Easing Startup Funding, Compliances On DPIIT’s 100-Day Agenda

SUMMARY

Besides, the department is also contemplating reforms around ease of doing business right from commencement to closure

The government may also introduce a lax compliance burden for startups under the second edition of the Jan Vishwas (Amendment of Provisions) Bill

This also comes at a time when the DPIIT has urged various corporates and unicorns to set up manufacturing-focused incubators

In an effort to boost investment activity and further drive manufacturing growth across the Indian startup ecosystem, the Department for Promotion of Industry and Internal Trade (DPIIT) will now likely sharpen its focus on easing early stage funding for startups and bringing down the compliance burden and overall logistics cost as part of its 100-day action plan.

This also comes at a time when the DPIIT has urged various corporates and unicorns to set up manufacturing-focused incubators.

“Developing a strong manufacturing base is an essential activity for any nation as it promotes innovation and competitiveness, boosts employment, livelihoods and standards of living and strengthens self-reliance and economic stability,” DPIIT has said in a statement.

According to ET’s recent report, as part of the 100-day agenda, the Steering Committee for Advancing Local Value-add and Exports, or SCALE Committee, under the DPIIT, has been asked to identify the other sectors which may need manufacturing incentives.

Besides, the department is also contemplating reforms around ease of doing business right from commencement to closure, the report said, adding that the Centre is also planning public and private partnerships for startups.

The government may also introduce a lax compliance burden for startups under the second edition of the Jan Vishwas (Amendment of Provisions) Bill. Under the Bill, passed last year, more than 40,000 compliances were eliminated or simplified.

The changes or schemes on the table will either form a part of the government’s 100-day plan or the department’s five-year plan, the report added.

Not to mention, the government is also reportedly planning to launch a deeptech startup policy enabling long-term funds for the startups in the sector.

This development comes close on the heels of the government focusing on bolstering the startup ecosystem in the country on the back of several policies, schemes and other incentives.

These schemes include Atal Innovation Mission, Multiple Grant Scheme, Startup India Initiatives and Startup India Seed Fund Scheme among others.

To be sure, India is home to 110+ unicorns, 5,000+ angel investors, 1,400+ venture capitals and 1,100+ private equity firms.

However, the startup landscape witnessed a paradigm shift on the funding front, registering a seven-year decline in 2023 reaching a mark of $10 Bn. This was a 60% dip from 2022 and a sharp 76% fall from the peak in 2021.