To encourage the growing culture of startups in our economy, the Indian government launched an initiative called the Startup India Scheme in 2016. This scheme was inaugurated on the 16th of January of that year by our honorable Prime Minister, Mr. Narendra Modi.
The primary objectives behind the foundation of this scheme include minimizing the rate of unemployment and instilling a value of inventiveness in the educated youth of the country. This Startup India Scheme has been designed to incentivize the innovative spirit directly.
This, in turn, helps generate a plethora of unique products and services that often end up becoming critical and commercial darlings all across the globe.
Key Details of the Startup India Scheme
The plan laid out by Startup India Scheme involves:
1. Streamlining the process of applying for new startups
This scheme has been designed to streamline all the bureaucratic processes involved in getting a new startup officiated. In this scheme, the government has set up specialized cells to help young entrepreneurs deal with registration, patent acquisition, accounting, and all other processes involved in a startup company.
The government also put a policy in place in 2015, which directs that all new startups should be able to start their operations within 90 days of the registration.
2. Supporting the new startups financially
The government has also come up with several grants, loans, and tax concessions to help the newly established startup companies acquire enough capital to run their operations smoothly.
The government has set up a fund that amounts to a whopping ten thousand crore rupees for this purpose. In the scheme, this fund has been planned to be spread out over the course of four years. This means that the most up-and-coming startup companies are collectively liable to a grant worth 2500 crore rupees each year from the government.
Under the Startup India Scheme, newly established startup companies are also exempted from Income Tax for the first three years of their operation.
Key Benefits Offered by Startup India Scheme
1. Procuring a patent for a new product or service easily
The Startup India Scheme makes procuring a patent for a new product or service much easier. Earlier, to launch a new product or service into the market, you would have to pay a hefty sum to get your product patented. Patents are absolutely essential for a startup company, as it speaks to their legitimacy. This scheme provides startups with an 80 percent concession on the patent cost. On top of this, the facilitation of the patent is completely free.
2. Tax benefits and concessions to new startups
The Startup India Scheme also offers several tax benefits and concessions to new startup companies. Startups can apply for an exemption of all Income Taxes for a period of three years. In order to take advantage of this feature of the scheme, the entrepreneurs need to submit the details of their startup for approval by the Inter-Ministerial Board.
3. Easier and quicker registration process
This scheme makes the process of registration easier and quicker in every way. There are Startup India hubs to help guide you through the entire process and address any queries you may have.
4. Several special privileges for startups
The startups that have been registered under this Startup India Scheme enjoy several special privileges. For example, when it comes to government tenders, the startups enlisted under this scheme get first preference over all other companies. Startup India also organizes fests twice a year to help young entrepreneurs connect with large corporations from all over the world.
Eligibility Criteria for Startup India Scheme
- The startup should be a Private Limited company or a Partnership fund with limited liabilities.
- It should be certified by the Department of Industrial Policy and Promotion and an incubation.
- The proposed product or service should be new and inventive.
- The annual revenue generated should be less than 25 crore rupees.
- The company cannot be more than five years old at the time of application.
In the last couple of years, startups have become a very enticing and rewarding prospect for the youth of this country. It is an empowering profession where you get to decide your own business strategies and work with an exclusive and closely-knit group of individuals who are just as dedicated, motivated, and passionate about the business as you are.
The increasing popularity of these startups has worked wonders for the Indian economy. Startups get a lot of traction from skilled and unskilled young professionals in this country. Therefore, the industry of startups has helped generate a lot of jobs in this country that has perennially been plagued by unemployment due to its massive population of potential workers.
In many ways, startups involve an individual creating an employment opportunity for themselves. After some time, in case the startup business in question produces a successful and profitable revenue model, it can also create employment opportunities for numerous other potential workers.
Apart from generating employment for the millions of young and unemployed professionals across our country, these startups are also the gold standard for innovation. Most successful startups find their origin in a young unemployed graduate coming up with a unique and innovative product.
In most cases, this product could be something of indispensable value for our day-to-day lives that the Indian market might never have seen before. This occurs because for a startup company to be successful, its products and services need to have some intrinsic value that sets them apart from all the other similar products.
A startup company cannot compete with a prestigious and trusted brand in the market. The Startup India Scheme helps support this structure. This, in turn, boosts our economy.