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A new definition of ‘startup’ to spur the innovation, wait till 16th Jan

Start Up India, Stand Up India which will be announced on January 16 by PM Modi, the government will probably come up with a strict of very precise definition of ‘startup’ to make sure that benefits go to companies that are engaged in innovation.

Probably, the new definition may exclude entities formed by simply splitting or businesses that are in business for 5 years and exceed 25 crore of sales.

Those entities that fit the description will be eligible for simplified compliance rules and also tax incentives. Such startups have not only to exhibit innovation but they also have to be engaged in the development, deployment or commercialization of new products driven by intellectual property, as per the government officials.

The startup event is attended by more than top 40 CEOs, venture capitalists, and angel investors from Silicon Valley. The government is keen on creating an startup ecosystem which will spur the innovation and create employment.

Start Up India, Stand UP India initiative hosted by the Department of Industrial Policy & Promotion (DIPP), also plans to introduce several checks and balances to filter out the desired results. The draft has been made after consultations with top industry executives. The startup proposals would have to be supported by recommendations from an incubator or funded by incubation, angel or private equity funds regeistered with capital market regulator or DIPP.

There will be also a negative list of businesses that won’t be eligible under this initiative.

Source: ET

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