I have been writing about places, music, books, and of course my beloved Delhi. This time I am posting something that is different to the topics that I generally choose, something related to the affairs of my country, India. So here it goes:
According to The Economic Times, the startup ecosystem in India ranks third globally with a growth rate of forty percent, unperturbed by the recent economic downturn all around the world. The Indian economy, in fact, grew at a rate of 7.5% in fiscal year 2015, outpacing even that of China (6.9%). Faith of investors is shifting towards India, as evident from the large number of investments being made by Chinese giants, such as Alibaba and Tencent Holdings in Indian startups, such as Paytm and Practo, respectively. The popularity of startups is further bound to increase after Prime Minister, Shri Narendra Modi, announced the Start-up India Policy. This Policy will complement the ‘MAKE IN INDIA’ campaign which was started in September, 2014 and together they are expected to drive entrepreneurship and innovation in India.
The Policy is expected to drive innovation and assist the startups to establish themselves firmly in the Indian market. Incentives, disclosed by the Policy, such as setting up of seven research parks in Chennai with investments of Rupees hundred crores each, launching innovation programs for students, and grand challenge program awards of Rupees one million to twenty students in innovation from the innovation entrepreneurship development centers, will assist in boosting innovation in India.
A plethora of other incentives to help strengthen the startup culture in India are also included in the Policy. Incentives related to tax, such as income tax exemptions up to 3 years and exemption on capital gains, are lucrative for the startups. Additional incentives, such as funding support (Government of India has put aside Rupees 10,000 crores for this purpose), creating start-up hubs in national institutions, bringing startups together by holding national and international level festivals, and a faster exit scheme for startups whose ideas fail to take off, add to the attractiveness of this Policy. Also, a mobile application is expected to be launched in April, 2016 to serve as a single platform for the startups to exchange information and interact with government and regulatory institutions. This app will ensure that the startups can be registered, through the app, in one day, thus reducing paperwork and saving time.
The Policy includes several measures to boost the creation of Intellectual Property (IP) assets. A startup making a new product or process, i.e., creating an invention, will be able to enjoy certain incentives including fast tracking of patent applications, eighty percent rebate in filing fees (of a patent application), etc. A liberalized patent regime has also been proposed to help startup businesses to register patents. The Policy also proposes to set up a Start-Up Intellectual Property Protection (SIPP) scheme to facilitate filing of patents, trademarks, and designs. Under this scheme the Policy proposes to provide IP services to the startups, through facilitators, under the aegis of the Controller General of Patents, Trademarks, and Designs, to file for patents easily and swiftly at no cost to the startups.
India is not the first country to implement a special Policy for startups. Similar policies have been in action in countries like Chile and South Korea. Start-up Chile, for instance, was launched in 2010 with an aim to attract potential entrepreneurs from all around the globe to work on their startups in Santiago, Chile’s capital city. Today Start-up Chile has over two thousand applications vying for the hundred available spots, and in addition has been ranked at twenty in the 2012 Compass Global Startup ecosystem report. Thus, Start-up Chile provides a benchmark for measuring Start-up India Policy’s success over the next couple of years.
In conclusion, easier filing of patent applications with the help of facilitators, income tax exemptions, reduction of red tape, collaborating with national institutions in India to create start-up hubs, and ultimately providing more employment opportunities to the people are some of the major highlights of this Policy. In 2014, 3100 startups were registered in India with a projection of more than 11,500 by the end of 2020, which shows how eagerly entrepreneurs are waiting to unleash their ideas. It certainly appears that the Policy has come at the right time to provide a much needed fillip to the startup ecosystem in India. The incentives outlined by this Policy should prove beneficial for setting up of new startups provided they are implemented efficiently and in the true spirit of the underlying objective of transforming India into a Global Economic Hotspot.
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