DIPP Secretary Ramesh Abhishek has announced that the Union Cabinet is expected to approve the $300 Mn (INR 2,000 Cr.) fund for startups by the end of July 2017. This announcement was made at the Startup India Hub launch yesterday.
The Finance Ministry has already approved the proposal for the Credit Guarantee Fund last week.
“One startup will get a maximum of $775K (INR 5 Cr). We are hoping to get the cabinet approval on this by end of July to operationalise this fund. About 7,500 startups will benefit from this. Also, it will generate an additional funding of $2.32 Bn (INR 15,000 Cr),” he added.
The Department of Industrial Policy and Promotion (DIPP) had proposed to set up a Credit Guarantee Fund in October 2016. The fund aims to support the ventures’ and entrepreneurs’ risk-taking abilities. With this fund in place, the startups would receive financial support from banks and financial institutions with a collateral-free guarantee.
The DIPP has been playing a key role in executing the Modi Government’s ‘Startup India, Stand Up India’ mission.
Out of all the applications received, 1,333 have been recognised as startups by the DIPP. 39 Startups have been approved for availing tax benefits by the IMB, as of June 2017.
Further, a Panel of 423 facilitators for patent and design applications and 596 facilitators for Trademarks applications has been constituted. It will provide startups assistance in filing Intellectual Property (IP) applications. Also, it will help to fast track the process of patent filing and acquisition.
Startup Benefits: Other Key Initiatives Taken By DIPP
- Under the ‘fund of funds’ of INR 10,000 Cr, INR 623.5 Cr have been committed to 17 AIFs. 65 Startups have been funded.
- It recently revised the Startup definition thereby increasing the age limit from 5 to 7 years. For biotech startups, the age limit has been increased to 10 years.
- DIPP launched the Startup India Virtual Hub where all the stakeholders of the startup ecosystem can collaborate and synergise their efforts.
- Startups incorporated after March 31, 2016 could avail a tax holiday for three out of seven years, from the date of incorporation. Also, The tax rate for SMEs with an annual turnover up to $7.6 Mn was reduced to 25%.
- Job creation capability and financial standards of the startup are the new measures to avail benefits under the Startup India plan. 457 Tinkering Labs have been approved and 350 have received a grant of INR 12 lakh each. Pre-incubation training through 25+ mentorship sessions has been conducted.
NITI Aayog also announced yesterday the setting up of 1,000 tinkering labs in various schools this year. Also, earlier DIPP had asked the Finance Ministry to release an additional $247.7 Mn (INR 1,600 Cr) under the Fund of Funds for startups (FFS) in FY 17-18. With a slew of measures being undertaken in earnest by the Government, it can be concluded that the government is keen to drive digital development amongst the Indian economy stakeholders – entrepreneurs, startups, consumers and investors.