Lok Sabha Question No. 149 (UNSTARRED), answered on 2022-02-02
Subject: Startup Incubation
Ministry: COMMERCE AND INDUSTRY
Asked by: Mohammad Jawed

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

UNSTARRED QUESTION NO. 149. TO BE ANSWERED ON WEDNESDAY, THE 2 ND  FEBRUARY, 2022.

## STARTUP INCUBATION

## 149.   DR. MOHAMMAD JAWED:

Will the Minister of COMMERCE AND INDUSTRY be pleased to state: वाणिज्य एवं उद्योग मंत्री

- (a) whether  the  Ministry  will  consider  launching  a  startup  incubation  focused specifically towards young entrepreneurs in Bihar to improve the economy of the region;
- (b) if so, the details thereof;
- (c) whether startups with good foundational values would be promoted at national level to secure support and funding from nationally-recognized capital growth funds post pre-seed round; and
- (d) if so, the details thereof?

## ANSWER

## वाणिज्य एवं उद्योग मंत्रालय में राज्य मंत्री ( श्री सोम प्रकाश ) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY (SHRI SOM PARKASH)

- (a) & (b): Yes.  The  Government  has  taken  various  initiatives  for  setting  up incubators to support startups through national level schemes. List of some of the schemes is at Annexure-I .
- (c) & (d): 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 to drive sustainable economic growth and generate large scale employment opportunities. Salient features of the Startup India Initiative are at Annexure-II .

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## ANNEXURE-I

## ANNEXURE REFERRED TO IN  REPLY TO PARTS (a) & (b) OF THE LOK SABHA UNSTARRED QUESTION NO. 149 FOR ANSWER ON 02.02.2022.

## List of the national level schemes for setting up/ supporting Incubators

1. NITI  Aayog  AIM -  Atal  Innovation  Mission  (AIM)  is  Government  of  India's flagship initiative to create and promote a culture of innovation and entrepreneurship across the length and breadth of our country. The objective of the scheme is to promote and establish incubation centers in India which would  support  and  encourage  start-ups  in  specific  subjects/sectors  such  as manufacturing, transport, energy, health, education, agriculture, water, sanitation, etc and would provide them with necessary infrastructure facilities and other value-added services.
2. NIDHI  -  National  Initiative  for  Developing  and  Harnessing  Innovations (NIDHI) is an umbrella programme conceived and developed by the Innovation & Entrepreneurship division, Department of Science & Technology, Government of India, for nurturing  ideas and  innovations  (knowledge-based and technology-driven) into successful startups.   Under NIDHI, one component is setting up TBI (Technology Business Incubators) The objective is to promote new technology/knowledge/innovation-based startups that create jobs, wealth & business in alignment with national priorities.
3. Technology  Incubation  and  Development  of  Entrepreneurs  (TIDE)  2.0 Scheme :  The enhanced version of TIDE scheme i.e. Technology Incubation and Development of Entrepreneurs (TIDE 2.0) Scheme was initiated in the year 2019 to promote tech entrepreneurship through financial and technical support to incubators engaged in supporting ICT startups using emerging technologies such  as  IoT,  AI,  Block-chain,  Robotics  etc.  in  seven  pre-identified  areas  of societal relevance.
4. DBT BioNEST (Department of Biotechnology) (Bioincubators Nurturing Entrepreneurship  for  Scaling  Technologies  -  BioNEST) -  BioNest  was launched by BIRAC (Biotechnology Industry Research Assistance Council) with a  vision  that  focused  on  fostering  the  biotech  innovation  ecosystem  in  the country. This program provides support to establish bio-incubators either as a standalone entity or as a part of academia.

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## ANNEXURE REFERRED TO IN  REPLY TO PARTS (c) & (d) OF THE LOK SABHA UNSTARRED QUESTION NO. 149 FOR ANSWER ON 02.02.2022.

## Salient features of Startup India Initiative

The salient features of Startup India initiative are as under:-

- i. Startup India Action Plan : An Action Plan for Startup India was unveiled by the Hon'ble Prime Minister on 16 th  January 2016. The Action Plan comprises of 19 action items spanning across areas such as 'Simplification and handholding', 'Funding support and incentives' and 'Industry-academia partnership and incubation'. The Action Plan laid the foundation of Government support,  schemes  and  incentives  envisaged  to  create  a  vibrant  startup ecosystem in the country.
- ii. Startup India: The Way Ahead : Hon'ble Prime Minister unveiled Startup India: The Way Ahead at 5 years celebration of Startup India on 16 th  January 2021 which includes actionable plans for promotion of ease of doing business for startups,  greater  role  of  technology  in  executing  various  reforms,  building capacities of stakeholders and enabling a digital Aatmanirbhar Bharat.
- iii. Startup  India  Seed  Fund  Scheme  (SISFS) :  Easy  availability  of  capital  is essential for entrepreneurs at the early stages of growth of an enterprise. The capital  required  at  this  stage  often  presents  a  make  or  break  situation  for startups with good business ideas. Hon'ble Prime Minister launched SISFS at Prarambh. The Scheme aims to provide financial assistance  to startups for proof  of  concept,  prototype  development,  product  trials,  market  entry  and commercialization.  It  will  support  an  estimated  3,600  entrepreneurs  through 300 incubators in the next 4 years.
- iv. Fund of Funds for Startups (FFS) Scheme : The Government has established 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 14th and 15th Finance Commission cycles based on progress of the scheme and availability of funds. It has not only made capital available for startups at early stage, seed stage and growth stage but also played a catalytic role in terms of facilitating raising of domestic capital, reducing dependence on foreign capital and encouraging home grown and new venture capital funds.
- v. Ease  of  Procurement :  To  enable  ease  of  procurement,  Central  Ministries/ Departments  are  directed  to  relax  conditions  of  prior  turnover  and  prior experience in public procurement for all Startups subject to meeting quality and technical  specifications.  Further,  Government  e-Marketplace  (GeM)  Startup Runway; a dedicated corner for startups to sell products & services directly to the Government.
- vi. 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.
- vii. 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.
- viii. Exemption for the Purpose Of Clause (VII)(b) of Sub-section (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.
- ix. Startup India Hub : The Government launched a Startup India Online Hub on 19 th  June 2017 which is one of its kind online platform for all stakeholders of the entrepreneurial ecosystem in India to discover, connect and engage with each other. The Online Hub hosts Startups, Investors, Funds, Mentors, Academic Institutions,  Incubators,  Accelerators,  Corporates,  Government  Bodies  and more.
- x. National Startup Awards : National Startup Awards is an initiative 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.
- xi. International Access to Indian Startups : One of the key objectives under the Startup India initiative  is  to  help  connect  Indian  startup  ecosystem  to  global startup ecosystems through various engagement models. This has been done though international Government to Government partnerships, participation in international forums and hosting of global events. Startup India has launched bridges with over 11 countries (Brazil, Sweden, Russia, Portugal, UK, Finland, Netherlands,  Singapore,  Israel,  Japan,  South  Korea)  that  provides  a  softlanding platform for startups from the partner nations and aid in promoting cross collaboration.
- xii. Support for Intellectual Property Protection :  Startups are eligible for fasttracked patent application examination and disposal.  The  Government launched Start-ups Intellectual Property Protection (SIPP) which facilitates the startups  to  file  applications  for  patents,  designs  and  trademarks  through registered facilitators in appropriate IP offices by paying only the statutory fees. Facilitators under this Scheme are responsible for providing general advisory on different IPRs, and information on protecting and promoting IPRs in other countries.  The  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.
- xiii. 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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