Quick Implementation is Key to Startup India Action Plan's Success In order to create a positive impact, the conditions need to be simple and the process has to be quick.
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The Indian economy has been abuzz with a growing number of entrepreneurs from all walks of life launching startups across industry verticals.
According to a recent NASSCOM report, the Indian startup ecosystem attracted investments worth $15 billion in 2015. As per this report, three to four startups are emerging every day in India, which have collectively taken India to the third position in the world in terms of number of startups.
With more than 4,200 startups in 2015, there was a growth of 40 per cent in the sheer number of ventures started over the past year.
However, one of the biggest challenges faced by a startup in India, besides getting funding, is to manage the various compliances and processes required in the initial stages of setting up the venture.
This becomes a challenge from the perspective of tedious procedures that a startup is required to go through, from registering the company to ensuring compliance with various laws.
The Indian Government, however, has formally acknowledged the startup boom in the country and announced the Startup India Action Plan on 16 January 2016.
The industry has praised the government initiative in this direction calling it a very strategic approach towards addressing the challenges faced by Indian startups. It address challenges at three key stages of starting up a venture – Funding for the venture, setting up the company and carrying out the business.
Most startups face difficulties in arranging capital or funds in the initial stages of the venture. In order to address this crucial business need, the government, under the Startup India Action Plan, has announced a startup fund of Rs10,000 crore.
On the other hand, exemption from income tax and capital tax will provide much needed tax break to the startups in their initial three years. Additionally, announcements related to easing the patent registration processes and labor law enforcement can add to the ease of doing business in the initial phases for startups.
Through this initiative, the government is not just trying to make the ecosystem right for startups to flourish, but is also putting efforts to create an entrepreneurial culture from the grass-root level through the programs under the Atal Innovation Mission.
The mission's focus on imbibing an entrepreneurship-focused culture among students in schools and universities is a very admirable concept. This mission, once implemented well, has the potential to impact not just the current ecosystem but the future of the country's economy.
While the initiative is a very encouraging and promising move by the government, effective implementation is crucial in order to impact the sector positively. It will be very important to see how startups are defined and the various qualification criteria for these benefits.
In order to create a positive impact, the conditions need to be simple and the process has to be quick. In absence of either of these, the potential of such a great move will be lost in the process.
However, having said that, it is a very positive sign that the government has given out to the startups and budding entrepreneurs.
This is not just going to help startups feel more confident of starting a new venture, but will also benefit by increasing investor's confidence in the market. It will not be wrong to say that the future looks very promising with the unlimited possibilities of new and innovative ventures revolutionizing the market with their unique offerings.