The Indian government seems to have found a way to help people in this season of layoffs in the country. According to a report in the ET, the government is considering introducing a new rule for startups to qualify for the Startup India programme so that it can meet its target of providing employment to one crore people before its term ends.
It is no secret that the employment scene in the country is not very rosy right now. According to reports, seven of the biggest IT firms in India are planning to layoff at least 56,000 engineers this year in its largest retrenchment drive ever. Coming to startups, earlier this year, Snapdeal was reportedly planning to trim its workforce and layoff about 600 people in a bid to keep the boat in the water and moving.
However, the Indian government has decided to change this sorry state of affairs into a great opportunity for itself. In order to meet its target of providing once crore jobs to the citizens by 2019 (the year it term ends), the government has found a way to pass on its responsibility to the burgeoning startup ecosystem of the country.
According to a report in the ET, the government is considering introducing a new rule for Indian startups to become eligible for the Startup India programme and avail its benefits. In addition to the previous rules, the startups will soon have to declare how many jobs they would be creating for Indian citizens through their businesses.
The report quotes a senior government official saying, “we will soon notify the new definition for startups, which goes beyond innovation.”
Apart from innovation, the government is now looking for startups that can help it achieve its job creation goal.
Under the new definition, in order to qualify as a startup in the country, an entity would have to declare its job creation target and meet certain financial standards besides having a certain level of innovation in its product or service.
According to Nasscom, startups are expected to create 250,000 jobs in India by the year 2020, a figure which is much above the 80,000 figure right now. Once the new startup definition comes into play, the 250,000 jobs figure could be expected to increase exponentially.
Since January, 2016, when the Startup India movement was launched by the Indian Prime Minister Narendra Modi, the DIPP has successfully recognised a whopping 798 applications as startups but not all have been given the tax benefit. Companies which have been incorporated after March 31, 2016 are eligible of availing a three-year tax holiday in the first seven years of their existence under the Startup India initiative.
It is important to note, that job creation was not a mandatory requirement when Startup India initiative was launched last year. But, the Indian government seems to have seen a ripe opportunity for itself in the current layoff cloud hovering over the Indian economy and has worked the situation in favour of all.