In a major move, Govt. of India has decided to compel startups to declare how many jobs will they create, before taking benefits and subsidies under Start Up India program.
Hence, benefits related with Startup India would be now directly linked with the number of jobs which that startups will create in future.
A senior Govt. official said, “We will soon notify the new definition for startups, which goes beyond innovation,”
Under Startup India program, companies can take benefits related to tax holidays, swift patent approvals, relaxation on FDI and more.
In case startups are required to declare job creation estimations for availing benefits under Startup India, then it may create a mini chaos, especially within tech-oriented startups.
Until and unless the idea and the plan has been implemented, and traction recorded, it will become tough for startups to estimate how many jobs are created. If the startup is in the traditional domain, then things can be different.
Startup India – Developments Till Now
Department of Industrial Policy and Promotion (DIPP), which is managing Startup India program, has till date, recognised only 798 startups, which actually eligible to be called as a startup, as per definition prescribed by them.
out of that, only 10 startups are eligible for tax benefits, which is actually a low number.
And now, on top of that, they will be required to estimate the number of job creations as well, which will make the whole process even harder.
As per Govt. estimates, startups has the potential to create as much as 250,000 jobs in India, and currently, out of the ‘recognized’ startups, around 80,000 jobs have been created.
Last year, Govt. created extensive guidelines and rules for defining what exactly a startup is; and prominent among them is the rule that the company should be incorporated after March 31, 2016, and should have annual revenues of less than Rs 25 crore.
Among other measures, DIPP has planned to launch dedicated portal for startup registration, has amended patent rules and made the process cheaper, and a continued process to lower taxes, which has excited VCs and entrepreneurs in India.
Here are the key highlights from the action plan of Startup India program.
Do you think Govt. has made a right decision by asking startups to declare job estimations before availing benefits of Startup India program?