While conducting your preliminary market research and competitor analysis for establishing your own startup, you are most likely to come across other startups with credentials like “DPIIT-recognized”.
If you are wondering what it is and believe that you also need to apply for such recognition for your startup, then here is a simplified explanation of the Startup India Scheme and how prospective it is for new startups, provided by MPVD & Associates, a prominent CA firm in Kolkata.
DPIIT stands for Department for Promotion of Industry and Internal Trade. It is a division of the Ministry of Commerce and Industry that initiated the Startup India Seed Fund Scheme (SISFS) in 2016, with the support of the Government of India, in a bid to transform the entrepreneurial ecosystem in India to nurture innovation and support the growth of startups.
Aims of the Startup India Scheme
The Startup India initiative, started by Indian Prime Minister Narendra Modi, aims to advance India’s position in the Global Ease of Doing Business Index (EoDB index) by enhancing the nation’s startup ecosystem and general entrepreneurship-oriented culture. By offering over 30 state government policy initiatives as benefits for Indian businesses, the Startup India Scheme contributes to the creation of hundreds of thousands of jobs around the nation.
What Does The Startup India Scheme Offer?
With better procedures, recognition, legislation, funding, and contemporary business models, Startup India has been successful in inspiring Indians to think that creating a startup is within their reach.
It is evident from the data in Inc42’s State of the Tech Startup Ecosystem Report 2018, which mentions India as having generated $130 billion in value and producing 26 unicorns and more than 31 soonicorns from India. The Startup India scheme offers several benefits and policies to empower this proliferation even more. Below are some of the core offerings of the scheme:
- Self-certification: Through an easy online process, qualifying firms participating in the Startup India program can certify that they are in compliance with various labor and environmental standards. This increases the ease of doing business and lessens the regulatory load on startups.
- Tax advantages: For the first three years of operation, startups are not required to pay income taxes, which helps them save money and use it towards expansion. With the help of professional accounting & taxation services, they can seek greater tax advantages and relief from the government.
- Funding: The government has established a number of funds to offer money to entrepreneurs at various stages of development, including debt financing, venture capital, and seed funding.
- Intellectual property protection: To protect their discoveries and encourage entrepreneurship, startups can benefit from fast-track evaluation of their patent applications and up to 80% off of patent filing fees.
- The Startup Hub: A single point of contact for startups to get advice, support, and information on different aspects of launching and operating a business is the Startup India Hub. A variety of tools are available through the Startup India Hub, including a learning and development program, networking opportunities, and access to funding and mentorship.
Indian entrepreneurship policies are largely influenced by Anglo-Saxon models, with major contributions from researchers affiliated with the United States (US) and the European Union. This creates a certain gap in the overall ecosystem and mindset towards new innovations, where unique startup ideas fail in the hands of native perception. The Startup India scheme aims to close this gap by streamlining India’s entrepreneurship promotion policy and providing strategic resources to nurture innovation and support the growth of startups.
What Makes A Startup and What Makes A Startup Eligible to Apply for Startup India Benefits
What is a startup in the eyes of the DPIIT?
Startups need to meet certain eligibility criteria in order to get the benefits entitled under the Startup India Scheme. The application process is simple and can be completed online through the Startup India portal. The edibility criteria are listed below:
- Certification: The Indian Department for Promotion of Industry and Internal Trade (DPIIT) should have given the startup a certification.
- Age of the Entity: The startup must have been formed or registered no more than ten years ago.
- Type of the Entity: The startup must be registered as a limited liability partnership (LLP), a private limited company, or a partnership firm.
- Turnover: In any of the startup’s prior fiscal years, its turnover should not have exceeded Rs. 100 crore (about $13.5 million USD).
- Concepts & Innovation: The startup must have a business concept based on the creation, introduction, or commercialization of a novel good, procedure, or service that is fueled by technology or intellectual property.
Do you want to know if your startup qualifies for DPIIT recognition or Startup India Seed Funding? Why don’t you talk to us at MPVD & Associates?
MPVD & Associates has been helping startups with tailored accounting & taxation services and compliance solutions that make them tick all the boxes for Startup India Scheme eligibility. We have seen several of our clients get their entity DPIIT recognition and reap the benefits; we can do this for your startup as well. Even if you have only conceived the idea of a startup, you can talk to us and learn more about business prospects from market experts.