Lok Sabha Question No. 1393 (UNSTARRED), answered on 2021-02-10
Subject: Startup India Scheme
Ministry: COMMERCE AND INDUSTRY
Asked by: Kripanath Mallah

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

## LOK SABHA

UNSTARRED QUESTION NO. 1393.

TO BE ANSWERED ON WEDNESDAY, THE 10 TH  FEBRUARY, 2021.

## STARTUP INDIA SCHEME

## 1393.  SHRI KRIPANATH MALLAH:

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

वाणिज्य एवं उद्योग मंत्री

- (a) the salient features of the Startup India Scheme;
- (b) the details of the funds sanctioned, allocated and utilized under this scheme within Assam so far;
- (c) the details of the target set and achievements made so far;
- (d) whether the Government has conducted workshops under this scheme within Assam to encourage women entrepreneurship;
- (e) if so, the details thereof, District-wise; and
- (f)           the details of the response of these workshops?

ANSWER

## वाणिज् यवव द्योग म त्रालयमेंराज् यम त्रर(श्रर सोमप्रकाश) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY (SHRI SOM PARKASH)

- (a): 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.  Salient  features  of  the  Startup  India Initiative are at Annexure-I .
- (b): There is no direct fund allocation from DPIIT to States/UTs under Startup India  initiative.  However, Government  of  India  has  established  a  Fund  of Funds  for  Startups  (FFS)  with  corpus  of  Rs.  10,000  crores,  to  meet  the funding  needs  of  startups.  DPIIT  is  the  monitoring  agency  and  Small Industries Development Bank of India (SIDBI) is the operating agency for FFS.  The  total  corpus  of  Rs.  10,000  crores  is  envisaged  to  be  provided over the 14 th and 15 th Finance Commission cycles based on progress of the scheme  and  availability of funds. The details of Startups received investment under FFS in the State of Assam are at Annexure -II.
- (c): The achievements under Startup India initiative are at Annexure-III.
- (d) to (f): The  details  of  steps  taken  under  Startup  India  Initiative  along  with  the workshops  conducted all over India including Assam to encourage women entrepreneurship are at Annexure IV.

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## ANNEXURE  REFFERRED  TO  IN  REPLY  TO  PART  (a)  TO  THE  LOK  SABHA UNSTARRED QUESTION NO. 1393  FOR ANSWER ON 10.02.2021

## Salient features of Startup India Initiative

1. Under  the  Startup  India  Action  Plan,  startups  that  meet  the  definition  as prescribed    under G.S.R.  notification  127  (E)  dated  19.02.2019 are  eligible  to apply for recognition under the program. The Startups have to provide support documents, at the time of application. Eligibility Criteria for Startup Recognition are as under:-
- i. The  Startup  should  be  incorporated  as  a  private  limited  company  or registered as a partnership firm or a limited liability partnership.
- ii. Turnover  should  be  less  than  INR  100  Crores  in  any  of  the  previous financial years.
- iii. An entity shall be considered as a startup up to 10 years from the date of its incorporation.
- iv. The  Startup  should  be  working  towards  innovation/  improvement  of existing products, services and processes and should have the potential to generate employment/ create wealth. An entity formed by splitting up or  reconstruction  of  an  existing  business  shall  not  be  considered  a "Startup".
2. Startups can apply and get recognized by Department of Promotion of Industry and Internal Trade and avail the benefits mentioned below:-
- i. Fast  tracking  and  rebate  on  applications  for  Intellectual  Property:  The patent application of startups is fast-tracked for examination and disposal. Facilitators  are  responsible  for  providing  general  advisory  on  different IPRs, and  information on protecting and  promoting  IPRs  in other countries. Central Government bears the entire fees of the facilitators for any number of patents, trademark or designs, and startups only bear the cost  of  the  statutory  fees  payable.  Startups  are  provided  with  an  80% rebate in filing of patents and 50% rebate in filling of trademark vis-a-vis other companies.
- ii. Access  to  Rs.  10,000  Crore  Fund  of  Funds : To  provide  equity  funding support for development and growth of innovation driven enterprises, the government has set aside a corpus fund of INR 10,000 Cr managed by SIDBI. The fund is in the nature of Fund of Funds, which means that the government participates in the capital of SEBI registered Venture Funds, who invest twice the amount in startups. The flow of funds is Government > SIDBI > Venture Capitals > Startups.
- iii. Self-Certification  under  Labour  and  Environmental  laws : Startups  are allowed to self-certify their compliance under 6 Labour and 3 Environment laws for a period of 3 to 5 years from the date of incorporation.
- iv. Income Tax Exemption for 3 years : Startups incorporated on or after 1st April 2016 can apply for income tax exemption. The recognised startups that are granted an Inter-Ministerial Board Certificate are exempted from income-tax  for  a  period  of  3  consecutive  years  out  of  10  years  since incorporation.
- v. Exemption for the Purpose Of Clause-(Viib) of Subsection-(2) of Section 56 of the Act: A DPIIT recognized startup is eligible for exemption from the provisions of section 56(2)(viib) of the Income Tax Act.
- vi. Government  Public  Procurement  eligibility : Government  of  India  has authorised its ministries,  departments  and  public  sector  undertakings  to relax  norms  in  all  public  procurements.  Startups  are  entitled  to  avail exemption on prior turnover, prior experience and earnest money deposit. DPIIT recognised startups can now get listed as sellers on the Government  of  India's  largest  e-procurement  portal  -  Government  eMarketplace (GeM).
- vii. Faster  Exit  for  Startups : Ministry  of  Corporate  Affairs  has  notified Startups as 'fast track firms' enabling them to wind up operations within 90 days vis-a-vis 180 days for other companies

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ANNEXURE-II ANNEXURE  REFFERRED  TO  IN  REPLY  TO  PART  (b)  TO  THE  LOK  SABHA UNSTARRED QUESTION NO. 1393  FOR ANSWER ON 10.02.2021

Details of Investment in Startups for the State of Assam

| Name of the Fund               | Name of the Company                          |   Investment (MSME / Startup) Rs. in Crore | City            |
|--------------------------------|----------------------------------------------|--------------------------------------------|-----------------|
| North East Venture Fund (NEVF) | ERC Eye Care (P) Ltd.                        |                                       1.5  | Jorhat          |
| North East Venture Fund (NEVF) | Izake Design and Consultancy Private Limited |                                       0.25 | Guwahati Kamrup |
| North East Venture Fund (NEVF) | North East Flavours India (P) Ltd.           |                                       0.7  | Guwahati Kamrup |
| North East Venture Fund (NEVF) | Symbiotic Foods (P) Ltd.                     |                                       0.38 | Tezpur Sonitpur |
| Total fund                     | Total fund                                   |                                       2.83 | 2.83            |

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## ANNEXURE-III

## ANNEXURE  REFFERRED  TO  IN  REPLY  TO  PART  (c)  TO  THE  LOK  SABHA UNSTARRED QUESTION NO. 1393 FOR ANSWER ON 10.02.2021

## Details of achievements under Startup India Initiative

## 1)  Intellectual Property Rights (IPR) benefits:

- I. Startups  are  eligible  for  80%  rebate  in  patent  filing  fees  and  50%  on trademark filing fees. Additionally, Startups are also provided the facility of expedited examination of patent applications to reduce the time taken in granting patents.
- II. 510 patent facilitators and 392 trademark facilitators have been empanelled, as of November 2020, under this scheme to provide free-ofcharge services to Startups.
- III. As of November 2020,
- i. 5020 patent applications have been filed.
- ii. Expedited examination for patent applications filed  by  Startups  1170; of these 459 Patents granted.
- iii. Total number of Trademark applications filed - 12,264.

## 2)  Easing Public Procurement

I. The  requirement  of  prior  turnover  and  prior  experience  has  been relaxed  to  encourage  startups  to  participate  in  tenders.  Further,  startups have been exempted from the requirement of earnest money deposit.

- II. 'GeM Startup Runway' has been launched for startups to sell products and  services  to  Government.  As  of  4 th January  2021,  7,929  DPIIT recognized startups have registered on Government e-Marketplace (GeM).
- III. As of 4 th January 2021, 53,226 orders from public entities have been placed to startups with the value of orders worth Rs. 2,279 crores.
- IV. Additionally,  Startups  can  now  register  and  participate  in  all  public orders on Central Public Procurement Portal and get exemptions on prior experience, prior turnover and earnest money deposit requirements.
- V.  GeM  has  relaxed  the  requirement  of  approved  Trademark  certificate  for DPIIT Recognized Startups . An application for trademark will be sufficient.

## 3)  Self-Certification under Labour and Environmental laws

- I. Startups  recognised  under  Startup  India  initiative  can  self-certify  their compliance against the 6 labour laws and 3 environmental laws.
- II. 27 states and UTs have implemented the process of self- certification to startups  under  6  labour  laws.  9  States  (Haryana,  Madhya  Pradesh, Maharashtra,  Rajasthan,  Gujarat,  Uttar  Pradesh,  Punjab,  Uttarakhand, and  Delhi)  have  integrated  their  portals  with  Shram  Suvidha  Portal.

Overall, 169 DPIIT recognized Startups have availed the benefits of selfcertification.

## 4) Tax Exemption to Startups for 3 years

- I. The  provisions  of  section  80-IAC  of  the  Income  Tax  Act  provide  for  a deduction  of  an  amount  equal  to  100%  of  the  profits  and  gains  derived from  an  eligible business  by  an  eligible start-up for  3  consecutive assessment years out of 7 years, at the option of the assessee, subject to certain conditions. The Finance Act, 2020 provides for an amendment to section 80-IAC of the Income Tax Act so as to provide that the deduction under the said section 80-IAC shall be available to an eligible start-up for a period of 3 consecutive assessment years out of 10 years beginning from the year in which it is incorporated. This amendment will take effect from 1st  April  2021  and  will,  accordingly,  apply  in  relation  to  the  assessment year 2021-22 and subsequent assessment years.
- II. To avail these benefits, a Startup must get a Certificate of Eligibility from the Inter-Ministerial Board (IMB). 329 startups have been granted income tax exemptions till December 2020.

## 5) Tax Exemption on Investments above Fair Market Value

- I. 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. The startup  has  to  file  a  duly  signed  declaration  in  Form  2  to  DPIIT  {as  per notification G.S.R. 127 (E)} to claim the exemption from the provisions of Section 56(2) (viib) of the Income Tax Act.  As of 3 rd February 2021, with regard to declarations received from entities, furnished in Form  2, intimation  regarding  receipt  of  declaration  in  Form  2  has  been  mailed  in the cases of 3612 entities.

## 6) Faster Exit for Startups

Ministry  of  Corporate  Affairs  has  notified  Startups  as  'Fast  track  firms' enabling them to wind up operations within 90 days vis-a-vis 180 days for other companies.

## 7) Fund of Funds for Startups

- I. Fund of Funds for Startups (FFS) with a total corpus of Rs 10,000 crore was established with contribution spread over the 14th and 15th Finance Commission cycle based on progress of implementation. Startup Fund of Funds is operational and is managed by SIDBI.
- II.  As on date, an amount Rs.1461.29 crore stands released to SIDBI, out of which Rs.500crore was released in 2015-16; Rs.100 crore was released in 2016-17; Rs.431.30 crore released in 2019-20 and Rs.429.99 crore was released in 2020-21.
- III.  As  of  31st  January  2021,  SIDBI  has  committed  Rs.  4376.95  crore  to 62 SEBI  registered  Alternative  Investment  Funds  (AIFs).  These  funds  have raised a corpus fund of Rs. 31,598 crore and Rs. 5089.55 crore have been invested into 391 startups.
- 8) 39 regulatory reforms have been undertaken since January 2016 for enabling small businesses or Startups across the country.

## 9) National Startup Awards

- I. The  Department  for  Promotion  of  Industry  and  Internal  Trade  (DPIIT) conceived the National Startup Awards to recognize and reward outstanding Startups and ecosystem enablers that are building innovative products  or  solutions  and  scalable  enterprises,  with  high  potential  of employment  generation  or  wealth  creation,  demonstrating  measurable social  impact. The  measure  of  success was not  only  financial  gains  for investors,  but  also  contribution  to  social  good. The  first  edition  of  the Awards  invited  applications  across  12  sectors,  which  were  further  subclassified into a total of 35 categories. These 12 sectors were Agriculture, Education, Enterprise Technology, Energy, Finance, Food, Health, Industry 4.0, Space, Security, Tourism, categories and Urban Services. In addition  to  these  categories,  those  startups  were  recognised  that  are creating  an  impact  in  rural  areas,  are  women-led,  or  founded  in  an academic campus.
- II.  The applications  for  the  'National  Startup  Awards  2020'  were  hosted  on the Startup India portal - www.startupindia.gov. in - through which a total of 1,641 applications were received from Startups across 23 States and 4 Union  Territories.    41  ecosystem  enablers  (incubators  and  accelerators) also participated in the Awards.

## 10)     Awards for Winners

- I. Startups
2.  INR 5 to the winning startup in each of the 38 Categories
3.  Opportunity  to  pitch  in  front  of  relevant  line-ministry/  department/ corporates to all finalist startups (that qualified to Phase 4 of evaluation)
4.  Priority  for  participation  in  national  and  international  events to  all finalist startups

## II. Ecosystem Enablers

-  INR 15 Lakh to one winning incubator and one accelerator each
- III.          The  Results  of the National  Startup Awards  2020  were  released by Hon'ble  Minister  of  Railways  and  Commerce  &  Industry, Shri  Piyush Goyal,  on 6 th of  October  2020 at  the  National  Media  Centre,  New  Delhi. The  virtual  felicitation  ceremony  was  held in  the  august  presence  of Hon'ble Minister of State for Commerce & Industry, Shri Som Parkash.
- IV.   Handholding Support : DPIIT has now embarked on a new journey with all of the 192 NSA finalists (including the winners), handholding them reach their next stage of growth. As committed during NSA  felicitation ceremony,  DPIIT  is  supporting  the  startups  across  8  key  tracks  viz. Investor Connect, Mentorship, Corporate Connect, Government Connect, International Market Access, Regulatory Support, Benefits under Startup India initiative, and Startup India Showcase.

## 11) Startup India Showcase

Startup  India  Showcase  is  an  online  discovery  platform  for  the  most promising  startups  of  the  country  chosen  through  various  DPIIT  and Startup India programs exhibited in a form of virtual profiles. The startups showcased on the platform have distinctly emerged as the best in their fields.  These  innovations  have  been  handpicked  by  experts  and  have gone  through  multiple  rounds  of  screening  and  evaluation.    These innovations  span  across  various  cutting-edge  sectors  such  as  Fintech, Entreprise  Tech,  Social  Impact,  HealthTech,  EdTech,  among  others. These startups are solving critical problems and have shown exceptional innovation  in  their  respective  sectors.  Ecosystem  stakeholders  have nurtured and supported these startups, thereby validating their presence on this platform.

## 12)           Startup India Yatra

DPIIT  has  also  made  efforts  to  engage  with  the  Startup  ecosystem through extensive outreach via bootcamps, social media, print and digital platforms. The Startup India Yatra is an initiative that travels to Tier 2 and Tier 3 cities of India to search for entrepreneurial talent and help develop Startup ecosystem. Day long bootcamps were conducted which included awareness  workshops,  idea  validation  and  pitching  sessions.  Startup Yatra  has  been  conducted  across  23  States  in  236  districts  impacting 78346  aspiring  entrepreneurs.  A  total  of  1,424  incubation  offers  have been given to the startups as a result of this initiative.

## 13) Recognition

There has been an increase in the number of DPIIT recognized startups in the recent    years. The increasing trend can be seen from the below breakup

| Calendar Year   |   Recognized Startups |
|-----------------|-----------------------|
| 2016            |                   504 |
| 2017            |                  5420 |
| 2018            |                  8946 |
| 2019            |                 11683 |
| 2020            |                 14778 |
| 2021*           |                  1402 |

(*data till 27 th January 2021)

## 14) Startup India Portal

- I.  Startup India provides free resources to startups to help them scale faster, better, and  stronger. The  portal acts as one  stop platform for the stakeholders  of  startup  ecosystem  with  aspiring  entrepreneurs,  startups, corporates, accelerators, incubators, government departments having profile on the platform.
- II. 4,49,978 users have registered on the website, as on 31 st December 2020.
- III.  More  than  446  Innovation  Hunts  and  programs  have  been  hosted  on  the Startup India portal by various government departments and corporates.

## 15) Learning & Development Program

- I. To guide budding entrepreneurs through the journey of their startup venture, a free 4-week program is offered on the key areas of starting up by more than  40  top  founders of India.  Upon  completion  of  the  course,  an acknowledgement  certificate  for  the  learnings  in  the  program  is  also provided.
- II.  The  Learning  and  Development  course  has  been  accessed  by  2,80,000 users.

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## ANNEXURE-IV

## ANNEXURE  REFFERRED  TO  IN  REPLY  TO  PARTS  (d)  to  (f)  TO  THE  LOK SABHA UNSTARRED QUESTION NO. 1393  FOR ANSWER ON 10.02.2021

## Encouraging Women Entrepreneurship under Startup India Initiative

Women-owned  business  enterprises  are  playing  a  prominent  role  in  the society  inspiring  others  and  generating  more  employment  opportunities  in  the country. To promote flow of both equity and debt to women led startups, interactions of  such  women entrepreneurs with venture funds supported by SIDBI and lending institutions  including  banks  are  being  organized  by  inviting  applications  on  the 'Startup  India  Hub'  and  inviting  selected  women  entrepreneurs,  after  a  process  of screening by experts, to interact with these institutions for both equity/debt funding. Specific  and  suitable  entrepreneurship  development  programmes  for  women  led startups throughout the country are being designed by ascertaining the training/skilling needs of the target groups. To meet the advisory needs of the startups led by women, legal, tax, financial and other service providers are being sought to get them connected with each other through the Startup India Hub. The following steps have been taken under Startup India Initiative to promote women entrepreneurship all over India which are also available for the women entrepreneurs in the State of Assam:-

1. 10% of the fund (Rs 1000 crore) in the Fund of Funds operated by SIDBI has been reserved for women led startups, which will have a multiplier effect as Rs  1000  crore  would  mean  overall  corpus  of  Rs  7000  crore.  All  the  AIFs where  SIDBI  takes  equity  have  been  mandated  to  contribute  20%  in businesses which are women led, women influenced and women employment or women consumption centric.
2. Women  Capacity  Development  Programme  (WING)  is  a    unique  Capacity Development  Program  for  women-led  startups,  to  identify  and  support  both aspiring and established women entrepreneurs in their startup journeys. The workshops are open to variety of business sectors including Tech, Construction, Product, Machine, Food, Agriculture, Education, etc.  The workshops served as a platform for emerging women entrepreneurs and other stakeholders  to  discuss  the  key  challenges  facing  women  entrepreneurs. WING  workshops  have  created  a  conducive  environment  to  share  best practices  and  experiences  in  overcoming  challenges  and  to  gain  insights learned from the business models adopted in the Indian context. A total of 24 workshops  were  conducted  across  9  States,  benefitting  more  than  1,300 women entrepreneurs.
3. Virtual  Incubation  Program  for  Women  Entrepreneurs  were  conducted  in collaboration  with  Zone  Startups  to  support  20  women-led  tech  startups  with pro-bono acceleration support for 3 months.
4. A  webpage  dedicated  to  women  entrepreneurs  has  been  designed  on  the Startup India portal. The page mentions in a collated format all the incentives for women entrepreneurs as per the State Startup Policies and has new blogs.
5. A  Capacity  Development  Workshop  was  conducted  for  aspiring  and  existing women entrepreneurs on 27 th and 28 th February 2020 at Assam Startup, The Nest,  Guwahati.  The  workshop  focused  on  educating  entrepreneurs  on  the
6. basics  of  financial  management  for  startup,  legal  compliances  related  to startups,  IP  protection  and  marketing  strategies.  45  participants  attended  the session in Guwahati. 25 participants were connected with incubation and legal partner for further mentorship support.

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