Indian Govt Wants To Define Exactly ‘What Is A Startup’ Before Launching ‘Startup India Standup India’ Program
Ironical it may seem, but Indian Government is still in doubt over the term ‘Startup’.
In fact, in the last few years, especially after the massive explosion of Internet, Smart phones and Technology, there has been a surge in new companies been formed, new ideas been spread and existing multi-nationals diversifying into newer tech.
This has led to ambiguity and confusion regarding the term ‘startup’, and Indian Govt. wants to clear this doubt.
Before ‘Startup India Standup India’ program is launched on January 16th, Government wants to clearly define what exactly is a startup, and wants to understand which companies can be categorized under this definition.
As per reports coming in, those companies which have been formed after splitting up from an existing corporation or the ones which are in existence since 5 years and exceed Rs 25 crore in annual will NOT be defined as a startup.
Additionally, the companies which has been formed under Government sponsored incubators, and/or formed via special schemes created by Govt. will also be excluded from the advantages proposed under ‘Startup India Standup India’ program.
This may seem discouraging for those companies which may have availed small assistance from the Govt. in the past or those which have been slogging for the last 5 years, but still have less traction and less visibility.
Startup India Standup India: Will It Redefine Entrepreneurship In India?
In his August 15th speech, PM Modi had declared that Indian Govt. will soon launch a special program to help and assist startups in the country. A special fund of funds was promised, along with several other benefits.
On January 16th, this program would be officially launched by Finance Minister Arun Jaitley in Delhi. Around 1500 entrepreneurs, mentors, investors have been invited for this event; and some of the chief guests announced so far include: Masayoshi Son (Founder and CEO, SoftBank), Travis Kalanick (Founder, Uber) and Adam Nuemann (Founder, WeWork).
A delegation of 40 entrepreneurs and policy makers has been created, who will take part in various Q&A sessions, along with answering direct questions from the attendees.
Under ‘Standup India’ vision, a special corpus of funds would be allocated to women and SC entrepreneurs, who wish to startup. The cabinet has just passed a budget of Rs 8000 crore which would be dedicated to provide loans for this special category of entrepreneurs.
Out of Rs 8000 crore, Rs 3,000 crore under MUDRA Credit Guarantee Fund (CGF) will be used to act like a hedge fund against default of Rs 50,000 to Rs 10 lakh loan given to small entrepreneurs.
And, Rs 5,000 crore Stand Up India CGF will stand guarantee for Rs 10 lakh to Rs 1 crore loans which has been planned to push 2.5 lakh SC, ST and Women Entrepreneurs.
Interestingly, the ‘Startup India Standup India’ launch program will invite SoftBank CEO, but in terms of FDI in B2C ecommerce, Government is still in dilemma.
Besides ‘definition of startups’, we also need a major revamp in policy framework, a cultural, educational change in how we teach entrepreneurship to our children and massive infrastructural push for supporting technology and innovation.
We hope ‘Startup India Standup India’ is able to fulfill that. We will keep you updated as more details come in.