Prime Minister Narendra Modi launched the Startup India program last year in January. The main purpose of starting this initiative was to create employment opportunities for the youth. At that time, it was not mandatory for the Startup companies to provide any details about how many jobs will be created. But, now the Indian Government will ask the companies to issue details regarding the job opportunities that will be created for the youth and only then the companies can avail benefits of the Startup India scheme.
According to a Senior Government Official,
“We will soon notify the new definition for startups, which goes beyond innovation. Innovation is currently the main criterion for start-ups to qualify for benefits such as tax holidays and fast-track patent filing under Startup India. To qualify as a startup under the new definition, an entity would have to declare its job creation target and meet certain financial standards besides having a certain level of innovation in its product or service. We will do our own scrutiny at the time of examination of applications for giving the tax benefits.”
Going by the statistics, Department of Industrial Policy (DIPP) has accepted 798 applications but not all of them were fortunate to get the tax rebate. This is because; the inter-ministerial board approved only ten startup companies out of all the submitted applications to get the tax relaxation. Although, companies which were incorporated post 31st March 2016, are granted a 3-year tax claim in their first 7 years under the Startup India Scheme.
Further relaxing the norms and considering the longer gestation period of the biotechnology and medical devices firm, DIPP is also increasing the maximum age from the current five years to 8-10 years. As per the recent reports from the research agency Nasscom, currently, the startups are giving employment to 80,000 people in India. However, the number of employed people is expected to rise by almost 2,50,000 by 2020 in India.