Action Plan for Startups Unveiled

Source: PIB
GS III: Economy

Overview

1. News in Brief
2. About Startup India Program
3. Action Plan’ for Startups

Why in News?

Under the Startup India initiative Action Plan for Startups was unveiled to create a vibrant startup ecosystem in the country.

About Startup India Program

• The Startup India initiative is a flagship program launched by the Government of India in January 2016.
• It aims to foster entrepreneurship and promote innovation in the country.
• The program also aims to create a conducive environment for startups to grow and flourish by providing various support measures,  incentives, and simplifying regulatory processes.

Key features of the Startup India initiative

• Startup Registration: Startups can register on the official Startup India portal to avail of various benefits and incentives provided by

  

  the government.

• Tax Benefits: The program offers income tax exemption for eligible startups for a period of three consecutive years, subject to certain conditions.
• Self-Certification Compliance: Startups can self-certify their compliance with labor and environment laws, reducing the regulatory burden and easing the business setup process.
• Simplified Patent Application: To encourage innovation, the government has introduced a fast-track and reduced-cost patent filing process for startups.
• Startup Fund of Funds (FFS): The government established a Fund of Funds with a corpus of INR 10,000 crore to provide funding support to startups through selected venture capital firms.
• Startup India Learning Program: An online learning platform to provide entrepreneurs with access to various resources, knowledge, and mentorship.
• Innovation Challenges: Government ministries and departments provide challenges to startups to solve real-world problems and promote innovation.

What are the benefits?

• Boost job creation, promote economic growth, and foster a culture of entrepreneurship and innovation in India. 
• The number of jobs created in 2020 is 1,59,803, in 2021 is 2,01,144 and in 2022 is 2,70,196.
• Significant progress in promoting startups has garnered widespread attention and support from various stakeholders in the Indian startup ecosystem. 

Action Plan’ for Startups

• In order to meet the objectives of the Startup India Initiative, the Government unveiled an Action Plan for Startups comprising schemes and incentives envisaged to create a vibrant startup ecosystem in the country.
• The Action Plan comprises 19 action items.
• This spanning areas such as Simplification and handholding, Funding support and incentives and Industry-academia partnership and incubation.

Programs for the Promotion of Startup

• Startup India Action Plan
  • An Action Plan for Startup India was unveiled on 16th January 2016. The Action Plan comprises 19 action items spanning across areas such as “Simplification and handholding”, “Funding support and incentives” and “Industry-academia partnership and incubation”. The Action Plan laid the foundation of Government support, schemes and incentives envisaged to create a vibrant startup ecosystem in the country.
• Fund of Funds for Startups (FFS) Scheme
  • The Government has established FFS with a corpus of Rs. 10,000 crore, to meet the funding needs of startups.
  • DPIIT is the monitoring agency and the Small Industries Development Bank of India (SIDBI) is the operating agency for FFS.
• Credit Guarantee Scheme for Startups (CGSS)
  • The Government has established the Credit Guarantee Scheme for Startups for providing credit guarantees to loans extended to DPIIT-recognized startups.
  • Loans are provided through Scheduled Commercial Banks, Non-Banking Financial Companies (NBFCs) and Venture Debt Funds (VDFs) under SEBI-registered Alternative Investment Funds.
  • CGSS is aimed at providing credit guarantees up to a specified limit against loans extended by Member Institutions (MIs) to finance eligible borrowers viz. DPIIT recognized startups.
• Faster Exit for Startups
  • The Government has notified Startups as fast-track firms enabling them to wind up operations within 90 days vis-a-vis 180 days for other companies.
• Startup India Hub
  • The government launched a Startup India Online Hub on 19th June 2017
  • Aims to discover, connect and engage with each other.
  • The Online Hub hosts Startups, Investors, Funds, Mentors, Academic Institutions, Incubators, Accelerators, Corporates, Government Bodies and more.
• Startup India Seed Fund Scheme (SISFS)
  • The Scheme aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization.
  • Rs. 945 crore has been sanctioned under the SISFS Scheme for a period of 4 years starting from 2021-22.
• States’ Startup Ranking Framework (SRF)
  • States’ Startup Ranking Framework is a unique initiative to harness the strength of competitive federalism and create a flourishing startup ecosystem in the country.
  • The major objectives of the ranking exercise are facilitating states to identify, learn and replace good practices, highlighting the policy intervention by states for promoting the startup ecosystem and fostering competitiveness among states.
• National Startup Awards (NSA)
  • National Startup Awards is an initiative to recognize and reward outstanding startups and ecosystem enablers that are building innovative products or solutions and scalable enterprises, with high potential for employment generation or wealth creation, demonstrating measurable social impact.
  • Handholding support is provided to all the finalists across various tracks viz. Investor Connect, Mentorship, Corporate Connect, Government Connect, International Market Access, Regulatory Support, Startup Champions on Doordarshan and Startup India Showcase, etc.
• National Mentorship Portal (MAARG)
  • In order to facilitate accessibility to mentorship for startups in every part of the country, the Mentorship, Advisory, Assistance, Resilience, and Growth (MAARG) program has been developed and launched under the Startup India Initiative.

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