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Startup India: Harnessing youth
PRIME Minister Narendra Modi has repeatedly exhorted the youth of India to be job creators and not just job seekers. That is the fundamental principle behind the Startup India programme.
As a global leader in information technology, India has one of the largest eco-systems for startups in the world. Ranked third in terms of size, India has over 4,750 technology startups, with about 1,400 new start-ups being founded in 2016. The number is expected to reach over 10,000 by 2020. India also has its own share of unicorns. Several Indian startups are valued at over US$ 1 billion. The market is expanding rapidly. E-commerce, for example, has grown from under US$20 billion to over US$30 billion in a single year. The push towards a cashless society and digital payments has generated a number of new startups.
Startups are seizing opportunities created by technology in transforming the Indian market-place and, at the same time, developing affordable solutions to address many human and social challenges as well as rural needs. India's large size and enormous pool of talent have made India an exciting place for startups in India and abroad.
Startups thrive on an autonomous, if not anarchic, system of markets, mentors, financiers and risk takers, plus a bit of luck. In India, the government is supplementing that effort with wide-ranging initiatives of its own, leading with Startup India.
- The government has started US$1.5 billion initial corpus for the Fund of Funds for Startups, established in June 2016. More than US$17 billion has been invested in startups since 2014. About 800 startups have been recognised for being eligible for various government benefits and support.
- Startups benefit from a generous tax regime, including a three-year tax holiday within seven years of their existence; reduced tax rate of 25 per cent for a turnover of up to US$8 million; exemptions on capital gains for investment in equity share of eligible startups; carry forward of losses for seven years to set off against future profits, even if there is a dilution in the equity holding of initial promoters.
- Scheme for startups' intellectual property protection up to 2020.
- Over 1,000 facilitators have been appointed for trade markets, patents and designs.
- 80 per cent fees rebate in patenting
- 50 per cent rebate in trade market fees
- An agreement with the World Intellectual Property Organization has been signed to set up a network of technology and innovation support centres in India.
- 10 new and six existing incubation centres approved for government funds.
- 15 startups and 15 technology business incubators being set up. Three bio clusters being funded by government.
- Seven research parks being set up at Indian Institutes of Technology.
- 457 schools have been selected for tinkering labs.
- 15 states have launched their own startup policies.
- Virtual startup hub has been set up in the Department of Industrial Policy and Promotion (DIPP) (email: email@example.com) on April 1, 2016. It has handled more than 45,000 queries and helped more than 350 startups from India and abroad.
- Scheme for winding up operations has been speeded up.
To speak of startups is to reflexively think of technology ventures in cyber space in large cities.
However, for Prime Minister Modi, the startup initiative is broader. It envisages new ventures across small towns and 600,000 Indian villages, which together would generate broad-based employment opportunities in the country. For this, there are a number of initiatives that support innovation and financing in a number of sectors, including agriculture, animal husbandry, social impact, health care, life sciences, micro enterprises, cottage and handicraft industry, food processing, clean energy and fintech. These include :
- NewGen Innovation and Entrepreneurship Development Centre (NewGen IEDC)
- The Venture Capital Assistance Scheme of Small Farmers' Agri-Business Consortium (SFAC)
- Credit Guarantee Fund Trust for Micro and Small Enterprises
- Aspire - Scheme for promotion of innovation, entrepreneurship, and agro-industry
- Dairy Entrepreneurship Development Scheme
- Stand Up India
- Biotechnology Industry Partnership Programme (BIPP)
The startup sector, especially technology-driven enterprises, fintech and internet of things, could become new drivers of economic partnership between India and Singapore. India offers skills and talent and global platform in a supporting environment. Singapore, too, has a dynamic and innovative startup sector and financing opportunities, including major sources. We are building a startup bridge between India and Singapore to seamlessly connect our innovators, entrepreneurs and financers.
- The writer is High Commissioner of India to the Republic of Singapore.