As the DIPP’s state startup ecosystem rankings come close, the states are also in a rush to draft startup-related policies and implement them. While the major states have already introduced their startup policies, the effort is now towards fine-tuning the policies.
At the central level, while PM Modi interacted with MUDRA and Startup India beneficiaries on the NaMo App, the income tax department, in a notification, said that under the conditions laid down by the DIPP, angel investors too will be eligible for the tax exemption.
Interacting with entrepreneurs through the NaMo App, Modi said, “His government has tried to bring the startup innovation culture down to Tier II and Tier III cities and even to rural areas, which so far was limited to Tier I cities only.”
“India is a young country where 65% of the population is aged less than 35 years, and we are enabling them to think of innovative solutions. Further, we have tried to localise the startup innovation culture and you will be surprised to know that till now 44% of the startups are found in Tier II and Tier III cities, today. These startups have been founded across the 419 districts of India. Moreover, almost 45% of the startups are founded by women entrepreneurs.”
While interacting with the beneficiaries of the MUDRA scheme on June 5, Modi said that the Mudra Yojana has become a job multiplier. “the initiative has helped in relieving the entrepreneurs from the vicious cycle of moneylenders and middlemen. It has opened up new opportunities for the youth, women, and those who wanted to start or expand their businesses,” said Modi.
Let’s take a look at last month’s policy updates.
Angel Investors Get Tax Exemption Under New DIPP Policy
After a long battle fought by the likes of Mohandas Pai and other angel investors, angel investors have now been exempted by the CBDT, income tax department, subject to the fulfilment of conditions laid down by the DIPP.
In a notification issued on May 24, the income tax department of India stated, “The Central Government hereby notifies that the provisions of clause (viib) of sub-section (2) of section 56 of the said Act shall not apply to consideration received by a company for issue of shares that exceeds the face value of such shares, if the consideration has been received for issue of shares from an investor in accordance with the approval granted by the Inter-Ministerial Board of Certification.”
As stated in the notification, the decision has come into force retrospectively from April 11, 2018.
Delhi Govt To Draft Policy To Promote Delhi Startups
After more than a dozen states have already drafted their state startup policies, the Delhi government will now reportedly draft a startup policy for the Delhi state. As reported by Inc42, the first draft has already been presented by the Delhi’s Industries Department.
The startup policy meeting saw participation from trade associations such as NASSCOM, FICCI, and CII.
The principal secretary, industries, Mohanjeet Singh, said, “Delhi is currently home to a number of flourishing startups and the vision is to create a world-class startup ecosystem in the national capital through strategic investment and policy interventions as well as to leverage the robust innovation climate in the national capital.”
The Delhi government had earlier decided to establish an Incubation Centre at the Delhi Emporium Building with a goal to provide infrastructural support as well as a conducive environment for the startup ecosystem to grow.
Maharashtra Government Unveils ‘Sandbox’ To Aid Startups
With Mumbai being the fintech capital of India, the Maharashtra government recently announced a ‘sandbox’ to aid startups in the space keep up with fintech developments in the state, reported CNBC.
The decision was taken following the recommendations of the RBI this February. An RBI panel had then recommended the introduction of a regulatory ‘sandbox’ to foster financial technology innovation.
S V R Srinivas, principal secretary of IT department, said, “In this sandbox, all the startups will be welcome. They can register, they can open their APIs and banks can consume.”
Maharashtra is the first state to implement a dedicated fintech policy. According to reports, the state government is also planning to have a dedicated fintech officer in the department of information technology.
Maharashtra Govt To Organise Startup Week
In other news from Maharashtra, the government, with an aim to strengthen the state’s entrepreneurial spirit, has announced the launch of Startup Week 2018, to be held between June 25 and 29.
Announced by the minister for skill development Shri Sambhaji Patil Nilangekar at Sahyadri Guest House, the Maharashtra Startup Week will provide startups with a platform to showcase their innovative products and services to the state government. This will also provide startups with an opportunity to work with the state government.
Applications have been invited in the fields of education, skilling, healthcare, agriculture, clean energy, environment, water, and wastewater management, smart infrastructure, mobility, governance, financial inclusion, and cybersecurity.
As part of the startup policy, the top 100 ventures will be selected to present their solutions to a panel comprising representatives from the government, industry, academia, and investors.
During the week-long event, 10 startups from each sector will make their pitch to the panel and the best three among them (a total of 24) will receive work orders of up to INR 15 lakh from the Maharashtra State Innovation Society to pilot their solutions within the state.
Telangana To Launch E-Mobility Policy
While the central government has deferred the FAME II scheme for an indefinite period, the Telangana state is set to introduce its own e-mobility policy by the end of this month or by next month. As per reports, the draft has already been prepared and various stakeholders have given their inputs on the issue.
Commenting on the development, Telangana Industries Principal Secretary Jayesh Ranjan said, “All possible interventions will be included in the policy. Since the field is dynamic, we have not committed to any numbers like how much incentive will be given to how many members for what duration. We will be flexible with the interventions. There will be a special decision-making body that will guide the implementation of the policy.”
KSUM Introduces Innovation Grant Scheme
The Kerala Startup Mission (KSUM) is inviting applications from startups for the KSUM Innovation Grant Scheme. Under the scheme, the Kerala government will provide financial assistance to startups in order to help them convert their innovative ideas into full-fledged ventures.
Startups registered in Kerala can apply for the Scale-up Fest provided they have had a revenue or investment inflow of at least INR 12 Lakh in the last six months. Startups that are in the process of raising investments can also apply for the Scale-up Fest. Disbursal of grants will be subject to verification of revenue/investments received by them.
KSUM has also announced a set of attractive fellowships, offering opportunities to highly competent candidates to partner with its programmes.
Under the programme, the Kerala government will offer a one-year fellowship to experienced professionals and motivated youngsters interested in contributing to the government’s mission of making Kerala a vibrant hub of tech startups and a talent pool skilled in emerging technologies.
The selected fellows will also be provided with an opportunity to closely work with the Kerala Startup Mission, other government bodies, industry leaders and associations, startups, and other stakeholders to achieve the goals of the fellowship. Each fellow will be assigned a mentor and/or a host institute who will be able to provide guidance and necessary connections said the press statement.
Last month, the Netherlands in collaboration with Startup India launched a platform called #StartupLink to address the concerns of startups looking to explore another turf.
Even as startup success and funding have seen a huge spike in the last few years, a number of new challenges such as GST filing, filing for tax exemption, and other policy-related matters are consuming a significant amount of startups’ talent and time, which, in turn, is affecting their efficiency. The government needs to finetune a number of such issues.