Towards the Goal of India Becoming a Global Start-up Hub

“India’s own ecosystem of start-ups is evolving rapidly. It is driven by the energy, enterprise and innovation of our youth

-Prime Minister Narendra Modi

The government led by PM Narendra Modi has been continuously working towards making India a global hub start-ups right from its first term. A dedicated programme for start-ups was started by the Modi government, as is well known as Startup India.

PM Modi had himself praised the broad-based trend of the rise of start-ups, especially those with women at the helm or those emerging from tier-2 and tier-3 cities.

In its second term too, a number of decisions have been taken to realise this vision of making India a force to reckon with in the global start-up ecosystem.

Angel Tax Abolished

As part of the 2019-2020 Union Budget, the government announced rolling back of angel tax for start-ups. The Modi government announced that start-ups who file all requisite declarations will not be subjected to any kind of scrutiny on valuation. This will not only unshackle angel investing for start-ups but also bring in domestic investment for them and will make them globally competitive.

Cut in Corporate Taxes

The Modi government in a landmark move has brought down the corporate tax rate to 15% for new domestic manufacturing companies. This reform places India’s corporate taxation structure at par with some of the world’s best economies to do business in and sets India on the right growth trajectory like never before.  Other than increasing the inflow of capital in the Indian start-up ecosystem, this will also lead to creation of employment opportunities and provide impetus to India’s manufacturing sector.

Rural Start-ups Incubation

In 2019-20, under the Modi government's flagship rural entrepreneurship focused ASPIRE Scheme (A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship), 80 livelihood business incubators and 20 technology business incubators will be set up to produce 75,000 skilled entrepreneurs in agro-rural industries. Apart from serving as a hub to create the next-gen of entrepreneurs and start-ups in India, these incubators will also help transform the rural agricultural economy and boost agro-rural industry.

Start-Up TV Channel Launched

A new TV channel exclusively for promoting start-ups will be set up by the Government. This announcement which was made during the 2019 Budget is aimed at nurturing and supporting start-up activity in the country and will be designed and managed by start-ups themselves. The channel will promote new businesses and enable matchmaking with venture capitalists. Aside from funding, the channel will also provide resources for tax planning. In the world’s third-largest start-up ecosystem, this could be a great way to raise awareness about entrepreneurship among youth in smaller towns and cities.

MeitY Startup Hub

Ministry of Electronics and Information Technology set up the MeitY start-up hub in October 2019 in order to facilitate PM Modi’s vision of promoting technology innovation, start-ups and creation of intellectual property. The event brought together many industry leaders, government officials, entrepreneurs and venture capitalists under one roof to discuss how regulators can boost the start-up ecosystem in the country. The platform lists start-ups according to their area of expertise or the state they belong to, and will act as a facilitator to bring together all existing programmes and connect start-ups to the right talent, mentor or VC fund.

Initiatives like these are already creating a fertile ground for start-ups to grow in India with India being declared as among the top start-up ecosystems in the world to producing more and more unicorn start-ups valued at $1 billion and higher every day.

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