rs 3123.20 Cr to 47 SEBI registered Alternative Investment Funds (AIFs).
-  INR 695.94 Cr. have been drawn from the SIDBI Fund of Funds
-  Rs. 2,669.83 Cr. have been invested into 279 startups

## 8.  Tax Exemption on Capital Gains

Tax exemption shall be given to persons who have capital gains during the year if they have invested such capital gains in the Funds recognized by the Government

-  Amendment in Section 54GB of Income Tax Act: 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 prescribed stake of equity shares of eligible Startup for utilizing the same for purchase of specified asset. (Feb, 2016)
-  Minimum Alternate Tax credit allowed to be carried forward up to fifteenth assessment years instead of ten assessment years. (2017)
-  Extension of benefit under section 54GB shall be available for sale of residential property on or before 31st March 2021

## 9.  Tax Exemption to Startups for 3 years

-  With  a  view  to  stimulate  the  development  of  Startups  in  India  and  provide them a competitive platform, the profits of Eligible DPIIT Recognized Startups are  exempt  from  income-tax  for  a  block  of  3  years  out  of  7  years  since incorporation under Section 80IAC of the Income Tax Act.
-  247 startups have been granted tax exemptions as on 25 th  November2019

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

-  DPIIT Recognized Startups are exempt from tax under Section 56(2)(viib) of the Income Tax Act when such a Startup receives any consideration for issue of shares which exceeds the Fair Market Value of such shares
-  1,658 startups have been granted tax exemptions as of 25 th November 2019.

## 11. State's Startup Ranking Framework

DPIIT  launched  the  States'  Startup  Ranking  Framework  on  6th  February 2018.  The  key  objective  of  the  Startup  States  Ranking  Framework  2018 (SRF-  2018)  was  to  encourage  States  and  UTs  to  take  proactive  steps towards  strengthening  the  Startup  ecosystem  within  their  jurisdiction.  There were 38 action points categorized into 7 broad areas such as Startup Policy and  Implementation,  Incubation  support,  Seed  Funding,  Angel  and  Venture Funding, Simplification of Regulations,  Easing  Public  Procurement  and Awareness & Outreach. The ranking methodology aims to create a healthy competition among States to further learn, share and adopt best practices. A compendium of good practices was also launched, listing 95 good practices implemented  by  various  State  Governments.  Knowledge  Workshops  were held  to  assist  States  in  formulating  policies  and  executing  appropriate programs.  Visits  to  USA  and  Israeli  ecosystems  were  facilitated  for  State Government  representatives to enable the transfer of information and knowledge from the best ecosystems of the world. The final rankings of SRF 2018  were  announced  on  20th  December,  2018  and  the  States  were felicitatedby  DPIIT.  27  States  and  3  Union  Territories  participated  in  the exhaustive ranking exercise.

As a result of SRF 2018, new Startup policies were launched, old and archaic laws were abolished, new Government orders were issued and many Startups were supported .Some of the major impacts of the ranking exercise include Implementation  of  Startup  Policies  in  25  States,  Seed  Funding  to  3213 Startups; Funding  of 163  Startups through Venture Funds;  17 States announcing  incentives  for  women  entrepreneurs;  Incubation  area  of  10.2 lakhSq.ft supported by State Governments; Establishment of 596 EntrepreneurshipCells  across  340  districts;  Registration  of  1996  mentors across 19 States and organization of 233 Startup events across 21 States.

## 12. Startup Yatra

-  Startup India launched Startup India Yatra in 2017 to promote entrepreneurship  in  rural  and  non-metro  regions  across  States.  Under  this program,  grassroot  Startup  aspirants  were  provided  incubation,  mentorship and funding support.
-  The  yatra  starts  with  the  launch  and  flagging  off  of  the  Startup  India  Yatra Van.  This  van  travels  around  the  state  to  different  colleges  spreading

awareness  about  the  central  and  state  level  startup  policies  as  well  as providing an opportunity to aspiring entrepreneurs to pitch their ideas online.

-  As  part  of  the  program,  bootcamps  are  also  organized  in  tier-2  and  tier-3 districts of the state where participants attend an ideation workshop and pitch their ideas. The ideas shortlisted from these bootcamps further attend a twoday acceleration program.
-  Startup Yatra has been conducted across 23 States in 207 districts impacting 78346  aspiring  entrepreneurs.  A  total  of  1,424  incubation  offers  have  been given to the startups as on May 2019.

## 13.   Organizing  Startup  Fests  for  Showcasing  Innovation  and  Providing  a Collaboration Platform.

DPIIT  has  organized  various  Startup  events.  Some  of  such  key  events  are  as follows:

- I. Roundtable headed by Minister of Commerce and Industry with Venture Fund    managers in April, 2018 at Mumbai;
- II. Roundtable  with Singapore delegation led by Enterprise Singapore &TiE Singapore in August, 2018 at Delhi;
- III. Roundtable  with Japanese startups led by JETROin September, 2018 at Delhi;
- IV. Roundtable headed by Secretary DPIIT  with Venture Fund managers in August, 2018 at Delhi;
- V. Roundtable with Finance Secretary on banking regulations faced by startups in September, 2018 at Delhi;
- VI. Startup India Global Venture Capital Summit in December, 2018 at Goa;
- VII. Roundtable headed by Secretary DPIIT on Angel Tax regulations in February, 2019 at Delhi;
- VIII. Startup Manthan @ Aero India in February 2019 at Bengaluru;
- IX. Speed Mentoring Session for Women Entrepreneurs in March, 2019 at Delhi;
- X. Roundtable headed by Secretary DPIIT  on Accreditation of investors in  April,  2019 at Delhi;
- XI. Roundtable with Central Government Departments on  best practices for promoting startups in May, 2019 at Delhi

## 14.       Launch  of  Atal  Innovation  Mission  (AIM)  with  Self-Employment  and Talent Utilization (SETU) Program

-  8,878 schools have been selected across the country where Atal Tinkering Labs will be established
-  4,020 have already received INR 12 Lakhs grant each and are operational
-  Total grant of Rs.482.40 Crore has been given to Atal Tinkering Labs
-  NITI has launched Innovation Awards through the challenge route by the name of Atal New India Challenges (ANIC)
-  Call for applications in 24 focus areas across 5 ministries
-  26 Applicants have been shortlisted for funding and handholding support and additional 26 applicants are shortlisted for handholding support

## 15.         Harnessing Private Sector Expertise for Incubator Setup

-  Atal Innovation Mission has selected 102 incubators across the country to provide financial support through grants in aid
-  38 Atal Incubation Centers and 9 Established Incubation Centers are operational across the country
-  INR 139.91 Cr has been disbursed to these 38 AICs and 9 EICs
-  More than 620 Startups incubated in AICs/EICs out of which 121 are womenled start-ups
-  More than 14,000 jobs created
-  More than 150 MSME's supported to build business sustainability
-  More than 500 mentors on-boarded by the AICs/EICs to guide the Startups

## 16.  Building Innovation Centres at National Institutes - Department of Science and Technology

-  11 TBIs (Technology Business Incubators) approved
-  INR 42.2 Cr has been sanctioned out of which 18.7 Cr disbursed
-  21 new TBIs (over and above 15 TBIs envisaged) and 5 Center of Excellence (COEs) are proposed to be established

## 17.  Setting up of 7 New Research Parks

-  INR 575 Cr has been  sanctioned out of which INR 250 Cr has been disbursed
-  The Research Park at IIT Gandhinagar is expected to be operational by January 2020

## 18.        Promoting Startups in the Biotechnology Sector

-  4 bio-clusters at Kalyani, Bangalore, Faridabad, and Pune are operational. INR 401 crore has been sanctioned, and INR 300 crore has been disbursed to these bio-clusters
-  41 bio-incubators have been supported and all of them are operational. INR 272.26 crore has been sanctioned and INR 193.88 crore has been crore disbursed.
- 
- 5 Bio-connect offices established as following: 1. CCAMP, Bengaluru with California Institute for Quantitative Biosciences
- (QB3)
2. CCAMP- Sister Innovation HUB with Roslin Innovation Centre, University of Edinburgh, UK
3. CEIIC BioNEST with European Union
4. KIIT BioNEST - with TECHNOPORT SA - BELVAL Business Incubator, Luxembourg
5. KIIT BioNEST - with Start-Life Centre, Wageningen University Netherland 4 BIRAC Regional Centres have already been set up at Hyderabad,
-  Bengaluru, Bhubaneswar, and Pune. INR 16.95 cr has been sanctioned, and INR 9.42 cr has been disbursed.
-  Biotech equity fund has been established as Fund of Funds with INR 150 crore. So far, INR 150 crore has been committed to Alternate Investment Funds (AIFs). INR 25.1 crore has been disbursed
-  BIRAC's SEED Fund with 14 Bio-incubators as Seed fund partners are operational. INR ₹ 26 Cr has been sanctioned for BIRAC SEED Fund; Rs. 18.3 Cr  has been disbursed

## 19.      Innovation Focused Programs for Students

-  This initiative is coordinated by Department of Science and Technology and Ministry of Human Resource Development.

224  applications  have  been  received  under  NIDHI  (National  Initiative  for Developing  and  Harnessing  Innovations).Out  of  30  finalists  selected,  12 student run teams have been awarded Rs 10 Lakh each. 148 projects have been sanctioned and Rs 220.75 crore has been released under the Uchchatar AvishkarYojana scheme. Rs10,000 has been granted to 1,03,497 students in the  last  3  years  under  the  MANAK  (Million  Minds  Augmenting  National Aspiration and knowledge) Scheme

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