Twin side of same coin: Startups and SMEs
A startup company or startup or start-up is an entrepreneurial venture or a new business in the form of a company, a partnership designed to search for a repeatable and scalable business model. These companies, generally newly created, are innovative in a process of development, validation and research for target markets.T he essence of startups is generally related to the concepts of ambition, innovation, scalability, and growth. India is passing through in a phase where we need growth of SME sector along with large industries; Government is also trying to merge these two thoughts (Start ups and SMEs). Mr. PM has recently announced multiple benefits for start ups. Top takeaways from the prime minister's speech are as under:
  • Compliance regime based on self certification
    The objective of compliance regime based on self certification is to reduce the regulatory burden on startups. This self-certification will apply to laws like payment of gratuity, contract labour, employees provident fund, water and air pollution acts.
  • Startup India hub
    A startup India hub will be created as a single point of contact for the entire startup ecosystem to enable knowledge exchange and access to funding.
  • Simplifying the startup process
     A startup will be to able to set up by just filling up a short form through a mobile app and online portal.  A mobile app will be launched on April 1 through which startups can be registered in a day. There will also be a portal for clearances, approvals and registrations
  • Patent protection
    The government is also working on a legal support for fast-tracking patent examination at lower costs. It will promote awareness and adoption of Intellectual Property Rights (IPRs) by startups and help them protect and commercialise IPRs.
  • Funds of funds with a corpus of Rs 10,000 crore
    In order to provide funding support to startups, the government will set up a fund with an initial corpus of Rs 2,500 crore and a total corpus of Rs 10,000 crore over four years. The fund would be managed by private professionals drawn from the industry while LIC will be a co-investor in the fund. The credit guarantee fund for start-ups would help flow of venture debt from the banking system to start-ups by standing guarantee against risks.
  • Credit Guarantee Fund
    A National Credit Guarantee Trust Company is being envisaged with a budgetary allocation of Rs 500 crore per year for the next four years.
  • Exemption from Capital Gains Tax
    Currently, investments by venture capital funds in startups are exempt from this law. Now, the same is being extended to investments made by incubators in startups.
  • Tax exemption for startups
    Income tax exemption to startups announced for three years
  • Tax exemption on investments above Fair Market Value
  • Startup fests
    Innovation core programs for students in 5 lakh schools. There will also be an annual incubator grand challenge to create world class incubators
  • Launch of Atal Innovation Mission
    Atal Innovation Mission started to give an impetus to innovation and encourage the talent among the people
  • Setting up of 35 new incubators in institutions
    PPP model being considered for 35 new incubators, 31 innovation centres at national institutes
  • Setting up of 7 new research parks
    Government shall set up seven new research parks - six in IITs, one in IISc with an initial investment of Rs 100 crore each.
  • Promote entrepreneurship in biotechnology
    Five new bio clusters, 50 new bio incubators, 150 technology transfer offices and 20 bio connect offices will be established.
  • Innovation focused programmes for students
    There will be innovation core programs for students in 5 lakh schools.
  • Panel of facilitators to provide legal support and assist in filing of patent application
  • 80 per cent rebate on filing patent applications by startups
  • Relaxed norms of public procurement for startups
  • Faster exits for startups
Similarly; There are multiple schemes has launched by government for promote SME sector such as :
  • Pradhanmantari Mudra Yojna
  • Credit linked capital subsidy scheme (CLCSS)
  • Technology Upgradation fund scheme (TUFS)
  • Credit guarantee fund trust for Micro & Small Enterprises
So this is a right time to all new entrepreneurs to consolidate their business idea with blend of startup India and SME sector.
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