Benefits of Startup India Scheme

  • September 29, 2022
  • Dushyant Sharma
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Start-up India is the plan launched by honourable Prime Minister Shri Narendra Modi to help startups grow. This plan enables to create an ecosystem to promote and nourish entrepreneurship. However, the scheme is based on an action plan aiming at the promotion of financial banks for startup ventures and to boost entrepreneurs. 

 

As per the reports of Startup Genome, India is among top 10 largest startup ecosystems in the world. So, to become a top country, the government needs to provide better opportunities to startups and the startup India scheme is doing exactly the same. In this article, various benefits of the startup India scheme are shared.

What is a Startup Scheme in India?

The start up India scheme launch date is 16th January, 2016. Startup is an entity registered in India and it works towards innovation, development, deployment or commercialization of new products driven by technology or intellectual property. Startup's aim is to develop and commercialise which creates or adds value for customers or workflow. Criteria for startup India scheme to fulfil to be eligible for DPIIT startup recognition:

  • Start-up companies should not be older than 10 years from the date of incorporation.
  • Company must be incorporated as a Private Limited Company, Partnership Firm or Limited Liability Partnership.
  • The annual turnover should not exceed Rs. 100 crore for any financial year since its incorporation.
  • The entity should not be formed by splitting up or reconstructing an already existing business.
  • Should work towards development or improvement of a product, process or service. Also, have a scalable business model with high potential for creation of wealth & employment.

DPIIT Benefits

The Department for Promotion of Industry and Internal Trade (DPIIT) is a central government under the Ministry of Commerce and Industry in India. The startups that are registered under the DPIIT are eligible to the following benefits:

  • Legal support and easy exit process for the startups that failed.
  • Easy compliances, legal and operational processes.
  • Eligible for exemption on income tax and capital gains for eligible startups.
  • Add more funds into the startup capital and offer grants and help in creating partnerships with the top companies.

Self-Certify Compliance

Startups are allowed to self-certify the compliance for 6 labour and 3 environmental laws through an online procedure. In labour law, no inspections will be conducted for a period of 5 years. Inspection will only inspect on receipt of credible and verifiable complaint of violation, filed in writing and approved by at least one senior to the inspecting officer.

In case of environmental laws, the startups will fall under the white category. It is defined by the Central Pollution Control Board (CPCB) and will be allowed to self-certify compliances and only random checks will be carried out in these cases.

Labour Laws:

  • The Building and Other Construction Workers Act, 1996.
  • The Inter-State Migrant Workmen Act, 1979.
  • The Payment of Gratuity Act, 1972.
  • The Contract Labour Act, 1970.
  • The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
  • The Employees’ State Insurance Act, 1948.

Environment Laws

  • The Water Act, 1974.
  • The Water Cess Act, 2003.
  • The Air Act, 1981.

Simple Registration Process

The registration process of startup India is easy and hassle-free. The process is quick and can complete through single portal with some easy steps:

  • Go to e-Shram Suvidha online portal of the Ministry of Labour and Employment.
  • Register on the portal and login.
  • After login, click on "Is Any of Your Establishment a Startup?”
  • Follow the instructions

Government Contracts

The government contracts usually have high payouts and big projects, so because of that everyone wants to get their hands on these contracts. But getting these contracts is not easy but with the startup India scheme, you get better precedence when you apply for government tenders.

Networking Possibilities

Two start-up carnivals are hosted each year, so the aspiring entrepreneurs can take the advantage of these carnivals and can interact with other entrepreneurs on a global scale. This creates a large global network, which eventually helps the company to grow.

Patent Application and IPR Application

This scheme provides fast-tracking of patent applications and the reason behind this is to reduce the cost and time taken for a startup to get a patent. Basically, making the Startups financially stable so that they can protect their innovations. They also have facilitators that will assist the startups to file the applications. The government will bear the cost of such facilitation and rebate on the filing of patents.

Mobile Application and web support

The scheme also provides on-the-go accessibility for Startup registration, tracking the status of registration, filing for compliances, Startup collaboration with various Startup ecosystem partners and for applying for various schemes under the Action Plan.

Easy Termination of Business

The winding up or shutting down the business operations of startup India scheme as compared to other businesses is easier. This is a good option for entrepreneurs who want to experiment with new and innovative ideas without facing the complexity of exiting the business. As per the Insolvency and Bankruptcy Code, 2016 the startups with simple debt structure can wound up in 90 days by filing the application for insolvency.

Conclusion

To conclude, the DPIIT through the startup India scheme has executed various projects & undertaken recurring models to propel the Indian Startup Ecosystem. In a broad way, the startup scheme is reducing the burden on startups, so that the entrepreneurs can focus on their core business and keep the compliances costs low. Reach out to Registrationwala to register your business in an easy and hassle-free way.


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Dushyant Sharma
Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.

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