The Narendra Modi government’s Start-up action plan has completely overwhelmed India’s young entrepreneurs who feel that the policy support would help Indian start-ups nurture their dreams on Indian soil itself. They feel that policy facilitation would help new age companies to contribute more meaningfully to India’s growth story. “India’s start-up policy reflects the important role that start-ups are going to play in generating growth and creating employment in the process,” says Prafulla Mathur, founder and CEO of Wudstay, an eight-month-old start-up in budget accommodation space. Mathur, the second largest hotel aggregator, feels that the PM’s drive to take the whole start-up ecosystem to a higher pedestal “has the power to change the economic course of the nation.”
With the aim to transform the Indian youth from job seekers to job providers, the government last week announced its much awaited action plan to energise India’s start-up universe. With this action plan, “the government hopes to accelerate spreading of the start-up movement from digital/ technology sector to a wide array of sectors including agriculture, manufacturing, social sector, healthcare, education et cetera. Policy makers feel that the aspiration of this younger nation cannot be met through reviving the old economy (factories, government jobs and conventional private opportunities) only. Apart from the government and the private sector, the success of the start-up sector is expected to give a meaningful push to the economy.
Apart from providing the ease to start or exit a company, the plan exempts Indian start-ups (defined as having a turnover of not more than 25 crore) from paying income tax for the initial three years. There are a very few references of successful exits in India and this policy is expected to provide a framework to do that. The government has also created a fund of Rs.10,000 crore to provide critical funding support to start-ups. It has also provided capital gains (tax) benefits to people who invest in Indian start-ups. The start-ups would also be encouraged to do business with the government with start-up’s (younger) age and (sometime nil) experience not disqualifying them while begging government contracts.
“The policy success, however, lies in its execution and speed is going to be a key factor,” says Amit Ramani, founder and CEO, Awfis Space Solutions which is about a year old start-up renting fully-automated office spaces to young entrepreneurs. “This pro-active policy with minimal regulation would act as a catalyst triggering a revolution that I think is required to transform India into an innovative country”, he adds. Official push to put entrepreneurship and innovation as a part of school and college curriculum is also being hailed by younger entrepreneurs. “We would be happy if the taxation benefits are also extended to start-ups which have started in last two to three years,” wishes Mathur. He also hopes of getting some exemption on service tax for those start-ups operating in the services sector.