The whole world saw the launch of an Ambitious programme in India which is “Start Up India Stand Up India Scheme”. Many of us are still not clear about the goal, highlights and features of Start Up India programme. Well, this article will take you through the If’s & But’s of the programme. By this programme, Central Govt. intends to make future Job Creators rather than Job seekers. So initially startup will have to focus on grabbing & utilizing the opportunities rather than only running behind money.
Purpose of the Scheme
Any economy of a country depends on working population. Larger the working population, better it would be. World has recognized the potential of Indian Work force which has intelligence & hard working capacity. Many people dream of starting up their own business, but due to financial or other similar issues, they move to employment. In order to fulfill its mission to create job creators, Central Govt. has come one step forward to support & give a push to such workforce to start their own business and make their dream come true.
- E-registration will be done. Forms will be made available from 1st April 2016
- Self-certification system will be implemented in order to avoid unnecessary delay
- Dedicated Website & Mobile App will be launched
- No Govt. Official Inspection during first 3 years
- No Income Tax for first 3 years
- 80% reduction in the application fee of Start up patent
- Easy Exit policy
- Rs. 10,000 Crores Fund will be established for addressing the financial needs of start ups
- Inclusion in Credit Guarantee Fund
- Special Arrangements for Female Applicants
- Introduction of Atal Innovation Mission. Innovation courses will be started for students
- Through Incubator Grade Challenge, Govt. will identify 10 incubators, who have potential to become world class. Financial assistance will be made available to these incubators.
As per Govt. sources, a simple form for e-registration will be made available from 1st April 2016. Applicants have to fill-up all details & submit with required documents online. Submitted documents will be reviewed and if accepted, Govt. will provided necessary assistance.
After going through above, there’s no doubt the measures are significant, but they raises a question, are all the startups really eligible for the benefits that were announced? Let’s have a look at the terms & conditions of the scheme for availing the benefit of scheme.
Here’s a quick analysis of the eligibility criteria for a Start-up unit:
- DIPP may publish a ‘negative’ list of funds which are not eligible for this initiative.
- “Incubator” means an organization designed to accelerate the growth and success of entrepreneurial companies through an array of business support resources and services that could include physical space, capital, coaching, common services, and networking connections.
- One of the eligibility criteria states that “The product or service should be a new one or a significantly improved version of existing services or products.” Let’s take the example of startups who are engaged in creating and developing online marketplaces like Flipkart and Amazon. So a new startup engaged in the same field may not be eligible unless its product is significantly improved than what existing players provide.
- Another eligibility criteria states that the startup should get a recommendation letter from the recognized incubator cell or be recognized by the GoI or should be funded by recognized funds. Now this will be quite a task for startups.
Based on estimate, going by these criteria, roughly 60% of existing startups could be rendered ineligible for the Startup India plan.
[Author is a Chartered Accountant based in Nasik, Maharashtra. He can be contacted at firstname.lastname@example.org, 9920792030]