Lok Sabha Question No. 1279 (UNSTARRED), answered on 2016-07-25
Subject: Startup India Programme
Ministry: COMMERCE AND INDUSTRY
Asked by: RAOSAHEB PATIL DANVE

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT OF INDUSTRIAL POLICY & PROMOTION

## LOK SABHA

## UNSTARRED QUESTION NO. 1279. TO BE ANSWERED ON MONDAY, THE 25 TH  JULY, 2016.

## STARTUP INDIA PROGRAMME

## 1279.  SHRI RAOSAHEB DANVE PATIL:

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

## वाणिज् यवव द्यग ं ्री

- (a) whether  the  Government  proposes  to  launch  the  start  up  India  and  Stand  up  India programmes to boost entrepreneurship at grass-root levels;
- (b) if so, the details and the salient features thereof;
- (c) whether the Government has finalised the action plan for the purpose and if so, the details thereof; and
- (d) whether  the  Government  proposes  to  link  the  said  programme  with  the  IITs,  IIMs, NITs  etc.  and  if  so,  the  details  thereof  along  with  the  benefits  likely  to  accrue therefrom?

## ANSWER

## वाणिज् यवव द्यग ााज् यं ्रीस् वतं ््रभााा(स्रींतंरीिरंमलााीरीतंाांि( THE MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF COMMERCE & INDUSTRY (SHRIMATI NIRMALA SITHARAMAN)

- (a) to (c): Startup India is a flagship initiative launched by the Government of India on 16 th January,  2016  to  build  a  strong  eco-system  for  nurturing  innovation  and startups  in  the  country  which  will  drive  economic  growth  and  generate  large scale employment opportunities.  The Government through this initiative aims to  empower  startups  to  grow  through  innovation  and  design.      The  Standup India  scheme  was  launched  on  5 th April,  2016  to  facilitate  bank  loans  from Scheduled Commercial Banks (SCBs) between Rs.10 lakh to Rs.1 Crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) and one woman per bank  branch  for  setting  up  a  greenfield  enterprise  in  trading,  services  or manufacturing  sector.    The  scheme  is  expected  to  benefit  at  least  2.5  lakh borrowers.

Each enterprise will provide jobs depending on the nature of its operation.

The salient features of Startup India are as follows:

- i. Simplification and Handholding
2.  Simple Compliance Regime for startups  based on Self-certification
3.  Launch  of  Mobile  app  and  Portal  for  compliance  and  information exchange
4.  Startup  India  Hub  to  handhold  startups  during  various  phases  of their development
5.  Legal  support    and  fast-tracking  patent  examination  at  reduced costs
6.  Relaxed norms of public procurement for startups
7.  Faster exit for startups

## ii. Funding support and Incentives

-  Providing funding support through a Fund of Funds with a corpus of Rupees 10,000 crore
-  Credit guarantee fund for startups
-  Tax exemption on capital gains invested in Fund of Funds
-  Tax exemption to startups for 3 years

## iii. Industry-Academia Partnership and Incubation

-  Organizing  Startup  Fests  to  showcase  innovations  and  providing collaboration platforms
-  Launch of Atal Innovation Mission (AIM) with Self -Employment and Talent Utilization (SETU) Program of NITI Aayog
-  Harnessing private sector expertise for setting up incubators
-  Setting up of 7 new research parks modeled on the Research Park at IIT Madras
-  Launching of innovation focused programs for students.
-  Annual  Incubator  Grand  Challenge  to  promote  good  practices among incubators.

## iv.  Credit Guarantee Fund

The  initiative  provides  for  creating  a  credit  guarantee  fund  for  startups through Small Industries Development Bank of India (SIDBI) with a Corpus of Rs.500 crore per year for the next four years.

With this Action Plan the Government intends to accelerate spreading of the startup movement:

-  From  digital/technology  sector  to  a  wide  array  of  sectors  including agriculture, manufacturing, social sector, healthcare, education, etc.; and
-  From existing tier 1 cities to tier 2 and tier 3 cities including semi-urban and rural areas.

The  progress  on  the  action  points  of  the  Startup  India  Action  plan  is Annexed.

- (d): The Action Plan envisages setting up of 7 New Research Parks modeled on the  Research  Park  at  IIT  Madras  at  IITs  in  Guwahati,  Hyderabad,  Kanpur, Kharagpur, Bangalore, Gandhinagar and Delhi and setting-up/scaling-up of 18 Technology  Business  Incubators  (TBIs)  at  NITs/IITs/IIMs  etc.  as  per  the funding model of Department of Science and Technology.  Startups will be able to access the facilities of the Research parks and Incubators and also receive the required support to give shape to their ideas.

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## ANNEXURE  REFERRED  TO  IN  REPLY  TO  PART  (c)  OF  THE  LOK  SABHA UNSTARRED QUESTION NO.1279 FOR ANSWER ON 25.07.2016.

## The measures which have been implemented under Startup Action plan are as follows:

## Action points

Startup India Portal and Mobile App: These have been launched as online platform for  providing  updates,  information,  recognition  and  eligibility  certificates  to  Startups and other stakeholders

Startup  India  Hub: Startup  India  Hub  was  operationalised  on  1st  April  2016  to resolve queries and provide handholding support to Startups. The hub has been able to  resolve  12,290  queries  received  from  Startups  through  telephone,  email  and Twitter. To seek clarifications  pertaining to  Certificate  of Recognition as  a  'Startup', Certificate  of  Eligibility  to  avail  tax  benefits,  seeking  information  on  incubators  or funding,  one  can  get  in  touch  with  the  Hub  on  Toll-Free  number: 1800115565 or email:  id dipp-startups@nic.in. Dedicated  professionals  are  handling  over  200 queries per day. DIPP has requested State governments and administration of Union Territories to set up hub as well as incubators to help Startups during various stages of their life cycle.

Fund of Funds: A 'fund of funds' of INR 10,000 crores to support innovation driven Startups has been established which shall be managed by SIDBI. The fund will invest in  SEBI  registered  Alternative  Investment  Funds  (AIFs)  which,  in  turn,  will  invest  in Startups. It will act as an enabler to attract private capital in the form of equity, quasiequity, soft loans and other risk capital for Startups. Rs. 500 crore has been released to  SIDBI  in  FY2015-16  and  Rs.  600  crore  in  FY2016-17.  First  meeting  of  Venture Capital  Investment  Committee  (VCIC)  was  held  on  12 th July,  2016,  wherein  13 proposals were examined for funding under FFS and 8 were recommended.

Tax Incentives: The Finance Act, 2016 Section 80- IAC has provision for Startups (Companies and LLPs) to get income tax exemption for 3 years in a block of 5 years, if they are incorporated between 1st April 2016 and 31st March 2019. To avail these benefits a Startup must get a Certificate of Eligibility from the Inter-Ministerial Board.

Tax exemption on investments above Fair Market Value have been introduced on 14 June 2016for investments made in Startups.

Self-Certification: CPCB  has  exempted  industries  in  'white'  category  from  all  the applicable self-certifications under  the 3 environment  related Acts (The water (Prevention  &  Control  of  Pollution)  Act,  1974;  The  Water  (Prevention  &  Control  of Pollution)  Cess  (Amendment)  Act,  2003  and  The  Air  (Prevention  &  Control  of Pollution) Act, 1981) listed in the Startup India Action Plan.

Atal  Innovation  Mission  (AIM): The  guidelines for  harnessing private sector expertise  to  set  up  incubators,  organizing  annual  grand  challenge  for  innovative solutions to  problems faced by industry and those posed by ministries as well as a grand  challenge  for  incubators  and  establishment  of  tinkering  labs  have  been formulated and published on NITI Aayog's and Startup India websites

Relaxed Norms for Public Procurement : Relaxed norms for public procurement for micro  and  small  enterprises  have  been  provisioned  in  the  Procurement  Policy  of Ministry of MSME.

IPR  Benefits: A  panel  of  facilitators  has  been  constituted  for  assistance  in  filing Intellectual Property (IP) applications. DIPP would bear the facilitation cost on behalf of Startups and also provide rebate in the statutory fee for filing application. To avail IPR-related benefits (rebate in fee and free of cost facilitation in filing IPR applications), a Startup is required to obtain a Certificate of Recognition from DIPP. Guidelines  of  the  Scheme  for  Facilitating  Start-ups  Intellectual  Property  Protection (SIPP) has  been published.  Facilitators  shall  provide  assistance  to  startups  in  filing and  disposal  of  IP  applications  related  to  patents,  trademarks  and  design  under relevant Acts. Fast track mechanisms of startup patent applications has been enabled to allow startups to realise the value of their IPRs at the earliest. Further, to enable startups to reduce costs in their crucial formative years, startups shall be provided a rebate of 80% in filing patents (Patent Amendment Rules 2016, May 2016).

Additionally, the following steps have been undertaken to provide an impetus to the overall progress of the initiative:

-  Chief Secretaries of all States and Administrators of all Union Territories have been requested to partner with DIPP in taking the Startup India initiative forward;
-  Top 50 companies in India have been requested to contribute towards strengthening the incubation facilities in the country through their Corporate Social Responsibility (CSR) initiatives;
-  List  of  recognized  incubators  has  been  augmented  to  provide  more  avenues  to Startups to obtain mentoring support. 20 industry bodies and organisations have been recognized by DIPP who will assess the innovative nature of Startups and provide certificates to enable them to get recognition from DIPP;
-  For incubators to get  recognition  by  Government of India a module to recognize incubators  has  been  launched.  This  will  allow  them  to  issue  recommendation letters to Startups.

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