Dated: 23 November, 2018

With the intention to build a strong eco-system for nurturing innovation and Startups in
the country, the Hon’ble Prime Minister launched Startup India Action Plan on January
16, 2016 in New Delhi. The Government through this initiative aims to empower
Startups to grow through innovation and design and to accelerate spreading of the
Startup movement. Given below is a glimpse of the progress Startup India has made:
AMENDED DEFINITION OF STARTUP AND SIMPLIFIED RECOGNITION PROCESS
Acknowledging the long gestation period for Startups, the definition has been amended
14,036 Startup applications
where an entity shall be considered as a Startup for up to 7 years (from earlier 5 years) and a
have been recognised as Biotechnology Startup for up to 10 years from the date of its incorporation/ registration. Also,
Startups by DIPP. scope of definition has been broadened to include scalable business model with high potential
of employment generation or wealth creation. Additionally, no letter of recommendation from
an incubator/industry association shall be required for either recognition or tax benefits.
RECOGNITION
Out of the applications received, 14,036 have been recognised as Startups by DIPP. 91
Startups have been approved for availing tax benefits by IMB, as of 3rd week of Nov, 2018.
COMPLIANCE REGIME BASED ON SELF-CERTIFICATION
Compliance norms have been eased in order to reduce the regulatory burden on
Startups thereby allowing them to focus on their core business.
a) Startups falling under the list of 36 “white” category industries will not require
Environment clearance under 3 Environment related Acts viz. The Water
(Prevention & Control of Pollution) Act, 1974; the Water (Prevention & Control of
Pollution) Cess (Amendment) Act, 2003 and the Air (Prevention & Control of
Pollution) Act, 1981. Click here to get the list of “white” category industries
b) Ministry of Skill Development and Entrepreneurship (MSDE) has issued advisory to
states to allow Startups to self-certify compliance for a period of 1 year with the
Apprenticeship Rules, 1992 of Apprenticeship Act 1961
c) As per the advisory issued by Ministry of Labour & Employment (MoLE) on
Startup India hub has 12.01.2016, Startups may self-certify compliance under 6 Labour Laws. MoLE has
now increased the tenure of compliance of self-certification under 6 Labour laws
been able to handle
from 3 to 5 years. 27 states viz. Andhra Pradesh, Assam, Chhattisgarh, Chandigarh,
more than 1,16,000 Daman & Diu, Delhi, Gujarat, Himachal Pradesh, Mizoram, Odisha, Punjab, Tripura,
queries and facilitate West Bengal, Uttar Pradesh, Haryana, Jharkhand, Madhya Pradesh, Maharashtra,
Tamil Nadu, Telangana, Uttarakhand, Rajasthan, Karnataka, Bihar, Andaman &
more than 660 Startups Nicobar, Arunachal Pradesh and Meghalaya have confirmed compliance.
by providing advisory
STARTUP INDIA HUB
on business plans, Startup India hub was operationalised on 1st April, 2016 to resolve queries and provide
pitching support, etc. handholding support to Startups. The hub has handled more than 1,14,000 queries
from Startups through telephone, email and Twitter. To seek clarifications pertaining
to Certificate of Recognition as a “Startup”, Certificate of Eligibility to avail tax benefits,
seeking information on incubators or funding, one can get in touch with the Hub on Toll-
Free number: 1800115565 or Email ID: [email protected]. The hub has mentored
more than 660 Startups for incubation, funding support, on business plans, pitching
support, etc. Startup India Online Hub was launched to serve as an online platform
where all the stakeholders of the Startup ecosystem can collaborate and synergize their
efforts. More than 2.7 lakh users have registered. To register, click here.
 PATENT BENEFITS
A panel of 427 facilitators for patent and design applications and 670 facilitators for
Trademarks applications has been constituted for assistance in filing Intellectual
Property (IP) applications and to fast track the process of patent filing and acquisition.
DIPP bears the facilitation cost on behalf of Startups and also provides rebate in the
statutory fee for filing application.
Startups can now avail Under the scheme for Startups Intellectual Property Protection, Patent applicants have
income tax exemption for received the benefit of up to 80% rebate in patent fees and free legal assistance.
Startups have also availed benefit of fees rebate in expedited examination filing fees
3 years in a block of 7 (Form 18(A)). Trademark Rules, 2017 has been recently amended to provide 50%
years, if incorporated rebate in Trademarks filing fee to Startups. Overall, more than 2,000 Startup cases have
after 1st April 2016. been facilitated under the scheme.
RELAXED NORMS OF PROCUREMENT
To create a conducive ecosystem for growth of Startups and provide an equal platform
to Startups vis-à-vis the experienced entrepreneurs/companies in public procurement,
relaxed norms of public procurement for micro and small enterprises have been
provisioned in the Procurement Policy of Ministry of Micro, Small and Medium
Enterprises (MSME). Department of Expenditure has also notified that all Central
Ministries / Departments shall relax condition of prior experience and prior turnover
in public procurement to all Startups (whether MSEs or otherwise) subject to meeting
of quality and technical specifications. Department of Public Enterprises has expanded
the relaxation to Central Public Sector Undertakings (CPSUs). GFR 2017 has
incorporated rules which provide for relaxation of conditions of prior turnover, prior
A 'fund of funds' of INR experience and exemption from submission of Earnest Money Deposit (EMD) for
10,000 Cr is being managed Startups. To get details, click here.
by SIDBI. INR 1611 Cr have TAX BENEFITS
been committed to 32  Tax Exemption
The Finance Act, 2016 had made provision for Startups to get income tax
AIFs. 170 Startups have exemption for 3 years in a block of 5 years, if they are incorporated between 1st
been funded. April 2016 and 31st March 2019. In the Union Budget 2017-18, the Government
has increased this period of profit-linked deductions available to the eligible
Startups to 7 years. To avail these benefits one must get a Certificate of Eligibility
from the Inter-Ministerial Board of DIPP. For details, click here.
 Tax Exemption on Capital Gains
Section 54 EE has been introduced under the Finance Act, 2016 which provides
for exemption of capital gain up to INR 50 lakhs arising out of transfer of long
term capital asset invested in a fund notified by Central Government.
Also, Section 54 GB of Income-Tax Act, 1961 has been amended to provide
exemption from tax on capital gains arising out of sale of residential house or a
residential plot of land if the amount of net consideration is invested in equity
A 4 week free Learning & shares of eligible Startup for utilizing the same for purchase of specified asset.
Development programme  Removal of Angel Tax
Tax exemption on investments above Fair Market Value (or angel tax) has been
covering 6 modules has
introduced for Startups. Revised norms for claiming angel tax exemption has been
been launched. More than provided through a notification dated 11th April 2018. For details, click here.
2,27,000 applicants have FUND OF FUNDS FOR STARTUPS (FFS)
A 'fund of funds' of INR 10,000 crores to support innovation driven Startups has been
signed up for the course established which is being managed by SIDBI. The corpus shall be released over two
and 10,000+ applicants Finance Commission cycles, by 2025. FFS invests in SEBI registered Alternative
have completed 100% of Investment Funds (AIFs) which, in turn, will invest in Startups. INR 600 crore has been
released to SIDBI. Further, a letter of comfort for INR 1600 crore has been provided to SIDBI. Total
the course successfully. commitments stand at INR 1611 crore to 32 AIFs. 170 Startups have received funding
from various AIFs. For details, click here.
LEARNING & DEVELOPMENT MODULE
Startup India has launched an interactive online learning and development module to
educate Startups and aspiring entrepreneurs. Over more than 2,30,000 applicants
have signed up for the course, out of which more than 10,000 applicants have
completed 100% of the course successfully. Click here to access the module.
 ATAL INNOVATION MISSION
The guidelines for harnessing private sector expertise to set up incubators, organizing
annual grand challenge for innovative solutions to problems faced by industry and those
posed by Ministries as well as establishment of tinkering labs have been formulated and
published on NITI Aayog’s and Startup India’s website.

ESTABLISHMENT OF TINKERING LABS

5441 Tinkering Labs have As per the Startup India Action Plan, more than 5000 Tinkering Labs are being established.
NITI Aayog has selected 5441 schools for establishing Tinkering Labs. Out of the selected,
been approved and 2071 2071 Tinkering Labs have received a Grant-in-Aid of INR 12 Lakh each.
have received grant of INR
12 lakh each. ESTABLISHMENT OF INCUBATORS
New incubation centres are being established under Atal Innovation Mission across India
through financial support. The incubators would provide necessary infrastructure and
assistance to Startups in their early stages of growth.
NITI Aayog has received applications for setting up Atal Incubation Centres (AICs) in public
and private sector as well as scaling up of Established Incubation Centres (EICs). In respect
to establishment of new incubators in institutions and as well as in the private sector,
NITI Aayog has approved 22 institutes to establish new incubators with a total grant of
INR 54 Crores.
A grant-in-aid of INR 10 Crore would be provided to each Established Incubator Centre (EIC)
for a maximum of 5 years to cover the capital and operational costs in running a centre. 8
established incubators have received a total scale-up grant of INR 34 Crore.

RESEARCH PARKS
8 EICs have been approved
The objective of setting up Research Parks is to propel successful innovation through
for scale-up grant of INR 10 incubation and joint Research and Development (R&D) efforts between academia and
Cr. 22 institutes have been industry. 8 Research Parks are being setup under Startup India initiative. Research Park at
IIT Kharagpur is under construction and INR 100 crore has been released. The Research
approved for establishing
Park at IIT Gandhinagar is being set up by DST which has sanctioned INR 90 crore and
AICs. disbursed an initial instalment of INR 40 crore. The remaining 5 are being set up by
Ministry of Human Resource Development (MHRD) at IIT Guwahati, IIT Hyderabad, IIT
Kanpur, IIT Delhi and IISC Bangalore with a budget of INR 375 crore. In addition, another
Research Park at IIT Bombay is under construction and INR 34 crore has been
released.

PROMOTING STARTUPS IN THE BIOTECHNOLOGY SECTOR

Under Biotech seed fund, INR 11 crore has been sanctioned and INR 7 crore disbursed to
11 Bio-incubators. A fund of funds with a corpus of INR 150 Cr has been approved. A total
of 31 bio-incubators have been supported (sanction amount of INR 235 Cr) by DBT. The
The Research Park at IIT impact has been multi-fold as over 710 Startups have received benefits from these bio-
Gandhinagar is being set incubators under various programmes like Biotechnology Ignition Grant, IIPME (Industry
Innovation Programme on Medical Electronics), Sparsh, Grand Challenges, BioNEST, etc.
up by DST which has
3 BIRAC Regional Centres have been operationalized in Hyderabad, Bengaluru and Pune.
disbursed an initial 4 (out of 5) bio clusters have been sanctioned INR 401 Cr by DBT. 4 entrepreneurs have
instalment of INR 40 Cr. IIT joined the Harvard University, USA under Bharat-Boston Biotech Gateway.

Kharagpur has received

TECHNOLOGY BUSINESS INCUBATORS (TBIs)
INR 74 Cr. and IIT Bombay
The objective is to propel successful innovation through augmentation of incubation and
has received INR 34 Cr. R&D efforts. 15 TBIs are being set up in top educational institutes. 11 TBIs have been
From MHRD. approved and other 4 are in advanced stages.
INR 42 crore has been sanctioned and INR 17 crore has already been disbursed to 11 TBIs.
 UCCHATAR AAVISHKAR YOJANA (UAY)
The objective of UAY is to promote industry and outcome-oriented research projects by
students. INR 475 crore for 2016-18 has been earmarked under UAY and 85 research
proposals from IITs have been approved. Under this scheme, INR 162 crore has been
disbursed for research proposals from IITs.
INR 475 crore has been
MILLION MINDS AUGMENTING NATIONAL ASPIRATIONS AND KNOWLEDGE (MANAK)
earmarked under UAY for
SCHEME
2016-18. INR 285 Cr has INSPIRE Awards scheme has been rechristened as INSPIRE Awards-MANAK. 10 lakh ideas
been sanctioned and 85 will be targeted from 5 lakh schools of all boards across the country in a Financial Year.
research proposals from Over 1 lakh INSPIRE Awardees competed at District & State Level out of which 588 were
selected to participate in the 6th National Level Exhibition and Project Competition, Delhi.
IITs received INR 162.4 Cr Top 60 projects were showcased at the Annual Festival of Innovations in Rashtrapati
under the scheme. Bhavan from 4th-10th March 2017. 30,678 students have been selected, who have received
a grant of INR 10,000 each.

STARTUP INDIA YATRA

The Startup India Yatra is a platform which aims to help entrepreneurs (especially from
non-metropolitan cities) realize their startup dream. The Startup India Yatra aims to reach
each and every district of the country. So far, Startup India Yatra has been conducted in
12 States namely Gujarat, Odisha, Uttarakhand, Uttar Pradesh, Madhya Pradesh,
Chhattisgarh, Jharkhand, Telangana, Andhra Pradesh, Maharashtra, Himachal Pradesh and
Jammu & Kashmir. For more details, click here.
Reduction of Income Tax
rate for companies with an NIDHI (NATIONAL INITIATIVE FOR DEVELOPMENT AND HARNESSING INNOVATIONS)
The 8 components under NIDHI would provide a range of funding support to Startups from
annual turnover of up to
idea to market. Ignition grant/award of INR 10 lakh to be given. Guidelines and pro-forma
INR 50 crore to 25% from for submission of proposals have been published on the website. 19 new TBIs have been
30% - Union Budget, 2017 established and 9 TBIs supported for Seed Support System (SSS). 10 NIDHI-PRAYAS and 10
NIDHI-EIR have been sanctioned. Also, Grand challenge was conducted to promote
entrepreneurship amongst student community. 224 applications were received and out of
30 finalists selected, 12 student run teams were awarded ₹ 10 Lakh each.

FASTER EXIT FOR STARTUPS

The Insolvency and Bankruptcy Board of India has been constituted and the provisions
regarding corporate insolvency resolution have been implemented on 1st December,
2016. The provisions related to liquidation have been notified on 9th December, 2016. On
16th June 2017, Ministry of Corporate Affairs (MCA) notified the relevant sections 55 to 58
of Insolvency and Bankruptcy Code, 2016 pertaining to the Fast Track process and also
notified that the process shall apply to Startup (other than the partnership firm) as defined
by DIPP. With this notification, Startups shall now be able to wind up their business within
MCA has notified the
a period of 90 days from making an application for the same as compared to the 180 day
relevant sections period for other firms.
pertaining to Fast Track
STATES WITH STARTUP POLICIES
process. Startups (other 22 States viz. Andhra Pradesh, Assam, Bihar, Chhattisgarh, Goa, Gujarat, Haryana, Himachal
than partnership firm) Pradesh, Jammu and Kashmir, Jharkhand, Karnataka, Kerala, Madhya Pradesh,
Maharashtra, Odisha, Punjab, Rajasthan, Sikkim, Telangana, Uttar Pradesh, Uttarakhand
shall now be able to wind
and West Bengal have formulated Startup Policies since October 2014.
up their business within a
period of 90 days. STATE STARTUP RANKING 2018
With the aim to foster competitiveness and to propel the states and union territories to
work proactively towards promotion of their startup eco-systems, the States Startup
Ranking Framework was launched by Department of Industrial Policy and Promotion (DIPP)
on 6th February 2018. A total of 30 States and UTs have participated in this exercise.
The participating States and UTs are being evaluated on a score of 100, against 38 action
points categorized into 7 areas of intervention of the ranking framework. For details, click
here.