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Startup India

Startup India

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Startup India

In a bid to encourage a spirit of innovation and entrepreneurship in the country, the Government of India under the leadership of Prime Minister Narendra Modi, launched a campaign in 2015. This highly successful initiative has seen India become a startup hub, with 15,667 startups being recognised under the Startup India programme.

What is a Startup?

The government defines a startup as an entity headquartered in India within seven years, with annual turnover not exceeding Rs 25 crore in any preceding financial year. The entity must be working towards innovating something new or towards improving the existing technology. Furthermore, the entity should be a new business and not formed as a result of splitting up or reconstruction of a business already in existence.


Startup India Action Plan

The government laid out a definite Startup India Action Plan. The highlights of this Action Plan are as follows:


  • Simplification and Handholding
  • Funding Support and Incentives
  • Industry-Academia Partnership and Incubation


With these three pillars, the other key points of the initiative include:

  • A funding pool with Rs 10,000 crore
  • A reduction in the registration fees of patents for new products and technologies
  • A 90-day exit window for entities going bankrupt
  • No Capital Gain Tax for the first three years of operation
  • No tax for the first three years of operation
  • An innovation hub to be created
  • A toll free helpline and quick email query resolution for startups


Registering Process

The government has made it convenient to register a startup with the following process:


i. Incorporate the business

The entity needs to be incorporated as a Private Limited Company/Partnership Firm/Limited Liability Partnership.


ii. Register with Startup India Portal

The entity must then be registered as a startup. The details are clearly mentioned on the Startup India website.


iii. Upload Documents

After registering on the Startup India Portal, the following documents will need to be uploaded:

  • A letter of recommendation
  • Registration certificate
  • Description of the business entity


iv. Decide about availing tax benefits or not

Startups need to be certified by the Inter-Ministerial Board to avail exemption from paying income tax for three years.


v. Self-certification compliance

The entity must self-certify if it meets all the conditions necessary to be a startup as laid down by the government in the Startup Action Plan.


vi. Recognition Number

Once all these steps are fulfilled and the documents are examined, a recognition number for the startup will be issued. 


Indian Startup Ecosystem

India has the second largest ecosystem in the world. The following figure shows the leading startup destinations in India:


Startup India has created an ecosystem for entrepreneurship, as a result of which, a lot of funding from foreign investors such as SoftBank, Google and Oracle is coming into India. This initiative is helping generate employment in the country and enable India to become a country of entrepreneurs. 

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