GOVERNMENT OF INDIA
MINISTRY OF COMMERCE & INDUSTRY
DEPARTMENT OF INDUSTRIAL POLICY & PROMOTION
LOK SABHA
UNSTARRED QUESTION NO. 2923.
TO BE ANSWERED ON MONDAY, THE 20TH MARCH, 2017.
STARTUP INDIA PROGRAMME
Will the Minister of COMMERCE AND INDUSTRY be pleased to state:
(a) whether the Government has launched Startup India Programme to promote new entrepreneurs in the country;
(b) if so, the details thereof including the funds allocated/utilised for the purpose and the number of startups set up so far in the country;
(c) whether certain startups have been closed down in the country and if so, the details thereof and the reasons therefor; and
(d) the corrective steps taken by the Government to promote startups in the country?
ANSWER
THE MINISTER OF STATE (INDEPENDENT CHARGE)
OF THE MINISTRY OF COMMERCE & INDUSTRY
(SHRIMATI NIRMALA SITHARAMAN)
(a): Yes, Madam. Government has launched the Startup India Action Plan on 16th January, 2016 with an objective of building a strong eco-system for nurturing innovation and startups in the country.
(b): The Startup India Action Plan consists of 19 action items spanning across areas such as “Simplification and handholding”, “Funding support and incentives” and “Industryacademia partnership and incubation”. For providing fund support to Startups, Government has created a ‘Fund of Funds for Startups (FFS)’, which is being managed by Small Industries Bank of India (SIDBI) with a corpus of Rs. 10,000 crore. The FFS shall contribute to the corpus of Alternative Investment funds (AIFs) for investing in equity and equity linked instruments of various Startups. Rs. 500 crores was released towards the FFS corpus in FY 2015-16 and Rs. 100 crores has been released in FY 2016-17. As on 10.03.2017, 713 startups have been recognized by Department of Industrial Policy and Promotion under startup India programme.
(c): No data is available regarding the number of Startups which have been closed down in the country.
(d): The details of steps taken by the Government to promote startups in the country is given in the Annexure
Steps Undertaken
1. Recognition
1835 applications have been received for recognition, out of which 713 had the required documents and have been recognised as Startups by DIPP.
146 applications could be considered for tax benefits, out of which, 10 Startups have been approved by IMB for availing tax benefit
2. Compliance Regime based on Self-Certification
List of 36 industries in “white” category has been published on CPCB’s website. CPCB has exempted such industries from all the applicable self-certifications under 3 Environment related Acts listed in the Startup India Action Plan
Ministry of Skill Development and Entrepreneurship (MSDE) has issued advisory to states to allow Startups to self-certify compliance with the Apprenticeship Rules, 1992 of Apprenticeship Act, 1961
Startups have been allowed to self-certify compliance in respect of 6 Labour laws; 12 states have confirmed compliance to the advisory issued on 12.01.2016 by Ministry of Labour and Employment (MoLE)
3. Startup India Hub
37,195 queries have been handled by the Startup India Hub
267 Startups have been mentored for incubation and funding support
4. Rolling out of Mobile App and Portal
Startup India portal has been developed to provide access to the following:
Startup recognition
Incubator recognition
Advertising space for Startups
Learning & development module
The portal acts as a one stop solution for all queries related to the Startup India initiative
Startup India mobile app has been developed to provide services such as Startup recognition, Incubator recognition, etc. as well as, notifications and information to its users on-the-go
5. Legal Support and Fast-tracking Patent Examination at Lower Costs
Panel of over 409 facilitators for Patent and Design and 475 facilitators for Trademark applications has been constituted
104 applications have received rebate of up to 80% on patent fees and have also received legal assistance free of cost
25 Startups have made request for expedited examination (Form 18(A)) whereas, Trademark facilitation has been extended to 47 Startups
6. Relaxed Norms of Public Procurement for Startups
Relaxed norms for public procurement for micro, small and other enterprises have been provisioned in the Procurement Policy by the Ministry of Micro, Small and Medium Enterprise
All Central Ministries / Departments /Department of Public Enterprises/ Central Public Sector Undertakings have been authorised to relax conditions of prior experience and prior turnover with respect to MSEs in all public procurements subject to meeting quality and technical specifications
States have been issues an advisory to comply with the same
7. Faster Exit for Startups
Under the Insolvency and Bankruptcy Code 2016, firms which are recognised as fast track firms by MCA will be able to wind up their business in 90 days as compared to the 180 day period for other firms
Liquidation provisions under the code have been notified on 9th December 2016
MCA is in the process of notifying Startups as ‘fast track firms’
8. Providing Funding Support through Fund of Funds (FFS) with a Corpus of INR 10,000 crore
The fund of INR 10,000 crore shall be released over two Finance Commission cycles, that is, by the year 2025
Rs. 500 crore has been released to SIDBI in FY16
Rs. 129 crore has been sanctioned, out of which, Rs. 114 crore has been released by SIDBI to 5 Venture Funds for the FY2016-17
9. Tax Exemption on Capital Gains
Section 54 EE has been introduced under the Finance Act, 2016 which provides for exemption of capital gain arising out of transfer of long term capital asset (not exceeding INR 50 lakhs in a financial year) invested in a fund notified by Central Government
Section 54 GB of Income-tax Act, 1961 has been amended to provide exemption from tax on capital gains arising out of sale of residential house or a residential plot of land if the amount of net consideration is invested in equity shares of an eligible Startup for utilizing the same to purchase specified asset
10. Tax Exemption to Startups for 3 Years
In the Union Budget 2017-18, the Government has announced that a Startup would be able to avail income tax exemption for three consecutive assessment years out of a block of seven years, which was earlier five years