Despite Narendra Modi government’s emphasis on Make in India and the launch of the Startup India program, there have been only ten startups which have been deemed eligible by the Department of Industrial Policy and Promotion (DIPP) —the nodal agency which is responsible for the implementation of the Startup India program.
Currently, it is also undergoing the process of redefining what would constitute as a startup, which would also include the declaration of the number of jobs that they would create.
According to a media report, a senior government official has said, “We will soon notify the new definition of a startup which goes beyond innovation.”
For the present, innovation is the main criteria for benefits such as tax holidays and fast-track patent filing. But now, the startup would have to declare the estimated number of jobs, meet specific financial criteria, and also showcase the innovation in its product or service.
Some of the other perks also include income tax exemption for three years and greater chances of getting access to public sector projects.
This move is also being seen as the push by the government to create jobs in the country by leveraging startup ecosystem. As of now DIPP has recognized 798 applications but have not passed on tax benefits. It has also decided to relax some of the norms and has also thought of doing away with the requirement of certification by a government agency for the startup.
Also, another important update is the increase of the maximum age for qualifications for startups in the medical and biotechnology sector; acknowledging the longer gestation period in these two sectors.
According to a Nasscom report, startups are supposed to create 250,000 jobs which is an increase from 80,000 by 2020.
In another report, about two-thirds of the startups, in a study undertaken by Kantar IMRB, have stated that poor implementation has undermined the government initiative.