With the beginning of year 2016, we all have been meddling to know what is in store with the Prime Minister, Narendra Modi’s much-awaited Startup Action Plan. As after its release, we realize that it is one of the most pivotal initiatives undertaken by the Government of India and indeed the Digital India to promote the entrepreneurial spirit across the nation.
India, being the world’s third largest number of technology start-ups after UK and the US, driving billions of dollars in funding every year, has witnessed a tinge of success with the arrival of Startup Action Plan.
Let’s unveil the top 8 takeaways from the Modi’s speech, formulated to support the young entrepreneurs to stay and work in India:
Takeaway 1: Instant Startup setup
Entrepreneurs can now set up a startup just by filling a simple form via online mobile app or online portal and get their startup running. Such a development will ease out the startup formation process and reduce in-ground challenges.
Takeaway 2: No Income Tax during 1st Three Years of a Start-up
With an aim to uplift the profits earned by start-ups, entrepreneurs will be exempt from the payment of income tax during the first three years of their start-up business. Moreover, they will also be able to save 20% of tax on the capital gains made on their yearly investments.
Takeaway 3: Funding Support of Rs. 2,500 Crore
To support funding to young entrepreneurs who go overseas to start a new business, the government will support all the startups with an initial amount of Rs.2, 500 crore, which would rise to Rs. 10, 000 crore over a period of 4 years. The initiative would help businesses with the flow of venture capital by providing guarantee against credit risks.
Takeaway 4: Patent protection at Lower Costs
To help startups protect IPRs, the government is also supporting a fast-tracking patent examination at lesser costs. The step would encourage startups with adoption of Intellectual Property Rights.
Takeaway 5: Startups will get 80% Rebate on Filling Patent Applications
To motivate the young entrepreneurs around the nation, government is providing 80% rebate in filling patents in context of other companies. Furthermore, the cost of filling designs, patents, and trademarks will be paid by the government only.
Takeaway 6: Inauguration of Atal Innovation Mission
Atal Innovation Mission has also been initiated to encourage innovation, creativity and talent amongst the people. The mission is designed to go a long way in making job-seekers as successful job-creators and employers, entrepreneurs as successful startup businesses.
Takeaway 7: Credit Guarantee Fund
Government has aligned a National Credit Guarantee Trust Company for a budgetary allocation of Rs. 500, crore to startups for the next four years. The step will likely to be beneficial for small startups with lesser funds, as well as, for medium-sized ones who do not want to come in the risk zone for another couple of years.
Takeaway 8: Startup India hub
Another takeaway is the startup India hub, which is poised to be created as a single platform of connection for all the startup or we can say the entire startup ecosystem to exchange knowledge and enable information/knowledge across each other.
Promoting a Culture of Entrepreneurship
The above initiatives announced at the Startup India launch indicate that setting up a start-up will be less challenging for the Indian entrepreneurs. Bipin Preet Singh, CEO, MobiKwik, senses a lot of excitement around startups with the given flow capital. According to the new startup entrepreneur, the taxation policy needs to be revamped and make it easier for young entrepreneurs.
The newly launched Startup Action Plan has unquestionably fused a serious hope in the hearts of potential startup owners. Let us know how the wind blows for the entrepreneurs in this New Year.
Hope you are flooded with a plethora of questions popping up in your mind with the startup action plan.
Impact of Startup Action Plan- Some Handpicked Startups.
MySmartPrice: Mysmartprice, Hyderabad is in the business of helping people in their shopping decisions with online shopping research. It raised Rs. 8 crore so far from venture capital funds Accel and Helion over two rounds. It faces the challenge of hiring the right talent that suits the company’s culture. With the new start-up action plan, recruiting more workforce will not be a challenge anymore, with sufficient funds the company can avail.
Shopclues: Shopclues, Gurgaon, New Delhi, is an E-commerce marketplace founded by Sandeep Agarwal, Radhika Agarwal and Sanjay Sethi. Incepted 5 years ago, the startup has been funded by Tiger Global, Nexus Venture Partners, Helion Venture Partners to the tune of $130 million. While, its biggest challenge is to differentiate, it is hopeful that the organization would go miles in gearing up its efforts to achieve a distinct name across the globe, with patent protection at cheaper costs.
Edureka: Founded in 2011 by Loveleen Bhatia and Kapil Tyagi in 2011, Edureka specializes in offering education through virtual classrooms. This has been the ultimate motive for the entity in making learning interesting, easy and affordable for students across the globe. Located in Bangalore, funded with $250,000 by angel investors, the firm will no longer face issue of adding new courses with capital funds it can avail owing to the advancement of the new startup action plan.
Culture Machine: Culture Machine Media is into the business of digital video content production. Situated in Bangalore, the organization is funded by Tiger Global and Zodius Capital. Its biggest challenge is fundraising and creation of something out of nothing. The startup need not to worry anymore about the funds as the new startup plan is its financial rescue.
How do we see Recruitment Benefits from this New Startup Action Plan?
Entrepreneurs experiencing hiring issues till date because of lacking funds for infrastructural expense can now revamp their plans with the accessibility of capital funds endorsed by the government. Organizations now need not to stress over tax deduction in the initial years owing to the new startup action plan and revamp their organization’s models with the convenience of patent policy, tax free benefit, capital assets, patent assurance and more from the rundown specified above.
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