Startup India is the flagship initiative of the Government of India. It aims to strengthen entrepreneurial skills, create innovation ecosystems, provide support for startups and boost angel investments.
The government has also streamlined various processes, easing out their incubation process. The Prime Minister has approved several public-private partnership (PPP) projects. The Prime Minister himself has spoken about his “dream to see a new culture of entrepreneurship” in the country at the Startup India event in Delhi on 16th August 2016.Jobsrose
A Committee on Startups, chaired by the NITI Aayog CEO and Devi Shetty of EY is working on a comprehensive framework and policy to create an ecosystem for startups in India. The committee will also recommend separation of startups from large businesses.
The government aims to encourage and promote startups and young entrepreneurs in general by creating a conducive environment for them through policies such as “Startup India” scheme, Launchpad scheme (a mechanism to provide seed funding), etc. The government has said that it will enable angel investors except those with money laundering issues or who were involved in other cases involving frauds.
Flagship Initiative of the Government of India: Startup India :
1. Equity free funding to startups from Government entities, VCs , PE Firms and incubators:
The government will provide equity free funding to startups through various initiatives including the Department of Science & Technology – Innovation Promotion Facilitation Scheme (IPFS) and department of industrial policy & promotion (DIPP)-Fund of funds or Fund of Funds for Startups.
2. Funding to be transferred directly into the bank account of a startup for any loss incurred during incubation period:
Funding under DIPP’s Startup India Action plan will be transferred directly into bank account of a startup for any loss incurred during the incubation period. This will ensure transparency in funding given to startups.
3.A new Start-up policy to be issued:
The government will issue a “start-up policy” in 2017. The policy aims to increase access to funding and develop an ecosystem.
4.Funding will be provided to startups by setting up an online platform:
The Department of Financial Services will set up a fund, in association with banks and financial institutions, which will provide capital to startups in the country by setting up an online platform. This Fund of Funds for Startups aims to facilitate access to finance for startups on priority basis. It is estimated that funding given under this scheme will be ₹10,000 crore over three years.
5.Online database of startups:
A unified database of all registered/approved startups shall be created as per the recommendations of Department of Industrial Policy and Promotion (DIPP) Startup India Action Plan.
6. Pursue ‘Make in India’ initiative:
The government will work towards building a ‘startup ecosystem’ in the country by promoting innovation and promoting the ‘Make in India’ initiative. The government will help startups to source their requirements from Indian companies and ensure better availability of domestic supply chains.
7. Protecting startups while under incubation:
The government will create an online portal for tracking of startup registration to control liabilities and standards of a startup once it is registered with the Ministry of Communications & IT under PM’s Startup India Action plan.
8. Hiring a Chief Data Officer:
The government will make sure that startups have access to all the key data required by them in their interactions with the department of financial services. The Data protection authority is also being requested to make a data protection advisory committee for startups.
The Chief Data Officer will be based out of DIPP’s office with the authority to expand or contract his team as per needs of startups, and track all data tracked by him for security. He will also have an authority to provide services such as content analysis, benchmarking and identification of gaps in regulations/laws as well as other issues regarding data security of startups.
9. Setting up a Data protection authority:
The Data protection authority will be set up in the next 3 months from the approval of this scheme. The data protection advisory committee will be set up within six months from the approval of this scheme. Both these structures are aimed at protecting and promoting privacy, data security and consumer rights for all startups in India.
The DIPP will work with incubators across the country to bring together a community connect program for startups, entrepreneurs and investors through online as well as offline platforms to enhance collaboration, awareness and attract funding towards them.
It is estimated that funding given under this scheme will be ₹10,000 crore over three years.
11. Setting up a fund of funds:
The Department of Financial Services will set up a fund in association with banks and financial institutions which will provide capital to startups in the country on an online platform.
An amount of ₹10,000 crore has been sanctioned for this initiative over three years.
The corpus will be utilized for infusion of equity to startups through a fund of funds and other financial institutions on priority basis after due diligence by the DIPP nominated incubators/ECOSYS/DIPP approved accelerators/incubation hubs/startup observatory. This fund will be run by a nodal officer appointed by the Department of Financial Services (DFS).