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)


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