India is gradually moving towards the startup ecosystem. Therefore, in order to boost entrepreneurship, Government has created an entire ministry dedicated to helping new businesses. These are the few initiatives the government has taken to boost startup culture in India –
The government has made continuous efforts to improve social and economic life in rural areas of India. Since 56% of the Indian population lives in rural areas, the government is promoting entrepreneurship and innovation in this area. The scheme, ASPIRE aims at increasing employment, reducing poverty and improving innovation in rural India. However, the main idea is to promote the agro-business Industry. The Ministry of Medium and Small Enterprises has tried to get economic development at the grassroots level. The total budget plan is of Rs. 62.5 crores for the years 2014-2016.
Micro Units Development Refinance Agency(MUDRA) Bank has been created to enhance credit facility to boost the growth of small business in rural areas. In 2015, the government allocated 10,000 crores to promote start-up culture in the country. The MUDRA banks provides loans for Rs. 10 lakh to small enterprises which are non-corporate, non-farm small/micro enterprises. It comes under Pradhan Mantri Mudra Yojana(PMMY) which was launched on 8th April 2015. The loans have been categorized into Tarun, Kishore, and Shishu. The assets are created through the bank’s finance and there is no collateral security.
Ministry Of Skill Development and Entrepreneurship
This task of promoting entrepreneurship was earlier given to different departments and government agencies. In 2014, Prime Minister decided to dedicate an entire ministry to build this sector as he feels that skill development requires more tension from the government side to promote and encourage them among the people. Furthermore, the idea is to reach 500 million people by the year 2022, by providing gap funding and skill development initiatives.
Atal Innovation Mission
In the budget of 2015, the government established the Atal Innovation Mission (AIM), while the name is coming from Former Prime Minister of India Atal Bihari Vajpayee. The Atal Innovation Mission was established to provide innovation promotional platform involving academicians, and drawing upon national and international experiences to foster a culture of innovation, research, and development. The government allocated AIM about Rs. 150 crores in the year 2015.
The government launched first electronic government to business(G2B) portal. The main purpose is to transform and develop a conducive business environment in the country. The portal was developed by Infosys in a public-private partnership model. It Is a communication centre for investors and the business community in India. It has launched 29 services in 5 states – Andhra Pradesh, Delhi, Haryana, Maharashtra, and Tamil Nadu. The government will add more services in the future.
Start-up India Initiative
In January 2016, Prime Minister of India launched Start-up India Initiative. It changed the definition of a start-up in terms of the scale and the horizon. The idea is to increase wealth and employability through increasing entrepreneurial spirit. They have given start-ups tax benefit under this scheme and 798 applicants have got the benefit of the tax break. The Department of Industrial Policy and Promotion has taken up this initiative and is working on this project. Moreover, the overall age limit for start-ups has increased from two years to seven years. And for biotechnology firms, the age limit is ten years from the date of incorporation now.
With elections around the corner, the government will promote these initiatives further not only to increase the number of people who are getting the benefits from them but also to highlight the work they have done in the last 5 years.