START UP INDIA CAN STAND UP NOW

At last the media got something new to report apart from oil and China slowdown. Being stuck in parliament was not helping the NDA government and thus the ‘Start Up Mission’ was a needed revitalizer both for the economy and the government. Though many would argue that venture capitalists flush with liquidity will not need tax breaks announced by the government, at least there is clarity in the government’s intention to encourage private entrepreneurship. Since the private corporate sector is tightly holding its purse strings, the government needs to create jobs for millions of Indians to fight this deadly recession. And what would be better than people working for themselves.  

Coming to the policy announcements, the start up fund has a corpus of Rs. 10,000 crore with a credit guarantee fund of Rs. 500 crore. Though the credit guarantee fund appears to be small, it is a good beginning. Tax holiday for startups can be availed for three years over a period of 5 years for schemes approved before 2019. In addition to this, startups will not be charged for capital gains tax for venture investments.  The most important is the exit feature which can be availed within 90 days subject to the passing of the bankruptcy bill. 80% rebate on patent registration and self certification compliance with no inspection for the first three years are the other important incentives. These reforms have made a good beginning for India in 2016 and thus should be backed up by passing bankruptcy bill in the coming session to complete the whole process. Encouraging risk taking ability and capability of the youth will go a long way for making India a manufacturing hub globally surpassing the expected 7 plus GDP growth and fulfilling the long lost – ‘India Shining’ agenda of the NDA government.