Start-up India Action Plan – An overview

001On January 16, 2016 the Prime Minister of India launched the ‘Start-up India action plan’ in an event organized by DIPP (Department of Industry Policy and Promotion) to empower Start-ups to grow through innovation and design. The action plan is an initiative of the Government to address all aspects of the Start-up ecosystem and to encourage entrepreneurship, create new employment opportunities and also restrict the role of state and facilitate ease of doing business.


Below are the criteria to be fulfilled by an entity to consider them as Start-up:

  • It should be Private Limited Company (Under The Companies Act, 2013); or Registered Partnership Firm (under The Indian Partnership Act, 1932); or Limited Liability Partnership (under The Limited Liability Partnership Act, 2008)
  • It should not be incorporated prior to 5 years and should not have annual turnover more than 25 Cr.
  • It should be involved in production and commercialization of innovative products or processes and it should also create or add value for customers or workflow
  • It should have DIPP approval certifying that the entity is involved in innovative products/processes;


The action plan covers the following areas for providing assistance to the start-ups ensuring their streamlined growth:

  1. Simplification and handholding to simplify the process and associated laws
  • Compliance related to labour and environments laws will be allowed on self-certification basis so that the Start-ups can focus on their core business;
  • No inspection under labour laws for a period of 3 years;
  • Setting up “Start-up India hub” to enable single point of contact with the Government and also to facilitate knowledge exchange and access to financial support;
  • Launch of Mobile app from April 01, 2016 to simplify Start-up registration;
  • Start-up Intellectual Property Protection (SIPP) scheme to provide legal support for filing patents, trademarks and industrial designs application and also to fast-track the patent application;
  • Exemption from the criteria of “prior experience/ turnover” in public procurement;
  • Provision of faster exits (within 90 days) for failed ventures under the Bankruptcy and Insolvency Bill, 2015.


     2.  Funding support and Incentives

  • To provide financial support up to Rs. 10,000 crore over a period of 4 years;
  • Providing credit to innovators across all sections of society to catalyse entrepreneurship;
  • Capital gain exemption towards investment in start-up ecosystem;
  • Income Tax exemption on profits for 3 years subject to non-distribution of dividend by the Start-ups. The Start-up shall be eligible for tax benefit only after it has obtained certification from the Inter-Ministerial Board;
  • Tax exemption on any investments made above Fair Market Value


     3. Industry-Academia Partnership and Incubation

  • Organizing start-up fests to energize the Start-up Ecosystem and to provide National and International visibility to the Start-up ecosystem;
  • Launch of Atal Innovation Mission (AIM) to promote entrepreneurship through Self-Employment and Talent Utilization (SETU) program to encourage innovation and inspire youth;
  • Setting 35 new incubators in existing institutions with funding support of 40% (max. of INR 10 Cr) and also 35 new private sector incubators with a grant of 50% (max 10 Cr) based on public-private partnership model to ensure professional management;
  • Building 13 Start-up Centres and 18 Technology Business Incubators (TBI) at National Institutes to enhance incubation and R&D efforts;
  • Setting 7 New Research Parks including six in IITs and one in IISc with an initial investment of 100 Cr. each;
  • Constituting 5 new Bio-clusters, 50 new Bio-incubators, 150 Technology transfer offices and 2- Bio-connect offices in Research Institutes and Universities to encourage and facilitate around 2000 Start-ups by 2020 in the Biotechnology Sector;
  • Launching innovation focussed programme such as Innovation Core to target school kids with an outreach to 10 Lakh innovations from 5 lakh schools; Nidhi (National Initiative for Developing and Harnessing Innovations) instituted through Innovation and Entrepreneurship Development Centres (IEDCs) to support and award 10 lakhs to 20 students’ innovation; Uchhattar Avishkar Yojana which is a MHRD-DST scheme to provide 250 Cr per annum towards fostering very high quality research amongst IIT students.

The action plan is undoubtedly a promising instrument and can flourish Indian economy vastly.

The detailed action plan is accessible at:


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