Prime Minister Narendra Modi’s ambitious Start-up India initiative, which got voice and shape on January 16, sounds like a mega boon for aspiring entrepreneurs, willing to startup and stand up in India.
The day-long event rolled out a slew of policy initiatives and schemes such as a three-year tax holiday, a magnanimous Rs 10,000 crore start-up fund, easy patent procurement, mobile app-based incorporation, easy entry and exit policies, setting of incubator centres, among other sops that together would bring in needed flexibility and ease of operation for the promising ideas.
“There have been specific announcements made, which will incentivise domestic investors to invest in startups as an asset class — which hasn’t happened till now. Exemptions in Capital Gains tax and tax on profit will ensure that during the early days, a startup will focus on innovation more and will be able to invest from the revenue generated from the business. Also, the fact that businesses, which fail to take off, can close in 90 days is a big relief for the entrepreneurs and even the investors whose money gets stuck in such a scenario,” Anil Joshi, Managing Partner, Unicorn India Ventures, told Indiaretailing.
Many hopeful eyes now look up to the concerned stakeholders whose sincere efforts alone can make the dream turn into reality.
“The direction of the plan shows that the government understands the challenges of a startup. This is shown in the fact that they have addressed taxation, recognised the need for mentorship through the Startup India hub and created mechanisms for providing funding,” Rohan Bhargava, Co-founder, CashKaro.com, said.
Furthermore, a closer look at the much touted campaign reveals the genuineness of the government in insuring that they are willing to go beyond the foundation level and to facilitate until a concept can be operationalised.
The investors’ community endorses the sentiment. “A big USP of the policy is that in order to foster more startups in India, the government has announced initiatives not only to support entrepreneurs but the entire ecosystem, which consists of other stakeholders like investors, legal support for startups. I believe there is no stopping the startup boom in the country,” Joshi added.
While the proposed initiatives have spread euphoria amongst the India’s startups community, some stakeholders said they would like to wait for the fine implementation and execution of the proposed measures before they start a party.
“From the intent to the actual execution is something that will actually witness litmus test. Success of these policies depends largely on the speed and ability to implement the action plan. Hopefully, these initiatives will be implemented soon and not get stuck in bureaucratic procedures or approval in parliament etc,” added Bhargava.
Also, while it was definitely a significant move by the Government, it still needs to be seen whether these measures will stop Indian startups shifting base from India to countries like Singapore, the US and the UK, where regulatory environments are much easier.
A large number of startups, including Grofers, Flipkart, InMobi and MobiKon, have moved to these countries because of better regulatory environment in these countries. These companies continue to access the Indian market and keep their operations in India (cost reasons), but have moved their headquarters to Singapore, becoming Singaporean entities.