Modi’s much-hyped initiative Startup India is moving at a pace which is slower than a snail. While people outside the government have always been concerned about the programme’s pace, the central government seems to be finally waking up to the reality.
Talking to The Hindu, a senior government official divulged that till March 2017, only around 10 Indian startups have been able to pass the eligibility for tax benefits. This takes the total number of startups actually benefitting from the programme to 39 since its launch 18 months ago in January, 2016, which is quite low according to what the government had anticipated given the large scale launch and media-hype around the programme.
In his budget address this year, Finance minister Arun Jaitley had announced alteration in the government’s policy on tax concessions for startups and said that only the firms incorporated on or after April 1, 2016 could now avail a three-year tax holiday in the first seven years of their existence. He also specified that startups which are recognised by Government of India, DIPP can now avail IPR related benefits directly without requirement of any additional certification from the Inter-Ministerial Board (IMB).
According to experts, only a few startups have been able to pass the tax benefit eligibility criteria because not many corporate entities have been incorporated on or after that stringing cut-off date that the government has decided upon.
According to The Hindu’s government official source, who didn’t wish to be named, the government has not only recognised that there a problem with the programme but has in fact started taking small steps in order to bring the initiative back on track. It had recently initiated the broadening the scope of definition of startups in the country in order to include ‘scalability of business model with potential of employment generation or wealth creation’ (Read Here). It even issued a relaxation in the norms by abolishing the requirement of ‘letter of recommendation’ from an incubator/industry association for recognising a company as a startup.
The government has also decided to give all the rejected applications another chance so as to give everyone a fair chance based on the changes it is currently undertaking for the betterment of the programme. The Centre believes that with the new changes coming into affect, it will be able to make this 39 startups number cross the 100 mark by September this year.
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