The startup culture has been revolutionizing the ways traditional businesses operate in India for some time now. From Ola, changing the way we use taxis, to Zomato, transforming the way we view food, the startups of today are simplifying processes that used to be roadblocks for the middle class. But, the path to establishing these startups was a pain in the neck for the founders due to the red tape of bureaucracy strangling the innovative ideas through laborious paper works and devious rules and regulations. In such a scenario, the Government of Indiaâ€™s Startup India Mission comes as a ray of hope.
Prime Minister Modiâ€™s Startup India Mission, aims to reduce the roadblocks faced by startups in establishing and patenting their ideas, by providing various schemes such as single window clearance for setting up of company, 80% reduction in patent fees, freedom from tax on profits for 3 years etc. thus eliminating the red tape surrounding the initiation of a company. Furthermore, by setting up of Atal Incubation Centre (AIC), the fledgling startups would be provided with a secure environment where they would be able to test their product before launching it in the market.
One of the major changes is the ease of exit for startups. What earlier constituted as a long drawn regulatory and legal battle, preventing the founder of a startup from dusting himself and getting back again with a new vision, has now been converted into an easier option with the introduction of Insolvency and Bankruptcy Code. Another important facet of the Startup India mission is the absence of government inspection for three years, allowing the founders to focus more on their startups rather than completing documents.
Startup India seems all hunky dory till now. But it comes with a caution tag attached to it.
The eligibility criteria defined by the policy which states that the startup has to be innovative and work towards developing, deploying or commercializing new products, processes and services driven by technology or intellectual property has excluded most of the budding startups in the country. This is primarily due to its lack of clarity regarding the level of innovativeness required for qualification.
Setting up of incubators is a good idea, but only if they are staffed with mentors who are capable of giving form to the ideas of the incubates. Also, the government would have to come with strict guidelines for these incubators so that they do not become just another money minting business but a facility that actually supports the development of a startup.
The foundation which has been laid by the Government of India, has given reasons to cheer for the startup community. But it is the future, where the final policies would be implemented that holds the key for a robust startup economy. The Government would have to strike the right balance between making the business accountable and transparent, while giving them the freedom to express their creativity.