Startup India: Nearly 1.16 Lakh Entities Get Recognition In 8 Years
Country’s startup ecosystem is flourishing, with close to 1.16 lakh government-recognized startups operating under the Startup India initiative. The government has officially acknowledged 1,14,902 entities as startups as of October 31, 2023, since the program's launch in 2016, said Minister of State for Commerce and Industry Som Parkash. While the Ministry reported this figure, data from the Startup India portal indicates that 1,15,976 startups have registered under the initiative in nearly eight years.
To qualify as a startup under the program, companies must have a period of existence and operations not exceeding 10 years from the date of incorporation. They should be incorporated as a private limited company, a registered partnership firm, or a limited liability partnership with an annual turnover not exceeding INR 100 crore for any financial year since incorporation. Additionally, the entity should not have originated from splitting up or reconstructing an existing business and must focus on developing or improving a product, process, or service with a scalable business model.
Benefits For Recognized Startups
Recognized entities enjoy various benefits, including compliance self-certification for labor and environmental laws, assistance in patent applications, and tax exemption under section 80IAC of the Income-tax Act. To date, the government has granted 2,977 income tax exemptions, and 3,654 startups have received funding under the SIDBI Fund of Funds scheme, which began in 2016 with a corpus of INR 10,000 crore. This scheme supports SEBI-registered Alternative Investment Funds, known as daughter funds, which, in turn, invest in startups through equity and equity-linked instruments.
Apart from the Fund of Funds scheme, the Startup India program includes two other flagship schemes that are:
Startup India Seed Fund Scheme (SISFS): Commenced on April 1, 2021, for a period of four years, the scheme, with a corpus of INR 493, aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry, and commercialization. The Experts Advisory Committee (EAC), under SISFS, is responsible for the overall execution and monitoring of the scheme. The EAC evaluates and selects incubators for the allocation of funds under the scheme. As per the provisions of the scheme, the selected incubators shortlist startups based on parameters outlined in the scheme guidelines.
Credit Guarantee Scheme For Startups (CGSS): The government has established the Credit Guarantee Scheme for startups to provide credit guarantees to loans extended to DPIIT-recognized startups by Scheduled Commercial Banks, NBFCs, and Venture Debt Funds (VDFs) under SEBI-registered Alternative Investment Funds. CGSS is aimed at providing a credit guarantee up to a specified limit against loans extended by Member Institutions (MIs) to finance eligible borrowers, such as DPIIT-recognized startups.
With nearly 1.16 lakh startups gaining recognition under the Startup India initiative, India's entrepreneurial scene is buzzing with innovation and growth. The government's support, evident through tax exemptions and various funding programs, sets the stage for an exciting future of creativity and economic prosperity.