8 Ways That Startup India Will Benefit Indian Startups

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Startup India is yet another initiative by PM Modi after the Make in India and Digital India initiatives. While the “pro-business” PM has been an advocate of the new age economic revolution in the form of startups, he has now gone a step ahead and announced a few good things for the benefit of entrepreneurs in India.

In what was termed as “one of the biggest startup conferences”, PM Modi charted out an action plan that included new policies and initiatives for startups. The announcements made by the PM and the Finance Minister can be a potential game changer for the Indian startup ecosystem.

Here are the 8 things that were announced at the Startup India forum in the interest of the startups:

1.Rs 10, 000 crore fund:

One of the biggest announcements made was a Rs 10,000 crore fund for the startups over a period of four years that will have an initial corpus of Rs 2,500 crore. This fund will be managed by a board that will have people from different portfolios like academia, industry bodies, successful startups and so on. It will invest in different sectors like agriculture, health and education.

While this is a great move by the government, it will remain to be seen how soon the implementation will take place and how easily the deserving candidates can get access to the funds. Though of course being a government body, it might be made of less sterner stuff than private investors.

2.Mobile app registration:   

Registration for startups will see a change as the government plans to have a single registration platform in the form of a mobile app. It will launch a portal and an app on April 1 that will help startups register themselves in a day. It will serve as a single point of contact in terms of approvals, clearances, registrations and so on.

This is a good step that will do away with the numerous paper works one has to go through trying to register a company. The running around to different government offices, not to mention the bribes involved to get one’s way through. Successful implementation can do away with a lot of vices.

3.No labour inspection for 3 years:

It was also announced that there will be no labour inspection for startups for the first three years that will reduce the regulatory burden for startups and allow them to self-certify compliance on nine labour and environment laws through the app itself.

 Though this might be a welcome move for the startup themselves, the employees of such startups stand to lose out should they be facing any work hazards as most startups are known to not have any proper HR policies follow any labour laws.

4.Subsidized patent applications:

In a brave move to encourage startups, PM Modi also said that the government will bear the cost of patents, trademarks and designs for startups. This will be on a pilot basis for a year with 80% rebate for startups to protect intellection property.

While this is a great gesture, we’re not sure about the quality of work that will come out from government agencies and most startups might want to get things done through private individuals as per the way they want.

5.Tax exemption for 3 years:

Startups will also be exempted from income-tax for the first 3 years of their existence to help growth and retain capital. However, for a startup to get tax benefits, it has to receive a certification from a ministerial Board that is to be set up for such purposes.

But, we don’t know how long it will take for such a Board to take shape, what will be the composition and the frequency of their meetings to make decisions. Apart from that, most of the times, it takes five years for a startup to break even, so instead of three years, it would make sense if the limit was extended to five years.

6.Easy exit for startups:

This will be greatly helpful for startups if the spirit of implementation follows that of the announcement. Startups can wound up operations in 90 days since the day of making the application on a fast track basis. The recent Insolvency and Bankruptcy Bill has made voluntary closure of business. It will require appointing a liquidator and paying off all the creditors when selling off assets. This has been termed as a welcome move by many in the industry.

7.Innovation in schools:

In a bid to encourage innovation and early entrepreneurship, an innovation core program targeted towards school children was announced. It aims at getting 10 lakh innovations from 5 lakh schools out of which 100 will be shortlisted and showcased at an Annual Festival of Innovations, to be held in Rashtrapati Bhavan. It is a good idea to catch them young and encourage innovators but the challenge will again lie in implementation.


The government will identify and fund ten incubators across the country. While this is a noble idea that can literally work wonders, a lot will depend on how the execution happens. The biggest challenge will be to maintain the quality of such government funded incubators as a lot of incubators turn into glorified real estate agents just offering workspaces. The money invested in such things by the government can get wasted unless closely monitored through an experienced panel involving experts from different backgrounds.

The initiative and vision is great considering the time at which it has come. The past few years has seen India transform into a super power of sorts as far as the evolution of startups is concerned. Interestingly though, a lot of startups have disappeared in the same speed that they came.

We at Unspun have been working with startups in different capacities and know the in and out of how this industry works. Associate with us and let us help you leverage the various tools available to help your business flourish.