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Ease of Doing Business in India for Startups

  • Author Redufy
Ease of Doing Business in India for Startups

India is a growing economy, and trade has also expanded, and investment has also increased. The business has become simple in India, which goes on to say that entrepreneurs have greater opportunities to grow and succeed. India also ranks second among the BRICS, making its presence felt at the top of the list in South Asia for the very first time. There has been a step forward of 53 notches over the last two years. According to the World Bank, India is seventy-seventh in business-friendliness.

Prime Minister Narendra Modi launched the Startup India initiative on India's 69th Independence Day aiming to give India's talented young generation more "energy and inspiration to do something new for India and humanity." The project was set up to provide funding resources and opportunities in areas such as patent filing and simplification of the start-up process with a vision to create a platform where budding entrepreneurs can develop themselves without any hassles.

 

Tax & Funding

According to the Finance Act 2016, start-ups are excluded from income tax in a block of five years for a term of three years if they are licensed between 1 April 2016 and 31 March 2019. In the Union Budget 2017-18, the government announced an extension to seven years for all qualifying start-ups in the duration of profit-linked deductions. The introduction of a new section 54EE and 54 GB enables an investor to exclude investment in a fund declared by the central government from long-term capital gains.

A USD 1.6 billion' Fund of Funds' has been launched and is being operated by India's Small Industries Development Bank (SIDBI) to provide financial support to startups. This fund invests in "Alternate Investment Funds (AIFs)" listed by SEBI, which in turn invests in startups. With 62 startups receiving funding from various AIFs, USD 92 million were issued to SIDBI.

 

Regulation & Support

Low-cost legal aid in filing Intellectual Good applications for start-ups and speeding up the process for the same. A committee of 423 patent and design applications facilitators and 596 trademark applications facilitators has been set up to assist companies in filing IP applications. As of now, as well as free legal aid, 179 requests have been given up to 80 discount in patent fees.

Enforcement costs are reduced and enforcement requirements are streamlined to allow start-ups to concentrate on their core business. Startups are excluded from environmental clearances and are required to receive self-certification. However, self-certification has also been allowed under six labour laws, in which no audits will be carried out for a period of three years. To entrepreneurs, it makes business trouble free.

 

Learning & Development

A single contact point, i.e.' Startup India Hub,' is developed to facilitate information sharing and access to funding. As a nodal agency, the Hub works to organize the fragmented startup community, create an interconnected ecosystem, and reduce asymmetry in expertise. In addition, the Startup India Learning Program, a free four-week online course, provides aspiring and seasoned entrepreneurs with guidance on how to develop business plans and tackle challenges. Technology India Hub connects all the technology ecosystem participants, including entrepreneurs, investors, incubators, mentors, Govt. Agencies and associates in the business.

New incubation centres, under the Atal Innovation Mission,  are being set up across India with the goal of providing the necessary infrastructure or any other assistance to start-ups, especially in their initial phase. The undertaken government initiatives, a surge in educational incubators, enhanced investor interest and rising online consumers are likely to further propel the start-up landscape. The country is expected to host 10,500 start-ups by 2020, employing over 210,000 workers, despite the pace at which the start-up ecosystem is evolving in India.