Raj K Pathak

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Finally a startup definition from the government to ensure that deserving startups get benifits

February 23rd, 2016

The government has finally come out with a Startup definition to ensure that only deserving companies get the benefits of the ‘Startup India Action Plan’ and to create a conducive environment for startups in India.

The government notification states the following as a startup definition:

  1. To have at least 20% equity funding by any incubation, angel or private equity fund, an accelerator or angel network duly registered with the Securities and Exchange Board of India endorsing the innovative nature of the business.
  2. All such companies would fall under the category of startups up to five years from the date of incorporation as long as their turnover does not exceeded Rs 25 crore
  3. In order to boost innovation, such companies should be engaged in development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.

The process of recognizing a startup would be done through a mobile application/portal. However, till the time, the mobile application becomes operational, alternative arrangement will be made by the Department of Industrial Policy and Promotion (DIPP).


Prime Minister Narendra Modi launched the ‘Startup India’ initiative in January this year, announcing a string of incentives for startups to get greater access to capital, incubation and talent. Modi announced

  • Compliance regime based on self certification
  • No inspection till 3 years
  • Startup India Hub
  • Starting a startup in 1 day using Startup app portal
  • Fast track mechanism of startup patent application
  • 80% rebate on filing startups patents by startups
  • Relaxed norms for Public procurement for Startups
  • Faster exit for startups, introduction of Bankruptcy Bill,2015
  • Funding support through Fund of Funds with a corpus of Rs10,000 crore in 4 years
  • Credit Guarantee fund for startups
  • Tax Exemption on Capital Gains
  • Tax exemptions to startups for 3 years
  • Launch of Atal Innovation mission( AIM)
  • Creation of Pre- Incubation and Incubation labs, providing seed capital to startups
  • Setting up of 35 incubators, 7 new research parks
  • Innovation focused programmes in schools
  • Startup fests should be set up

( Copied from KNOW STARTUP dated  Feb 23.2.2016)

#Startup India Top 19 takeaways

February 8th, 2016

India is one of the fastest growing entrepreneurial eco-system in the world and 3rd largest after USA & UK.

Indian Govt led by Shri Narendra Modi has understood that in a country like India, only option remains to solve the un-employment problem is to catalyse youth entrepreneurship and focus on innovative startups which have the capability to create jobs as well as wealth.


The much awaited unveiling of #StartupIndia by Prime Minister of India has brought lots of positivity  among the entrepreneurs in India. With the Government’s support, a startup can be built in a day which will definitely motivate many young entrepreneurs to turn ideas into action thereby increasing the jobs in India as well.


Prime Minister Narendra Modi had announced the ‘Startup India, Standup India’ initiative in his Independence Day address last year. Jan 16th, 2016 PM Modi unveiled the action plan for startups in the country. He announced a self-certification scheme in respect of nine labour and environment laws and said there will be no inspection during the first three years of launch of the venture.


Here are the top takeaways announced for Startups.

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.

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.

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

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.

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

18. Relaxed norms of public procurement for startups

19. Faster exits for startups