Lok Sabha Question No. 1775 (UNSTARRED), answered on 2022-07-27
Subject: Startups
Ministry: COMMERCE AND INDUSTRY
Asked by: Raksha Nikhil Khadse, Manoj Kishorbhai Kotak

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY

## DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE LOK SABHA

UNSTARRED QUESTION NO. 1775.

TO BE ANSWERED ON WEDNESDAY, THE 27 TH  JULY, 2022.

## STARTUPS

## 1775.  S MT. RAKSHA NIKHIL KHADSE: SHRI MANOJ  KOTAK:

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

- (a) whether it is a fact that nearly 50 per cent of recognised startups in our country are from Tier-II and III cities;
- (b) if so, the details thereof;
- (c) whether the Government is supporting the startups in clean energy and emerging technologies;  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): As on 30 th  June 2022, a total of 72,993 startups are recognized by DPIIT, of which 34,473 (48%) recognised startups belong to metropolitan cities of Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bengaluru, Pune and Ahmedabad. Therefore, over 50% of the recognised startups belong to non-metropolitan cities.
- (c) & (d): Yes, startups and the entire innovation ecosystem are the engines of growth  for  any  country.  Recognizing  this  aspect,  the  Government launched Startup  India  initiative  on  16 th  January  2016  with  an  aim  to build a stronger ecosystem for nurturing India's startup culture that would further drive our economic growth, support entrepreneurship, and enable large-scale employment opportunities.

Sustained Government  efforts in this direction have resulted in increasing  the  number  of  recognized  Startups  from  471  in  2016  to 72,993 in 2022 (as on 30th June 2022). DPIIT has recognized Startups which are spread across 56 diversified sectors. More than 3,300 DPIIT recognised  Startups  are  working  in  climate  action  sectors  providing solutions through renewable energy and green technology. Additionally, more than 4,500 Startups have been recognized in sectors relating to emerging  technologies  such  as  Internet  of  Things  (IoT),  robotics, artificial intelligence, analytics, etc.

Furthermore,  Department  of  Science  and  Technology  (DST)  had launched an umbrella programme called National Initiative for Developing  and  Harnessing  Innovations  (NIDHI)  in  year  2016  for nurturing  ideas  and  innovations  (knowledge-based  and  technologydriven) into successful startups. Under NIDHI, different programs range from providing fellowships to the students opting for entrepreneurship through  Entrepreneurs-In-Residence  (EIR)  Program,  Promoting  and Accelerating  Young  and  Aspiring  Innovators  and  Startups  (PRAYAS) program  by   providing  financial support  for converting  ideas  into prototypes,  availability  of  early  stage  Seed  support  to  incubated ventures, providing mentoring and investment readiness support through  Accelerators,  and  creating  Centres  of  Excellence  (CoE)  in incubation.

To  promote  innovations  in  biotechnology  sector,  the  Department  of Biotechnology,  through  Biotechnology  Industry  Research  Assistance Council (BIRAC), supports and nurtures startups in the Biotechnology sector. The major programmes are BioNEST Scheme (Bio incubators Nurturing  Entrepreneurship  for  Scaling  Technologies),  Biotechnology Ignition Grant (BIG) schemes and Innovation Challenge-SoCH (Solutions for Community Health). BIRAC has also set up a dedicated Clean  Energy  International  Incubation  Centre  (CEIIC)  for  supporting startups and technologies in clean energy area.

Additionally,  in  order  to  promote  innovation  and  agripreneurship  by providing  financial  support  and  nurturing  the  incubation  ecosystem Department of Agriculture & Farmers Welfare under the Rashtriya Krishi Vikas  Yojana-  Remunerative  Approaches  for  Agriculture  and  Allied Sector Rejuvenation (RKVY-RAFTAAR) scheme has launched 'Innovation  and  Agri-entrepreneur  development'  programme,  as  a component.  Startups  under  the  programme  are  taking  up  projects  in various fields of agriculture and allied sectors like Agro-processing, Food Technology  &  Value  Addition,  Artificial  Intelligence  (AI),  Internet  of Things  (IoT),  Information  &  Communication  Technology  (ICT),  Block Chain Technology (BCT), precision farming and Digital agriculture, and Block Chain technology among others.

The  Innovations  for  Defence  Excellence(iDEX)  was  launched  by  the Department of Defense Production, Ministry of Defense, with the aim to achieve self-reliance and foster innovation and technology development in Defense and Aerospace by engaging Industries, R&D institutes and academia  and  provide  them  grants  to  carry  out  R&D.  The  startups receive  upto  Rs  1.50  Crore  as  grant  for  development  of  innovative prototypes. They also receive enormous support from iDEX's partner

Incubators at IITs, IIMs and other private incubators spread all over the country. Under  the  Atal  Innovation  Mission,  the  Government  has  set  up  Atal Incubation Centres (AIC) to incubate startups in various sectors. It has also launched Atal New India Challenge (ANIC) program to directly aid startups with technology-based innovations that solve sectoral challenges of national importance and societal relevance. The  Government  has  also  operationalized  26  Centres  of  Excellence (CoEs) in diverse areas of national interest for driving self- sufficiency and creating capabilities to capture new and emerging technology areas. These domain specific CoEs are being established pan India with the participation of the Central Government, Software Technology Parks of India  (STPI),  State  Government(s),  industry  partnership  and  venture capital  firms.  These  CoEs  act  as  important  enablers  to  promote innovation in emerging technologies. Further,  Technology  Incubation  and  Development  of  Entrepreneurs (TIDE)  Scheme,  launched  by  Ministry  of  Electronics  and  Information Technology, has a multi-pronged approach in diverse areas of electronics, information and communications technology and management.  It  aims  to assist institutions of higher learning to strengthen  their  technology  incubation  centers  and  enable  young entrepreneurs to initiate technology startup companies for commercial exploitation of technologies developed by them. In  addition  to  the  above,  the  various  measures  undertaken  by  the

Government under Startup India initiative are at Annexure-I .

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## ANNEXURE REFERRED TO IN REPLY TO PARTS (c) & (d) OF THE   LOK SABHA UNSTARRED QUESTION NO. 1775 FOR ANSWER ON 27.07.2022.

## Programs Launched under Startup India initiative

The  details  of  various  programs  undertaken  by  the  Government  to  promote startups under Startup India initiative across the country are as under:

1. Startup India Action Plan : An Action Plan for Startup India was unveiled 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.
2. Fund of Funds for Startups (FFS) Scheme : The Government has established FFS with corpus of Rs. 10,000 crore, 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 crore 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.
3. Regulatory  Reforms :  52  regulatory  reforms  have  been  undertaken  by  the Government  since  2016  to  enhance  ease  of  doing  business,  ease  of  raising capital and reduce compliance burden for the startup ecosystem.
4. 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.
5. Self-Certification under Labour and Environmental laws : Startups are allowed to self-certify their compliance under 9 Labour and 3 Environment laws for a period of 3 to 5 years from the date of incorporation.
6. Income Tax Exemption for 3 years: Startups incorporated on or after 1st April 2016  can  apply  for  income  tax  exemption.  The  recognized  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.
7. International  Market  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 15 countries (Brazil, Sweden, Russia, Portugal, UK, Finland, Netherlands, Singapore, Israel, Japan, South Korea, Canada, Croatia, Qatar and UAE) that provides a soft-landing platform for startups from the partner nations and aid in promoting cross collaboration.
8. Faster Exit for Startups : The Government has notified Startups as 'fast track firms' enabling them to wind up operations within 90 days vis-a-vis 180 days for other companies.
9. 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.
10. Exemption for the Purpose Of Clause (VII)(b) of Sub-section (2) of Section 56 of the Act (2019) : A DPIIT recognized startup is eligible for exemption from the provisions of section 56(2)(viib) of the Income Tax Act.
11. Startup India Showcase : Startup India Showcase is an online discovery platform for the most promising startups of the country chosen through various programs for startups exhibited in a form of virtual profiles. The startups showcased on the platform have distinctly  emerged  as  the best  in  their  fields.  These  innovations span across various cutting-edge sectors such as Fintech, EntrepriseTech, 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. National Startup Advisory Council : The Government in January 2020 notified constitution of the National Startup Advisory Council to advise the Government on measures  needed  to  build  a  strong  ecosystem  for  nurturing  innovation  and startups in the country to drive sustainable economic growth and generate large scale employment opportunities. Besides the ex-officio members, the council has a  number of non-official  members,  representing  various  stakeholders  from  the startup ecosystem.
13. Startup  India:  The  Way  Ahead :  Startup  India:  The  Way  Ahead  at  5  years celebration of Startup India was unveiled 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.
14. 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. The Scheme aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and  commercialization.  Rs.  945  crore  has  been  sanctioned  under  the  SISFS Scheme for period of 4 years starting from 2021-22.

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