The main goal of the startup scheme in India is to develop and innovate goods and services while increasing employment possibilities in India. This would enhance the economy and further increase the employment rate. Prime Minister Narendra Modi announced the government of India’s commitment to increase wealth and job opportunities on January 16 via The Start-up India Scheme.
Startup schemes in India are launched to help entrepreneurs start a new venture smoothly, schemes like PM Mudra scheme, startup Seed Fund and others.
What is government startup scheme?
The main goals of this programme are to encourage the nation’s creative brains, which will result in a decline in the unemployment rate and motivate youngsters who appreciate innovation.
The Startup India programme is primarily built upon the following three pillars:
- Giving Financial assistance and incentives to many startups in the nation.
- Offering partnerships and incubation between industry and academia.
- Simplifying and supporting.
Action Plan of the startup India Initiative scheme
To encourage new entrepreneurs, this initiative makes their work easier. That consists of the following government actions:
- The government would establish Startup India centres where all the processes associated with formation, registration, grievance resolution, etc., are carried out.
- The government would create a simple application process and an online gateway to enable registration at any time and from any location.
- Startups acquire and register patents quickly and more easily with the government’s support.
- Last but not least, the Insolvency and Bankruptcy Bill of 2015 facilitates quick winding up of startups. The new business can wind up within 90 days of incorporation.
Who is eligible for the Startup India scheme?
To be eligible for this program, you must meet the following requirements.
- The new business must be a limited liability partnership or a private limited corporation. Other legal companies are not permitted. For instance, if you wish to be eligible for this programme, you cannot be a closed corporation or a sole owner.
- The Department of Industrial Policy and Promotion must approve your business plan. This unique government division was established in 2019. Its objective is to encourage the growth of India’s industrial sector. Additionally, it is in charge of supporting economic investment, particularly foreign and startup investment. Your startup must receive approval from this organization because it must determine whether it is a worthy concept with a likelihood of success.
- You need a recommendation letter from a startup incubator to be eligible. For entrepreneurs, this is undoubtedly the hardest obstacle to overcome. In essence, you must have already contacted and been approved by a startup incubator. It would be best to convince the incubator that your idea has legs and a decent probability of success. You will need to work hand in hand with them to do this. Only after that will you be able to request a recommendation letter.
- Your startup must offer unique concepts or goods. Unfortunately, this concept is not intended for any typical business. They desire something extraordinary. You must have a truly creative business concept or product. Something with the potential to positively impact billions of people. You won’t be eligible if your market plan involves selling food.
- Your startup must be brand-new. They do not want to finance existing firms. Therefore, your startup cannot be more than five years old.
- Additionally, they reject companies that are already profitable. Your start-annual up’s revenue should not exceed $25 billion.
- Your startup must be newly opened. It cannot consist of a company that has undergone division or development.
What is the objective of the startup scheme?
The Startup India Scheme focuses on building a robust ecosystem to support innovation and businesses nationwide. Additionally, such a move would promote long-term economic expansion and generate significant employment prospects. Additionally, it lessens the regulatory load on startups, allowing them to concentrate on their main line of business and maintain minimal compliance expenses.
Advantages of The Startup India Scheme:
Following the commencement of the Startup India programme, the government introduced several other initiatives to support the country’s startup ecosystem, including the I-MADE programme, which aimed to support Indian business owners in creating one million phone app startups. The Pradhan Mantri Mudra Yojana was another initiative the Indian government had started with the goal of offering low-interest loans to entrepreneurs from low-income families. Some other benefits include the following:
- Tax Exemption Permitting 80IAC
- Easy company dissolution
- Startups can self-certify compliance with 3 environmental and 6 labour laws using a straightforward online process.
- Through this platform, startups can connect with numerous other startups.
- Startups will be exempt from income tax for 3 years if they obtain a certification from the Inter-Ministerial Board (IMB).
- Aids in obtaining funding from investors.
- The easy application process for government tenders.
- Easier standards for public procurement.
- Fast track and up to 80% off when filing a patent for IPR protection and patent.
Registration Process:
After completing the online registration form with all the necessary information, the profile is reviewed for 24 to 48 hours. Your registration email address will receive an OTP, which you must provide to set up your profile. Startups can then seek DPIIT recognition after that.
FAQ
Is startup tax-free in India?
For three years, the startups have been exempt from paying income tax on their profits, provided they do not distribute dividends under section 80-IAC of the Income Tax Act of 1961. There are a few regulations, and one could visit the startup India web portal for more information.
What is the interest rate for the Startup India scheme?
The stand-up India scheme’s interest rate will be the lowest one the bank offers for that particular category. However, the interest rate cannot be higher than the MCLR 3% Tenor premium.
How many schemes are there under the Startup India scheme?
Many schemes are related to startup India schemes like the PM Mudra scheme, Startup India seed fund and others. The start India portal provides a detailed list with necessary information on all related schemes.
What is government startup scheme?
The Indian government has launched various initiatives under startup schemes in India, intending to encourage more and more people to start their businesses by offering various perks and exemptions to business owners.
Who is eligible for the Startup India scheme?
As mentioned above, there are a few criteria to be eligible for the startup India scheme. The startup has to be recent and innovative while following the other guidelines laid by the startup India scheme on their website.
What kind of businesses are not eligible for Startup India scheme?
The businesses that come under proprietorship or public limited companies are not eligible applicants.
Conclusion
The Startup India scheme is a beneficial initiative started by India’s government and would support many startups throughout the country. It helps startups in their early stage with legality and other supportive steps to grow businesses that are profitable and can generate employment opportunities.