Start up India: Beyond the Hype

In order to promote entrepreneurship in India, the Union Government amended the definition of a Startup. A couple of years back, the startup was not defined and there was a huge confusion. Thanks to the emergence of start-ups in India and their widening footprint grabbed attentions from various hues including the policy makers. According to the official document, the following significant changes have been made to the definition of Startups:

a) Age of Startup Increased: Taking into account the long gestation period by Startups to establish, an entity shall be considered as a Startup up to seven years from the date of its incorporation/ registration (from earlier 5 years). However, in the case of Startups in the Biotechnology sector, the period shall be up to ten years from the date of incorporation/ registration.

b) No Letter of Recommendation Required: No letter of recommendation from an incubator/industry association shall be required for either recognition or tax benefits.

c) Potential of Job and Wealth Creation: The scope of definition has been broadened to include scalability of business model with the potential of employment generation or wealth creation.

In order to generate large scale employment opportunities, the Government of India launched Startup India on16th January 2016. Consistent with this goal, they came up with the Action Plan in 2016. The Action Plan tried to define,  “Startup means an entity, incorporated or registered in India not prior to five years, with annual turnover not exceeding INR 25 crore in any preceding financial year, working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.” 

The Action Plan is divided across the following areas:

  • Simplification and Handholding
  • Funding Support and Incentives
  • Industry-Academia Partnership and
  • Incubation

(Source: )

Startups India: The Status Report

Recognition: 932 Start-up applications have been recognised as Start-ups by Department of Industrial Policy and Promotion(DIPP).

Startup India Hub: Startup India Hub has been able to handle more than 48,000 queries and facilitates more than 380 Startups by providing advisory on business plans, pitching support, etc.

Income Tax Exemption: Startups can now avail income tax exemption for 3 years in a block of 7 years, if they are incorporated after 1st April 2016

Fund of Funds for Startups: A ‘fund of funds’ of INR 10,000 crore is being managed by SIDBI. INR 623.5 crore has been committed to 17 AIFs. 62 Startups funded.

Learning & Development Programme: A 4-week free Learning & Development programme covering 6 modules has been launched. More than 1,29,000 applicants have signed up for the course and 4,300 applicants have completed 100% of the course successfully.

Tinkering Labs: 457 Tinkering Labs have been approved and 350 have received a grant of INR 12 Lakh each. Pre-incubation training through 25+ mentorship sessions has been conducted.

Established Incubation Centres (EICs): 6 EICs have been approved for a scale-up grant of INR 10 Cr. 10 institutes have been approved for establishing new AICs.

The Research Park: The Research Park at IIT Gandhinagar is being set up by DST which has sanctioned INR 90 crore and disbursed an initial installment of INR 40 crore.

Ucchatar Aavishkar Yojana (UAY): INR 475 crore for 2016-18 has been earmarked under UAY and 92 research proposals from IITs have been approved. INR 75 crore has been disbursed under this scheme.

National Initiative for Development and Harnessing Innovations (Nidhi): The Union Government launched NIDI for nurturing ideas & innovation into startups.  Under NIDHI, the government would provide a range of funding support to Startups from idea to market and ignition grant/award of INR 10 lakh to be given.

States with Startup Policies: A new trend is emerging in the last couple of years. States are rolling out their own start-ups initiatives. 15 States Gujarat, Madhya Pradesh, Karnataka, Telangana, Jharkhand, Uttar Pradesh, Odisha, Chhattisgarh, Bihar, West Bengal, Uttarakhand, Andhra Pradesh, Rajasthan, Kerala, and Goa have formulated Startup Policies since October 2014.

The DIPP has written to the Ministry of Corporate Affairs to notify Startups as Fast Track firms. Once this is notified, Startups shall be able to wind up their business within a period of 90 days.


The International community is recognising Indian start-ups and one can easily notice their footprints on the global map (See the Graph). In India, whenever we talk about start-ups we talk about technology driven enterprises where only educated lot can venture and thrive. After analysing various policy pronouncements in the last couple of years, one can say that the Government’s startup initiatives are banking on digital tools. Such policy preferences pushed a huge number of entrepreneurs on the fringe. They are alienated. There is an urgent need to address their concern. The Government should widen the horizon of this much-hyped initiative. In the other word, they should work on a comprehensive policy for all entrepreneurs ranging from tech-entrepreneurial to micro-entrepreneurs like street vendors.

(Picture Credit: Startup India’s Facebook Account) 

To Top