While we are well aware that PM Narendra Modi is all set to announce the Start Up India, Stand Up India action plan on January 16, the government while formulating the plan has drawn a precise definition to ensure that benefits under the programme go to companies that are engaged in innovation.
As per the close sources from the government the definition of a startup is likely to exclude entities formed by splitting or restructuring businesses or those that have been in existence for five years and exceed Rs 25 crore in sales.
It will however be a great initiative for the startups that fit the description as such ventures will be eligible for tax incentives and simplified compliance rules. Apart from innovation, such startups have to be engaged in the development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property, said a government official aware of the matter.
The launch of this programme will be attended by biggies like SoftBank Chief Executive Officer Masayoshi Son and Uber founder Travis Kalanick along with 40 top CEOs and founders of startups, venture capitalists and angel investors from Silicon Valley. They will be among the big names addressing the startup lobby of the country. With this initiative the government wants to create a startup-friendly ecosystem which in turn will be a potent means of creating jobs that will boost incomes and growth.
The Department of Industrial Policy & Promotion (DIPP), which has been given with the responsibility of piloting the Start Up India, Stand Up India initiative, plans to introduce several checks and balances that will determine the nature of innovation that the government of India is looking for.
In order to boost investments into startups it is expected that Investors in such ventures will be given with an exemption on capital gains besides several procedural relaxations.