Modi’s Startup India offers 80% reduction in patent filing fees, empowerment of women and more
Indian Prime Minister always claimed he had a 'different thought process'. His ambitious Rs10,000-crore 'Startup India' project that aims to promote a startup culture in India by reducing government interference, simply establishes the fact.
Despite having all the facilities that make India the perfect global startup hotspot, the country sees its entrepreneurs making their way to places like Singapore and the United States which have lesser regulations on startups. As Forbes points out, India's leading startups - like Flipkart, the largest Indian retailer, Freshdesk, the customer support software maker, InMobi, mobile ad agency, and Capillary Technologies, software products firm - have all moved away from the country and are likely to list on the foreign stock exchange.
It seems the government has finally caught on with the basic root cause and come up with this plan. According to Financial Times, preceding the prime minister's speech, finance minister Arun Jaitley expressed his consent regarding this pioneer project. "The world today has changed. Startup India has marked an important change in India's mindset," he said, "In an unregulated environment, it's the survival of the fittest that matters."
Addressing the 2000+ audience in the capital city, Modi said, "Start-up is not just about mobiles and laptops... Start-up does not only mean a company with billions of dollars of money and 2,000 employees. If it is able to provide employment to even five people, it would help in taking the country forward. Young people have to change their mindsets from being job seekers to try and become job creators. Once you become a job creator, you will realise that you are transforming lives," as stated in The Indian Express.
With this statement, the prime minister went on to reveal the entire plan, amidst loud cheering echoing the crowd's excitement. He promised a faster patent registration and protection for IP rights and spoke about setting up facilitation centers in several cities to provide free assistance, legal or otherwise, for patent filing by small organizations. There would also be an 80% reduction in the filing fees for the startups.
Just like registration can be done in a day via an app, the exit process will likewise be a lot smoother now. The winding down will take a mere 90 days vis a vis the countless months, and sometimes years. A suitable provision in the Bankruptcy and Insolvency Bill will soon be made.
Public procurements will now see much relaxed norms. The minimum turnover and minimum operating years required for a startup would be much less, along with income tax exemptions for the first three years, effective April 2016. Additionally, there would be exemptions for venture capital funds to start up a startup as well as incubators' investments, both above the fair market value.
Some other highlights of the plan are new policies to encourage women starting their own business, incubators based on sectors, a credit guarantee scheme, and reinvigorating the biotech sector with more bio-clusters.
To make the implementation of this ambitious plan a grand success, the central government funding will stand at 40% with the remaining 60% to be provided by the states and private sectors at a 40:20 ratio. It now remains to be seen just how well the plan is executed, in the face of all the promises made.