Start-up India initiative | Promoting start-ups in India

Start-up India

Background of Start-up India initiative

Indian startup firms were facing several issues while running the businesses like funding, lengthy government processes, long incorporations, restrictions on shaping transactions, exits and compliance with various laws & regulations before 2014. NDA government planned a “Start-up India initiative “ in an attempt to decode these issues and to boost the entrepreneurship in the country.

In his Independence Day address on 15th August 2015, Honourable PM Modi announced governments flagship initiative of “Startup India“ and incentives offered for such ventures who encourage entrepreneurship and innovation. It emphasized on ease of starting the new businesses to provide the start-up environment and build a nation of job producers instead of job seekers. Just five months later on 16th January 2016, PM unveiled the historic Startup Action Plan in a day-long ceremony.

Start-up India program provides bank grants for the innovative start-ups to encourage entrepreneurship and create employment opportunities. It aims to encourage founders & promote innovations among start-ups. [1]

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The government has outlined an action plan to address all problems associated with start-up India initiative. It is aimed at accelerating the progress of start-ups.

  1. From technology sector to a wide range of fields including manufacturing, agriculture, healthcare, education, etc., and
  2. From present tier 1 cities to tier 2 and tier 3 cities containing semi-urban & rural areas [2]

Key points from the action plan – Start-up India

  1. Simplifying the startup process with Single Window Clearance through a mobile app
  2. Fund of funds with a total corpus Rs 10,000 crore (Covered for four years)
  3. Compliance based Self-certification
  4. Start-up India hub – A single point of communication for the entire Startup ecosystem
  5. Patent protection – Fast track mechanisms for start-ups patent applications
  6. Exception from Capital Gain Tax for three years
  7. Exemption from tax on earnings for three years (extended till five years if no profit made in 3 years)
  8. Exemption from tax for incubators investing above Fair Market Value
  9. Faster Exits (90-day exit window)
  10. New initiatives for IPR rights protection
  11. Encourage entrepreneurship through Credit Guarantee Fund (Rs 500 crore per year)
  12. Promoting entrepreneurship through Atal Innovation Mission
  13. Innovation-centered initiatives for students – Five lakh schools to target ten lakh children for innovation program.
  14. Establishing 35 new incubators in institutions

Objectives – Start-up India

The primary goal of Start-up India is a single point of contact for the entire start-up environment and enables knowledge exchange and access to funding.

Middle-class youngsters from India have enormous potential with some of the best brains in the country. They desire to change the condition of society with demanding products and services through technology & innovation. Keeping them in focus, Government of India introduced Startup India with a focus on providing required infrastructure, amenities and funding to them. The government aims to improve ease of doing business and is also building an engaging environment for budding start-up entrepreneurs.

Amongst many other initiatives, the government would organize mentorship programs in collaboration with government organizations, incubation hubs, educational institutes and private companies which aim to encourage innovation.

To sum it all to those who want to begin new businesses with unique ideas and innovation, Start-up India will be their mentor and guide through every facet of its life cycle.

Eligibility – Start-up India

A start-up is an entity established in India which is started less than five years ago and has revenue less than Rs, 25 Crore. [3]

1. The company is enrolled as a Private Limited company
2. Its age should not be more than five years
3. Its turnover has not exceeded INR 25 crore in any financial year
4. It is working towards innovation, development, and commercialization of new product or services driven by technology
5. It has not been formed by reconstruction of an existing business already in operation or as a subsidiary
    Additional requirements:

  1. A start-up should provide application form along with all relevant documents to the Incubator.
  2. It will agree to visit in-person or communicate with the Incubator as per the requirements approved by Incubator.
  3. Start-up will agree to sign the Undertakings given by the Incubator, and their importance will be clarified satisfactorily by the Incubator to the Start-ups.


Start-up India initiative got an enormous response with more than 200 applications registered within a month. The movement expected to grow further with the Central government is in action of joining hands with state governments and institutes to set up start-up hub.

However, since then the response is indifferent as it received around 1500 applications for registration, around 500 of them recognized as start-ups and only around 100 fitted to receive tax exceptions until January 27th, 2016. It will surely not please the government with the scale of this initiative and amount of investment involved.


The application process itself has fundamental problems. Start-up selection and registration procedure are not streamlined or online. In fact, the approval process involves a lot of human intervention and discretionary powers, which further opens the door for red-tape and corruption.

The government should concentrate more on the simplifying of tax laws instead of complicating them. It should look at lesser discretionary powers on government’s part and results-driven online approvals registrations, therefore producing more conducive environment.


To register your business in Start-up India program, one can contact on below websites:

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1 Comment
  1. It seems to be a cause for new innovative support. I am a Bio Graduate of 1973 and INNOVATED final Curing HERBAL medicines for the treatment of CANCER, TUMOR, ASTHMA, Arthritis and other disease at a very low cost and without any side effect. Am I eligible for stat up recognition and support?

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