The Startup India Scheme is an initiative taken by the Government of India in 2016 primarily to support startups and generate employment. Since its launch, this scheme has started several programs for building a startup ecosystem in the country. It aims at transforming India from a country of job seekers to that of job creators. From simplification of work to networking opportunities, the Scheme aims to promote entrepreneurship in the country. Let's understand how this initiative has helped the Indian business culture!
Under this scheme, a startup is given access to use networking opportunities, finance support, government tenders, and much more facilities. The primary objective of this program is to promote startups, generate employment, and create wealth. The scheme works under the supervision of the Department for Industrial Policy and Promotion (DPIIT).
The plan for Startup India Scheme is based on two factors, the simplification of work and financial support. Simplification of work focuses on reducing the time taken to perform basic activities, and financial support motivates individuals to build a business.
Every business has to meet certain eligibility criteria to register under the startup India scheme. The eligibility for such registration is as given below:
1. The company must be a private limited company or a limited liability partnership.
2. It should not be older than five years, and the turnover must not exceed 25 crores.
3. The firm should be funded by an Incubation fund or private equity fund.
4. The firm should deal in some innovative products.
5. It must have a recommendation letter by incubation.
6. The funds (Ex: Angel fund, private equity fund, etc.) must be registered with the Security Exchange Board of India (SEBI).
7. The firm must obtain the approval of the Department for Industrial Policy and Promotion (DPIIT).
8. The business should not be an outcome of splitting up or reconstruction of an already existing business.
The benefits of the Startup India Scheme can be categorized as given below:
1. Financial benefits- It provides a lot of financial benefits to registered startups. For example, Patent based companies do not need to incur heavy expenses to acquire a patent. Under this scheme, the Indian government provides an 80% reduction in patent costs.
2. Tax benefits- Startups registered under this scheme also enjoy Income tax benefits. The government exempts their three years of income taxes post the year of incorporation. Moreover, they can claim exemption from tax claims on capital gains considering an investment is made in specified funds. This way, the program provides tax benefits to the registered under the scheme.
3. Registration benefits- The process of registration feels like running a marathon. Everyone believes that registration is more difficult than running a business. While the old regime was long and complex, the scheme has facilitated the process of registration. The portal provides a single doubt and problem-solving window for business owners.
4. Government Tenders- Some businesses need government tenders before they start operating and functioning. Individuals who want to work in large and heavily funded projects require government tenders. But it is not an easy task. This scheme provides priority tenders without much hassle and financial burden to overcome the traditional procedure of acquiring a government tender.
5. Networking Opportunities- Networking is the need of the hour in modern business. It gives opportunities for connecting with industry leaders and experts in various industries. The government provides networking opportunities by conducting two startup fests yearly. These fests are conducted both on the national and international levels. The scheme also delivers many awareness workshops for early-age startups.
Let's see a brief about how to apply for the Startup India Program. The application procedure is as given below:
1. Firstly, log on to the Startup India Portal.
2. Enter the legal entity.
3. Fill in your incorporation date.
4. Enter the PAN details.
5. Provide details regarding your address, pin code, and state.
6. Enter the details of authorized representatives, directors, and partners.
7. Upload essential documents and self-certificates in a specified manner.
8. Lastly, file the registration certificate of the company.
Every opportunity come with some challenges, and here are some challenges faced by the Startup India initiative:
Generally, startups shut down within two years of commencement because of a lack of execution and expertise in skills.
They tend to achieve a lot in a short period and often fail to generate profits.
1. The government has not set a long-term vision of the working of the Startup India Scheme.
2. Finding a competent workforce is a huge challenge for an early-stage business.
Altogether, the Startup India Scheme is a suite of tools that can boost the business culture of India. The scheme has proved to be fruitful since its inception and hopefully continues to do so!
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