Lok Sabha Question No. 1801 (UNSTARRED), answered on 2021-12-08
Subject: Startups
Ministry: COMMERCE AND INDUSTRY
Asked by: Arvind Dharmapuri

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

## LOK SABHA

## UNSTARRED QUESTION NO. 1801.

TO BE ANSWERED ON WEDNESDAY, THE 8 TH  DECEMBER, 2021.

## STARTUPS

## 1801.  SHRI ARVIND DHARMAPURI:

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

## वाणिज्य  एवं उद्योग मंत्री

- (a) the details of the programmes launched by the Government to promote startups across the country, State/UT-wise including Telangana;
- (b) the details of schemes implemented in Telangana by the Government in this regard; and
- (c) the details of support provided to women-led Startups in the country, State/UTwise, including Telangana?

## 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): To  promote  startups  across  all  the  State/UTs  including  Telangana, Government of India has launched Startup India initiative in 2016. This initiative aims at building a strong ecosystem for nurturing innovation and Startups in the country. In order to meet the objectives of the initiative, Government  has  launched  various  programmes  to  promote  startups across  the  country,  State/UT-wise  including  Telangana  which  are at Annexure-I .
- (b): The  Government  of  India  as  part  of  Startup  India  initiative  has implemented  Fund  of  Funds  for  Startups  Scheme and  Startup  India Seed Fund Scheme to provide financial assistance through Alternative Investment Funds (AIFs) and incubators.

Fund of Funds for Startups (FFS) Scheme :  A corpus of Rs. 10,000 crore has been sanctioned under the FFS Scheme, spread over 14th and 15th Finance Commission cycles. FFS Scheme does not directly provide financial assistance to startups, instead supports  SEBIregistered  Alternative  Investment  Funds  (AIFs),  who  in  turn  invest money  in  growing  Indian  startups  through  equity  and  equity-linked

|      | instruments. AIFs supported under FFS are required to invest at least two times of the amount committed under FFS in startups                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (c): | Promoting women entrepreneurship has been a key national agenda for the Government. Out of the 58,000+ DPIIT recognised startups, 46% of them have at-least one-woman director. Further, under Startup India Seed Fund Scheme (SISFS), as on 06 th December, 2021, 55 women- led startups have been sanctioned financial assistance, out of which 4 startups are from Telangana. Out of these 55 startups, 30 startups have been approved funds of Rs. 1.948 crore, of which Rs. 65 Lakhs is approved to 2 Telangana based startups. Furthermore, under Fund of Funds for Startups (FFS) Scheme, as on |

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## ANNEXURE REFERRED TO IN  REPLY TO PART (a) OF THE  LOK SABHA UNSTARRED QUESTION NO. 1801 FOR ANSWER ON 08.12.2021.

## Programmes launched as part of Startup India Initiative

- i. 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.
- ii. 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.
- 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. 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.  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 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.
- 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 soft-landing 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 visa-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 visa-vis 180 days for other companies.

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## ANNEXURE REFERRED TO IN  REPLY TO PART (c) OF THE  LOK SABHA UNSTARRED QUESTION NO. 1801 FOR ANSWER ON 08.12.2021

## Encouraging Women Entrepreneurship under Startup India Initiative

1.  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.
2.  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 Telangana:-
- i. 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.
- ii. 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.
- iii. 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.
- iv. 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.

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