Startup India Programme – Empowering Startups for Growth

Startup India is a flagship initiative launched by the Government of India on 16th January, 2016 to build a strong system for innovation and startups in the country which will drive economic growth and generate large scale employment opportunities. The Standup India scheme was launched on 5th April, 2016 to facilitate bank loans from Scheduled Commercial Banks (SCBs) between Rs.10 lakh to Rs.1 Crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) and one woman per bank branch for setting up a greenfield enterprise in trading, services or manufacturing sector. The Government through this initiative aims to empower startups to grow through innovation and design. The scheme is expected to benefit at least 2.5 lakh borrowers.


Each enterprise will provide jobs depending on the nature of its operation.

The salient features of Startup India are as follows:

1. Simplification and Handholding

  • Simple Compliance Regime for startups  based on Self-certification
  • Launch of Mobile app and Portal for compliance and information exchange
  • Startup India Hub to handhold startups during various phases of their                                 development
  • Legal support  and fast-tracking patent examination at reduced costs
  • Relaxed norms of public procurement for startups
  • Faster exit for startups

2. Funding support and Incentives

  • Providing funding support through a Fund of Funds with a corpus of Rupees 10,000 crore.
  • Credit guarantee fund for startups.
  • Tax exemption on capital gains invested in Fund of Funds.
  • Tax exemption to startups for 3 years.

3.Industry-Academia Partnership and Incubation

  • Organizing Startup Fests to showcase innovations and providing  collaboration platforms.
  • Launch of Atal Innovation Mission (AIM) with Self –Employment and Talent Utilization (SETU) Program of NITI Aayog.
  • Harnessing private sector expertise for setting up incubators.
  • Setting up of 7 new research parks modeled on the Research Park at IIT Madras.
  • Launching of innovation focused programs for students.
  • Annual Incubator Grand Challenge to promote good practices among incubators.

4. Credit Guarantee Fund

  • The initiative provides for creating a credit guarantee fund for startups through Small Industries Development Bank of India (SIDBI) with a Corpus of Rs.500 crore per year for the next four years.
  • With this Action Plan the Government intends to accelerate spreading of the startup movement From digital/technology sector to a wide array of sectors including agriculture, manufacturing, social sector, healthcare, education, etc.
  • From existing tier 1 cities to tier 2 and tier 3 cities including semi-urban and rural areas.
  • The progress on the action points of the Startup India Action plan is Annexed.
  • The Action Plan envisages setting up of 7 New Research Parks modeled on the Research Park at IIT Madras at IITs in Guwahati, Hyderabad, Kanpur, Kharagpur, Bangalore, Gandhinagar and Delhi and setting-up/scaling-up of 18 Technology Business Incubators (TBIs) at NITs/IITs/IIMs etc. as per the funding model of Department of Science and Technology.  Startups will be able to access the facilities of the Research parks and Incubators and also receive the required support to give shape to their ideas.
  • This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Lok Sabha today.

5. Tax exemption

  • To attract more funds, exemption shall be given to persons who have capital gains during the year, if they have invested such capital gains in the Fund of Funds recognized by the Government. This will augment the funds available to various VCs/AIFs for investment in Startups.
  • Tax exemption is also provided for investment above fair market value. This means that even if the investment by a big investor in startup seems to be very high compared to the total value of the startup firm, capital gains tax will not be imposed on the investment.

6. Startup India Portal and Mobile App

  • These have been launched as online platform for providing updates, information, recognition and eligibility certificates to Startups and other stakeholders

7. To Download Startup India’s Action Plan.

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