Using AIF regulations to start up India
The next phase of start-up funding can be kick-started by using Alternative Investment Fund regulations to their advantage
On 16 January 2016 Prime Minister Narendra Modi launched “Startup India", a scheme targeted at building a strong ecosystem to nurture innovation and start-ups in the country. A year on, it is a good time to assess how it has performed. Broadly speaking, the scheme consisted of four types of incentives. The first was to reduce the compliance burden for start-ups by allowing self-certification, removing inspections for the first three years and simplifying the intellectual property rights (IPR) regime. The second was to give tax incentives by removing income tax on profits for the first three years and exempting personal property sold to invest in a start-up from capital gains tax. The third was to provide infrastructure support by setting up 500 tinkering labs, 35 public-private incubators and 31 innovation centres at national institutes. The fourth, and most important, was to provide funding via a dedicated fund of Rs10,000 crore to promote start-ups.