PM Modi announces big push for start-ups

“I had spoken about ‘Startup India’ from the Red Fort and today we are seeing what this is all about. We are here so that you can tell us what we should not do,” the Prime Minister said at an event in New Delhi on Saturday.

Unveiling a slew of incentives to boost start-up businesses, he offered them a tax holiday and inspector raj-free regime for three years, capital gains tax exemption and Rs 10,000 crore corpus to fund them.

He also announced a self-certification scheme in respect of nine labour and environment laws and said there will be no inspection during the first three years of launch of the venture.

Also, a liberalised patent regime is being brought to help start-up businesses register patents, for which the fee will be slashed by 80 per cent.

Addressing the first conference of start-up entrepreneurs, Modi announced an action plan to boost such ventures which are seen as key to employment generation and wealth creation.

India, which has the third-largest number of start-ups globally, will also support the ventures by removing the criteria of experience and turnover for bagging government procurement contracts.

Modi said profits earned by start-ups will be exempted from payment of income tax during the first three years of business. To boost financing, a 20 per cent tax on capital gains made on investments by entrepreneurs after selling own assets as well as government-recognised venture capitalists will also be exempt.

He further said an unencumbered easy exit option will be provided under the bankruptcy Act so that start-ups can exit within 90 days.

Lauding the intellectual capital that the country has today, Modi said: “When I was listening to Ritesh (Founder, Oyo Rooms) I wondered why a ‘chai wala’ did not think of starting a hotel chain.”

He added: “Ideas are many but some leave the idea halfway while others get very involved in the idea. But today when those people have become successful, everyone has started thinking about ways to start their own start-ups. People who have achieved this success today, they are not just entrepreneurs but are adventurous as well. Success of entrepreneurs depends on their ability to take risk. That’s how Uber became Kuber.”

The Prime Minister also praised the efforts of entrepreneurs in the country saying, “Sometimes I wish God had given me capabilities like you people have.”

Earlier, Union Finance Minister Arun Jaitley also spoke at the inaugural session of the day-long event where he highlighted Modi government’s efforts to promote start-ups in the country.