The major initiative of the Government of India, the Startup India Scheme, 2016 was launched to promote entrepreneurship across the country and encourage innovation. The objective of this scheme is to make India a global startup hub, develop new businesses, generate employment and create a permanent business ecosystem. The government provides facilities such as tax exemption, subsidy, easy rules and finance availability to startups, which gives convenience to budding businesses.
To avail the startup India scheme, companies have to meet certain eligibility criteria. The company is required to be registered, whether it is a limited company, partnership firm or limited liability partnership. The company should not be more than 10 years old and its turnover in the last financial years should not exceed ₹ 100 crore. In addition, the main focus of startups should be on innovation, product or service development, or expansion of business. It is noteworthy that under the scheme, companies are eligible for restructuring or division of an existing enterprise.
In the case of financing, the government has created Fund of Funds for Startups (FFS) under a fund of ₹ 10,000 crore. This fund does not invest directly in startups, but provides finance through Sebi-registered venture capital funds. This fund provides startups with equity funding as well as loans and credit guarantee. Finance is provided on the basis of business phase, field and capacity, which is more convenient for beginner entrepreneurs than traditional bank funding.
There are many benefits under the Startup India Scheme, such as three years exemption in income tax, relaxation from capital gains tax, patent application fee exemption and the process of closing quickly. In addition, the facility of self-scripting under labor and environmental laws makes it easier to follow the rules. The scheme also provides opportunities to connect networking, mentoring, industry experts and investors, who carry on the path of success to the budding businesses.
Through this scheme, the Government of India has not only provided financial assistance to the young entrepreneurs of the country, but has also tried to ensure their success by supporting them in every aspect of business. Startup India has now become a major pillar of the country’s economic progress and innovative thinking.