As startups continue to expand in the country, the government hasn’t forgotten to look into the bubble that’s growing rapidly—it is working on a ‘new policy’ that will focus on promoting innovation and tax incentives to small unlisted startups.
According to government sources that talked to Livemint, the government is looking to build an ‘entire ecosystem’ for startups and not just incentives. The policies yet to be formulated will address issues like ‘ease of doing business’, compliance and exits, the source added.
But, the policy would first have to define what a startup means to the government; Minister of state for finance, Jayant Singha will hold an inter-ministerial meeting today along with several tech entrepreneurs to come up with a clear definition.
“The definition is important to understand who will come under the ambit of the policy,” the government official said.
The Department of Industrial Policy and Promotion (DIPP) is expected to come out with a definition by January, and will be unveiled by PM Modi.
‘Startups Shouldn’t Be Limited To A Singular Definition’
Sharad Sharma. Co-founder of iSpirt believes that the policy is being formulated to ‘stop the exodus of Indian startups’ to foreign countries like Singapore and US. He further stressed that government shouldn’t have a ‘singular definition’ for startups.
“Having one definition can be complicated. Defining eligibility criteria for benefits, such as incubation facility, easy labour laws, help in applying patents may be more useful,” he added.
While the government source said that the policy will focus on “manufacturing and innovation” to ensure that “someone opening a flour mill cannot claim benefits”. “Listed firms will not be eligible for benefits under the policy,” the source added.
“We have a good idea about the requirements of start-ups. A final decision on the incentives will be taken by the prime minister’s office and the cabinet,” the official added. [Source]
Note: The government was under fire, while the world media took the case global when DeitY drafted a National Encryption Policy that mandated citizens & businesses to keep data unencrypted for at least 90 days.
They had forgotten to exempt social media and e-commerce services, which they later did, but faced massive criticism by netizens in India and abroad. The policy was withdrawn sooner by the DeitY after the setbacks.