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Action Plan for Start-Ups

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June 13, 2017

What is the issue?

  • A year ago, the government launched its ambitious initiative for start-ups with an action plan containing 19 measures.
  • However, the government’s initiative has had an impact on only a small section of start-ups.

What should be done?

  • Self-Certification - To facilitate ease of doing business, the government promised a compliance regime based on self-certification.
  • It issued an advisory to states, union territories, EPFO and Employees’ State Insurance Corporation offices not to inspect start-ups in the first year of set-up and, for the next three years, only with the approval of a senior officer.
  • So far, only 12 states have confirmed compliance with the advisory.
  • IPR - A fast-track, low-cost intellectual property regime was promised.
  • Now, a list of more than 400 empanelled patent and trademark registration agents is published, and the government is supposed to pay them for services to recognized start-ups.
  • However, there are only 1,006 such recognized start-ups that enjoy these benefits.
  • Innovation - All start-ups, regardless of whether they are considered innovative by the government, should be able to enjoy these benefits.
  • The government should not get into defining and deciding what innovation means.
  • Closure - A critical measure to enable start-ups which could go on to fail is the ease of closure.
  • The rules for voluntary liquidation are still in the works.
  • They should be released and notified soon permitting start-ups to wind up business within 90 days.
  • Government Procurement - The government is a huge buyer of goods.
  • So central ministries and departments should be directed to relax the turnover and experience criteria for public procurement, so as to promote purchases from start-ups.
  • The government instituted a Rs.10,000 crore fund-of-funds.
  • So far, there have been only limited disbursements compared to the nearly Rs.16,000 crore start-up funding in 2016.
  • Also, the details of the promised credit guarantee fund for start-ups are not out yet.
  • Tax – An exemption from “angel tax” was announced.
  • But so far only 13 start-ups have been certified for such tax benefits.

 

Source: Livemint

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