Senior Assistant Professor

School of Commerce and Management,

IIMT University

 Meerut, Uttar Pradesh, India 

Startup India is basically an initiative of the central Government of India, aim  to construct a foundation  for the aim of  nurturing innovations in the country and producing entrepreneurs  in India that will help to attain a sustainable growth in the nation’s economy and produce huge amount of  employment opportunities in the nation. The central authorities through this initiavtive  aims to empower “make in India”  concept to nurture  through innovations and new discoveries with some unique ideas. The beginning of the 'Start-Up India' program on the 16th of January 2015 in New Delhi.

In the sequence of  to meet the objectives of the program, the  Indian government  is announced them  Plan of action  that addresses all of the Startup ecosystem. With this Plan of action the Government hopes to increase and  spreading up  of the Startup movement-

a) From digital/ technology sector to a wide arrears of sectors including agriculture,

manufacturing, social sector, healthcare, education, etc.; and

From existing tier 1 cities to tier 2 and tier 3 cities including semi-urban and rural areas.

The Action Plan is divided across the following areas:

b) Simplification and Handholding

c) Funding Support .

d)  Incubation. 

e) From existing tier 1 cities to tier 2 and tier 3 cities including semi-urban and rural areas.

f) Industry-Academia Partnership.

 Plan of action

Objective

To reduce the regulatory burden on Startups thereby allowing them to focus on their core business and keep compliance cost low.

Startup India Hub

To generate the single point of contact for the complete Startup ecosystem and enable exchange of knowledge and approaching the  funding.

The central government of India has taken various steps  to improve the ease of doing business practices and is also building a healthy  and vibrant environment for new  Startups, with the launch of the “Startup-India” campaign.

The “Startup India Hub” is  prime stakeholder in this vibrant ecosystem and will:

a) Work in a hub and  collaborate with Central & State governments, Indian and foreign VCs, angel networks, banks, incubators, legal partners, consultants, universities and R&D institutions.

b) Assist Startups through their lifecycle with specific focus on important aspects like getting faineance , feasibility testing, business structuring advisory, increasing of marketing skills, commercialization of technology and management concepts evaluation.

c)  Setting-ups  mentorship programs in collaboration with government organizations, incubation centers, educational centers and private institutions as well who aspire to increase innovations. To all young Indians who have the courage to enter an environment of risk, the Startup India Hub will be their, mentor,  guide and friend to support them and walk with them through their journey of entrepreneurship.

Introducing a Mobile Application and a Portal

Objective : To act and serve as the single platform for Startups for interacting with Government and Regulatory Institutions for all business needs and information exchange among various stakeholders.

Details : For the purpose of  commence operations, Startups need registration with relevant regulatory authorities. Delays or lack of clarity in registration process may lead to delays in establishment and operations of Startups, thereby reducing the ability of the business to get bank loans, employ workers and generate incomes. Enabling registration process in an easy and timely manner can reduce this burden significantly. Besides, Startups often suffer from the uncertainty regarding the exact regulatory requirements to set up its operations. In order to ensure that such information is readily available, it is intended that a checklist of required licenses covering labour licensing, environmental clearances etc. be made available. Currently, the Startup ecosystem in India also lacks formal platform(s) for Startups to connect and collaborate with other ecosystem partners.

Towards these efforts, the Government shall introduce a Mobile App to provide accessibility for:

1. Registering Startups with relevant agencies of the Government. A simple form shall be made

available for the same. The Mobile Application shall have backend integration with Ministry of Corporate Affairs and Registrar of Firms for seamless information exchange and processing of the registration applications.

2. To keep an eye on  the status of the registration applications and anytime downloading of the registration certificate. A digital version of the final registration certificate shall be made available for downloading through the Mobile App.

3. Filing for compliances and obtaining information on various clearances/ approvals/ registrations required

4. Collaborating with various Startup ecosystem partners. The Application  shall provide a collaborative stage  with a national network of stakeholders (including venture funds, incubators, academia, mentors etc.) of the Startup ecosystem to have discussions towards enhancing and bolstering  the ecosystem for new startups in the country.

Fast-tracking Patent Examination at Lower Cost

Objective: To promote awareness and adoption of IPRs by Startups and facilitate them in protecting and commercializing the IPRs by providing access to high quality Intellectual Property services and resources, including fast-track examination of patent applications.

Details: Intellectual Property Rights (IPR) are establishing as a strategic business tool for any business organization to enhance industrial competitiveness. Startups with limited resources and manpower, can sustain in this highly competitive world only through continuous growth and development oriented innovations; for this, it is equally crucial that they protect their IPRs. The scheme for “Startup Intellectual Property Protection” (SIPP) shall facilitate filing of Patents, Trademarks and Designs by innovative Startups. Various measures being taken in this direction include:

Fast-tracking of Startup patent applications: The valuation of any innovation goes up immensely, once it gets the protective cover of a patent. To this end, the patent application of Startups shall be fast-tracked for examination and disposal, so that they can realize the value of their IPRs at the earliest possible.

Relaxed Norms of Public Procurement for Startups

Objective To provide an equal platform to Startups (in the manufacturing sector) vis-à-vis the experienced entrepreneurs/ companies in public procurement Details Typically, whenever a tender is floated by a Government entity or by a PSU, very often the eligibility condition specifies either “prior experience” or “prior turnover”. Such a stipulation prohibits/ impedes Startups from participating in such tenders. At present, effective April 1, 2015 Central Government, State Government and PSUs have to compulsory procure at least 20% from the Micro, Small and Medium Enterprise (MSME). In the direction  to promote Startups, Government shall exempt Startups (in the manufacturing sector) from the criteria of “prior experience/ turnover” without any relaxation in quality standards or technical parameters. The Startups will also have to demonstrate required  capability to execute the project as per the requirements and should have their own manufacturing facility in India.

To Provide  Funding Support through a “Fund of Funds” with a Corpus of INR 10,000 crore:

Purpose  To provide funding support for development and growth of innovation driven enterprises Details One of key challenges faced by Startups in India has been access to finance. Generally Startups, due to lack of collaterals or existing cash flows, fail to justify the loans. Besides, the risk nature of Startups wherein a significant percentage fail to take-off, hampers their investment attractiveness. In order to provide funding support to Startups, Government will set up a fund with an initial corpus of INR 2,500 crore and a total corpus of INR 10,000 crore over a period 4 years (i.e. INR 2,500 crore per year) . The Fund will be in the nature of Fund of Funds, which means that it will not invest directly into Startups, but shall participate in the capital of SEBI registered Venture Funds. Key features of the Fund of Funds are highlighted below:

1. The “Fund of Funds” shall be managed by a Board with private professionals ie taken from industry bodies, academia, and successful Startups 2. Life Insurance Corporation (LIC) shall be a co-investor in the Fund of Funds 3.  The Fund of Funds shall contribute to a maximum of 50% of the stated daughter fund size. In order to be able to receive the contribution, the daughter fund should have already raised the balance 50% or more of the stated fund size. The Fund of Funds shall have representation on the governance structure/ board of the venture fund based on the contribution made. 4.  The Fund shall ensure support to a broad mix of sectors such as manufacturing, agriculture, health, education, etc. Providing Funding Support through a Fund of Funds with a Corpus of INR 10,000 crore.

Tax Exemption to Startups for 3 years

Purpose to  promote the growth of Startups and address working capital requirements Details Innovation is the essence of every Startup. Young minds kindle new ideas every day to think beyond conventional strategies of the existing corporate world. During the starting years, budding entrepreneurs struggle to evaluate the feasibility of their business idea. Significant capital investment is made in embracing changing technologies, fighting towards  rising competition and navigating through the unique challenges arising from their venture. Including , there are limited alternative sources of finance available to the small and upcoming entrepreneurs, leading to constrained cash funds. With a view to stimulate the development of Startups in India and provide them a competitive platform, profits of Startup initiatives are exempted from income-tax for a period of 3 years.

Organizing Startup Fests for Showcasing Innovation and Providing a Collaboration Platform

Objective To galvanize the Startup ecosystem and to provide national and international visibility to the Startup ecosystem in India Details A pivotal component for growth of Startups is regular communication and collaboration within the Startup community, both national as well international. An effective Startup ecosystem can’t be created by the Startups alone. It is dependent on active participation of academia, investors, industry and other stakeholders. To bolster the Startup ecosystem in India, the Government is proposing to introduce Startup fests at national and international stages. These fests would provide a platform to Startups in India to showcase their ideas and work with a larger audience comprising of potential investors, mentors and fellow Startups. As part of “Make in India” initiative, Government proposes to: • Hold one fest at the national level annually to enable all the stakeholders of Startup ecosystem to come together on one platform. • Hold one fest at the international level annually in an international city known for its Startup ecosystem. The fests shall have activities such as sessions to connect with investors, mentors, incubators and Startups, showcasing innovations, exhibitions and product launches, pitches by Startups.

Make in India Programme.

The Make in India initiative was launched by Prime Minister in September 2014 as part of a wider set of nation-building initiatives. Devised to transform India into a global design and manufacturing hub, Make in India was a timely response to a critical situation: by 2013, the much-hyped emerging markets bubble had burst, and India’s growth rate had fallen to its lowest level in a decade. The promise of the BRICS Nations (Brazil, Russia, India, China and South Africa) had faded, and India was tagged as one of the so-called ‘Fragile Five’. Global investors debated whether the world’s largest democracy was a risk or an opportunity. India’s 1.2 billion citizens questioned whether India was too big to succeed or too big to fail. India was on the brink of severe economic failure.

Make in India Campaign Objective

Ultimate objective to make India a renowned manufacturing hub for key sectors. Companies across the globe would be invited to make investment and set up factories and expand their facilities in India and use India’s highly talented and skilled manpower to create world class zero defect products. Mission is to manufacture in India and sell the products worldwide.

How this would be achieved

1. Skill development programs would be launched especially for people from rural and poor ones from urban cities

2.  25 key sectors have been short listed such as telecommunications, power, automobile, tourism, pharmaceuticals and others

3. Individuals aged 15-35 years would get high quality training in the following key areas such as welding, masonries, painting, nursing to help elder people

4. Skill certifications would be given to make training process, a standard. Currently manufacturing in India suffers due to low productivity rigid laws and poor infrastructure resulting in low quality products getting manufactured.

5. Over 1000 training centres would be opened across India in the next 2 years

6. For companies setting up factories, “Invest India” unit is being set-up in the commerce department which would be available 24/7. The main focus of this department would be to make doing business in India easy by making all the approval processes simpler and resolving the issues in getting regulatory clearances within 48-72 hours so that clearances are fast. To make this possible, special team would be available to answer all the queries related to help foreign investors/companies.

7. The e-biz portal would be soon launched which would be real time and available 24*7.

PROCESS

Make in India was launched by Prime Minister against the backdrop of this crisis, and quickly became a rallying cry for India’s innumerable stakeholders and partners. It was a powerful, galvanising call to action to India’s citizens and business leaders, and an invitation to potential partners and investors around the world. But, Make in India is much more than an inspiring slogan. It represents a comprehensive and unprecedented overhaul of out-dated processes and policies. Most importantly, it represents a complete change of the Government’s mindset – a shift from issuing authority to business partner, in keeping with Prime Minister's tenet of ‘Minimum Government, Maximum Governance’.

PLAN

To start a movement, you need a strategy that inspires, empowers and enables in equal measure. Make in India needed a different kind of campaign: instead of the typical statistics-laden newspaper advertisements, this exercise required messaging that was informative, well-packaged and most importantly, credible. It had to (a) inspire confidence in India’s capabilities amongst potential partners abroad, the Indian business community and citizens at large; (b) provide a framework for a vast amount of technical information on 25 industry sectors; and (c) reach out to a vast local and global audience via social media and constantly keep them updated about opportunities, reforms, etc.

The Department of Industrial Policy & Promotion (DIPP) worked with a group of highly specialized agencies to build brand new infrastructure, including a dedicated help desk and a mobile-first website that packed a wide array of information into a simple, sleek menu. Designed primarily for mobile screens, the site’s architecture ensured that exhaustive levels of detail are neatly tucked away so as not to overwhelm the user. 25 sector brochures were also developed: Contents included key facts and figures, policies and initiatives and sector-specific contact details, all of which was made available in print and on site.

PROGRESS

In a short space of time, the obsolete and obstructive frameworks of the past have been dismantled and replaced with a transparent and user-friendly system that is helping drive investment, foster innovation, develop skills, protect Intellectual Property (IP) and build best-in-class manufacturing infrastructure. The most striking indicator of progress is the unprecedented opening up of key sectors – including Railways, Defence, Insurance and Medical Devices – to dramatically higher levels of Foreign Direct Investment.

An Investor Facilitation Cell (IFC) dedicated for the Make in India campaign was formed in September 2014 with an objective to assist investors in seeking regulatory approvals, hand-holding services through the pre-investment phase, execution and after-care support.

Advantages

1.  It will help in creating job market for over 10 million people in the country.

2. Manufacturing done at domestic levels would boost India’s GDP, trade and economic growth.

Reference:

1. http://www.makeinindia.com/home

2. http://economictimes.indiatimes.com/news/india-unlimited/make-in-india

3. http://blogs.wsj.com/briefly/2015/08/12/five-things-that-show-modis-make-in-india-campaign-is-working

4. http://indianexpress.com/article/india/india-news-india/in-final-book-a-p-j-abdul-kalams-word-of-caution-o

5. www.financialexpress.com/‎

6. economictimes.indiatimes.com/‎

7. startupindia.gov.in

8. http://indiatoday.intoday.in/education/story/start-up-india-stand-up-india/1/573128.html

9.http://www.hindustantimes.com/business/what-narendra-modi-needs-to-do-before-we-become-a-start-up-http://www.pradhanmantriyojana.in/start-up-india-stand-up-india-scheme-hindi-pdf/

10. http://www.india-briefing.com/news/india-year-review-

11. http://www.thehindu.com/opinion/lead/opinion-on-make-in-india-campaign.