Here are the top takeaways from the prime minister’s speech.
1. Compliance regime based on self certification
The objective of compliance regime based on self certification is to reduce the regulatory burden on startups. This self-certification will apply to laws like payment of gratuity, contract labour, employees provident fund, water and air pollution acts.
2. Startup India hub
A startup India hub will be created as a single point of contact for the entire startup ecosystem to enable knowledge exchange and access to funding. It will function in a hub and spoke model with central and state governments, Indian and foreign VCs, angel networks, banks, incubators, legal partners, consultants, universities and R&D institutions. The hub will assist startups in obtaining financing, and organise mentorship programs to encourage knowledge exchange.
3. Simplifying the startup process
A startup will be to able to set up by just filling up a short form through a mobile app and online portal. A mobile app will be launched on April 1 through which startups can be registered in a day. There will also be a portal for clearances, approvals and registrations.
4. Patent protection
The government is also working on a legal support for fast-tracking patent examination at lower costs. It will promote awareness and adoption of Intellectual Property Rights (IPRs) by startups and help them protect and commercialise IPRs.
5. Funds of funds with a corpus of Rs 10,000 crore
In order to provide funding support to startups, the government will set up a fund with an initial corpus of Rs 2,500 crore and a total corpus of Rs 10,000 crore over four years. The fund would be managed by private professionals drawn from the industry while LIC will be a co-investor in the fund. The credit guarantee fund for start-ups would help flow of venture debt from the banking system to start-ups by standing guarantee against risks. The fund will participate in the capital of SEBI registered venture funds, and invest in sectors such as manufacturing, agriculture, health, and education.
6. Credit Guarantee Fund
A National Credit Guarantee Trust Company is being envisaged with a budgetary allocation of Rs 500 crore per year for the next four years.
7. Exemption from Capital Gains Tax
Currently, investments by venture capital funds in startups are exempt from this law. Now, the same is being extended to investments made by incubators in startups.
8. Tax exemption for startups
Income tax exemption to startups announced for three years.
9. Tax exemption on investments above Fair Market Value
10. Startup fests
Innovation core programs for students in 5 lakh schools. There will also be an annual incubator grand challenge to create world class incubators.
11. Launch of Atal Innovation Mission
Atal Innovation Mission started to give an impetus to innovation and encourage the talent among the people. The Atal Innovation Mission will establish sector specific incubators and 500 ‘Tinkering Labs’ to promote entrepreneurship, provide pre-incubation training and a seed fund for high-growth startups. Three innovation awards will be given per state and union territory, along with three national awards, as well as a Grand Innovation Challenge Award for finding ultra-low cost solutions for India.
12. Setting up of 35 new incubators in institutions
PPP model being considered for 35 new incubators, 31 innovation centres at national institutes.
13. Setting up of 7 new research parks
Government shall set up seven new research parks – six in IITs, one in IISc with an initial investment of Rs 100 crore each.
14. Promote entrepreneurship in biotechnology
Five new bio clusters, 50 new bio incubators, 150 technology transfer offices and 20 bio connect offices will be established.
15. Innovation focused programmes for students
There will be innovation core programs for students in 5 lakh schools. An innovation core program targeted at school kids aims to source 10 lakh innovations from five lakh schools, out of which the the best 100 would be shortlisted and showcased at an Annual Festival of Innovations, to be held in Rashtrapati Bhavan. A Grand Challenge program called NIDHI (National Initiative for Developing and Harnessing Innovations) shall be instituted through Innovation and Entrepreneurship Development Centres (IEDCs) to support and award INR 10 lakhs to 20 student innovations. Uchhattar Avishkar Yojana, a joint MHRD-DST scheme has earmarked Rs. 250 crore annually to foster “very high quality” research amongst IIT students.
16. Panel of facilitators to provide legal support and assist in filing of patent application
17. 80 per cent rebate on filing patent applications by startups
Launched on a pilot basis for a year, the Central Government shall bear the cost of patents, trademarks and designs for a startup, with an 80 percent rebate to encourage the creation and protection of its intellectual property.
18. Relaxed norms of public procurement for startups
The Central Government, State Government and PSUs will exempt startups in the manufacturing sector from the criteria of “prior experience/ turnover” as long as they have their own manufacturing facility in India, and have the requisite capabilities and are able to fulfil the project requirements.
19. Faster exits for startups
Startups may be wound up within a period of 90 days from making of an application for winding up on a fast track basis, as per the recently tabled Insolvency and Bankruptcy Bill 2015, which has provisions for voluntary closure of businesses. This process will respect the concept of limited liability.