We spent January 16th glued to our TV screens.
Why you ask?
Well, in case you haven’t heard already, our Prime Minister, Mr. Narendra Modi announced some of the action plan points for StartUp India on that day. We were all agog and after the announcement, we…
I mean, one of the greatest accomplishments from the evening was that the word ‘startup’ has now been accepted by the government of India; and by and large broke a stigma attached to being an “entrepreneur.” For them to believe that a bunch of young and talented minds could come together, build something leveraging technology & be potential job creators is HUGEEEE.
As a result, the otherwise hot and bustling entrepreneurial climate now seems visibly calmer and positive. How long will this calm last? Umm, we can’t say yet. But…
With all the posters floating around, by now you must be aware of the laudable points of the new policy like tax exemption, reduction in patent fees, easy entry and exit schemes, cushion to investors and so on.
Here are the actionable points:
The likes of us are definitely a cheery lot at the moment and it’s really encouraging in more ways than one to see that our Government is looking to remove obstacles and facilitate this new ecosystem that we’ve thrived in, this far. While most of the pointers reflect a welcoming climate, there is a little voice in our heads playing on repeat – “Is this for real?.
First things first, we are not quite sure of the clear definition for ‘startups’. Meaning, a lot of companies could join the bandwagon under the same banner to get exempted from taxes. And some startups in reality, might not be eligible altogether for the schemes under the Startup Action Plan.
Sure, Section A defines a start-up, but we will have to wait and watch if what is said in language can actually transpire into law.
Secondly, the Government is now going to have an App w.e.f the 1st of April, 2016, that will help startups to register, track and apply for schemes. All fingers crossed that this won’t take more than a day. However, the ‘Action Plan’ put out by the government has no mention of how long it will take for a start-up to be registered and on what basis this registration will happen.
“The Government of India will levy no Income Tax on Profits to startups for first 3 years” – Err..
Dear GOI, We’re glad you recognized us, but maybe taking the time to know us a little better would save you from the tedious procedure of making irrelevant points. We hope you are aware that most startups are VERY unlikely to make any profit in the first 3 years.
Running around in circles, are we?
We are pretty chuffed that businesses which fail to take off, can close in 90 days. This is a big relief for the entrepreneurs and even the investors whose money gets stuck in such a scenario. Simplifying the exit & shutdown process is definitely something that needed immediate repair. Also, an 80% rebate on patent filing sounds impressive. Unlike the west, in the Indian startup scene barely any patents or IPR’s are filed. And this might just push entrepreneurs in the right direction, but will still be relevant to a very small chunk of the organisations in the startup pool. Alongside all of this, a whopping fund of 10,000 Cr to startups feels highly motivating, though we don’t know yet where that money is coming from and what the fund will facilitate. This country needs the magnitude of efforts that led to the Industrial Revolution in 1740 and we think that the Start-Up India announcement is trying to bring that about, at least in mindset.
Overall, in the light of taking baby steps and eyebrows being raised all at once, we will have to wait another day to find out how relevant and executable the ‘Action Plan’ truly is. While a major lot are still contemplating if it will unleash the entrepreneurial force of India and lead to massive economic growth or if it’s just big words and no deeds – but we truly see this as the foundation to bigger, better changes in the current scenario.
Onwards & Upwards,