Modi govt tweaks definition of start-ups, benefits to apply for up to 7 years
The amended start-up definition makes it easier for firms to avail of incentives and promote entrepreneurship under the Startup India scheme
New Delhi: The government on Thursday amended the definition of a start-up, making it easier for the business ventures to avail of incentives and promote entrepreneurship under the Start-up India scheme.
The department of industrial policy and promotion (DIPP), the nodal body for Start-up India, said in a statement that an entity shall now be considered a start-up up to seven years from the date of its incorporation/registration, taking into account the long gestation period in establishing start-ups. Currently, the period of consideration is five years.
However, in the case of start-ups in the biotechnology sector, the period will be up to 10 years from the date of incorporation/registration.
The DIPP statement said start-ups would no longer require a letter of recommendation from an incubator or an industry association for either recognition or tax benefits under Start-up India.
The scope of the definition of a start-up was also broadened to include scalability of business model with potential of employment generation or wealth creation.
“As a constant endeavour to facilitate the start-up ecosystem, the DIPP has been holding extensive consultations with stakeholders. The above changes are an effort to ensure ease of starting new businesses to promote the start-up ecosystem and build a nation of job creators, instead of job seekers,” the statement said.
Start-up India was launched by Prime Minister Narendra Modi on 16 January 2016 to nurture innovation and drive economic growth and employment opportunities.