Modi government to give a boost to the startup environment via the Startup Act

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Narendra Modi government has been an encouraging force for the startups that are mushrooming in the country. It has been steadily trying to simplify the rules & regulations so that new, budding entrepreneurs with brilliant ideas can give a free rein to their talent and in turn help the economy of India to grow. More jobs will be created and this will further help in the country’s growth.


Right now, the process of compliances comes under the wide umbrella of 22 diverse laws, hence, making the process quite tedious. The government aims to condense the whole procedure in to a 2-page Startup Act.

This will be immensely beneficial for both big and small entrepreneurs who wish to live their dreams and establish a successful startup. The Department of Industrial Policy and Promotion (DIPP) is working towards it.

A lot of young entrepreneurs who want to begin a business are held back due to the mesh of regulations. This hampers the rapid growth of the startup environment which is otherwise possible with many people now willing to take the risk of running a business.

If the government is able to find a way around the multiple laws and outline a single legislation, the robust environment that India provides to startups of every type will receive a further boost up. India is the fourth biggest startup base in the world and this is set to be even better in the coming days.

During the Independence day speech, Prime Minister Modi had talked about his ‘Startup India, Stand Up India’ initiative which will make India a flourishing ground to explore entrepreneurship. Moreover, these startups will create numerous jobs. A Nasscom report says that Indian startups may create around 2,50,000 jobs by 2020. Right now, it is around 80,000.

The Department of Industrial Policy and Promotion wants the new initiatives to benefit only the startups that have disruptive, brilliant and innovative ideas so that not every organization can take undue advantage of it.

The organizations that will be eligible are likely to be less than five years old and should conform to financial norms. The aim of this Startup Act is to help these new organizations to set up a base in the country and this will include tax incentives too.

In India, basic registration and administrative processes can be daunting to a new-fangled young entrepreneur who is just starting off. The latest policy will ease out various processes related to Foreign Exchange Management Act documentation, employee stock options, incorporation, funding, etc.

Dealing with the maze of regulations will become a walk in the park with this new Act even for entrepreneurs who do not want to take external help of a professional. Fund raising will become easier if the compliances are in place.

DIPP also discussed its plans with the heads of various well-known startups like SoftBank, Snapdeal, Oyo Room, etc. Also, former Infosys director, Mohandas Pai was part of the discussion.

How this central law takes shape remains to be seen. Municipal and state regulations will be same and the new policy might ask the startups to get clearance for particular things at the state or municipal level.

Furthermore, every state needs to have a complete list of permits to enable the setting up of a new business. Nonetheless, the hope of making it easier for new startups to find a ground in India with a centralized Act will surely lead to a pleasant economic climate.

Priyannkaa Dey

Written By

With around five years of editorial and writing experience from magazines such as ‘DataQuest’, ‘Leisure & Resorts’, ‘Voice&Data’; Priyanka has also worked in the digital communication department of organizations like ‘Brentwoods’; ‘n & n Chopra Consultants Pvt. Ltd’ and ‘Delhi Public School Greater Faridabad’. Her interests include blog reading and writing. The author is a senior sub-editor at 'Entrepreneur Online' and has completed her studies from Jamia Millia Islamia.