Thursday, November 26, 2020

Startup India and the businessmen [How the scheme helps entrepreneurs]

The Takeaway:

The Modi government unveiled the Startup India initiative to promote entrepreneurship in India earlier this year. Before we judge the program, there is stuff we need to learn.

What is Startup India?

Startup India is an action plan initiated by the Modi Government to encourage and cultivate entrepreneurship throughout the country. The program is primarily focused on an action plan to promote bank investment for startups to improve entrepreneurship. In his speech from Red Fort on 15 August 2015 and later on 16 January 2016, the Startup India campaign was first declared by Prime minister Modi.

 

What is self-registration?

The goal behind the self-registration of startups with a smartphone application is to reduce the regulatory expense of startups. Traditional registration requires different formalities and time-consuming labor and environmental legislation. New and small companies like Shadowfax are sometimes ignorant of the application procedure and are frustrated due to lack of time. The Startup India made self-registration in a smoother and quicker smartphone app and replaced checks carried out in the conventional method.

 

What is Startup India’s role in promoting startups?

The need for a genuine buddy, guide, and mentor to keep the hands of the modern Indians has been taken care of by the launch of the Startup India Hub. The government has established Startup India Hub to boost the market ease in India, which offers a unique point of touch for company founders and assists entrepreneurs like Gaurav Taneja with the sharing of experience and access to financial assistance at a grand level with other innovators. This will be a primary stakeholder and will operate at a nexus and partner with central and state governments, international and Indian VCs, angel networks, banks, incubators, and support startups through their entire life cycle.

 

How ‘fund of funds’ will provide funding support?

Through the ‘fund of funds,’ the government must set up a fund with an initial corpus of INR 2500 crore every year over the next four years. It would be in the umbrella of funds, operated by a board of qualified firms, selected from corporate organizations, and established entrepreneurs, not invested personally in startups. LIC is a current business co-investor. The government’s cumulative budget for the 4-year cycle is INR 10,000 crore.

 

What is Tax Exemption to Startups?

The earnings of Startup initiatives like Craftsvilla are excluded from the income-tax duration of 3 years, stimulating the growth of Startups in India and providing them with a global forum. The exemption was the center of attraction for Startup India since it seeks to promote market development and fulfill the working capital criteria within the first three years of operation.

 

Easy exit in startups

For a business failure, capital and resources need to be re-allotted in more productive ways. Consequently, a short and easy mechanism has been placed in motion for Startups to complete operations. It would allow businesspeople to play with imaginative and revolutionary ideas without the fear of confronting a long-lasting and challenging exit phase that always stuck their money. 

Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Aakriti Suri
Aakriti Suri
Aakriti Suri is a writer by passion. Born in Delhi, she was always an avid reader of all things readable which motivated her to become an avid writer. Besides writing she’s pursuing her MBA in Marketing and Finance.

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