New Economy Youth Encouragement Start-up

1. Presentation by
Gopal Krishna Agarwal
Spokesperson of BJP on Economic Affairs
New Economy
Youth Encouragement
Start-up
1

2. New Economy….
• The new economy is based on innovation that disrupts established
business models. Artificial intelligence, internet of things, 3D printing,
drones, DNA data storage, quantum computing, etc.
• Data is the new oil and it is true that analytics, fintch and IoT are
changing the way we deal with our lives.
• Building data center parks throughout the country.
• Fiber-to the home (FTTH) connections through Bharatnet will link
100000 gram panchayats this year.
• Intellectual property creation and protection will play an important
role. A digital platform would be promoted that would facilitate
seamless application and cap true of IPRs.
2

3. New Economy
• Knowledge translation clusters would be set up.
• For designing fabrication and validation of proof of concept, and
further scaling up technology clusters, harbouring such test beds
and small scale manufacturing facilities would be established.
• Mapping of india’s genetic landscapes is critical for next generation
medicine, agriculture and for biodiversity management.
• Early life funding including a seed fund to support ideation and
development of early stage start-ups.
• Quantum technology is opening up new frontiers in computing,
communications, cybersecurity with widespread applications.
3

4. 4

5. Startup Innovation and Economy
• To overcome these challenges India must transfer itself from a
factor- driven to an innovation- driven economy by efficiently using
its existing resources to become a global innovation hub.
• To be successful in this endeavor, the country must bring about the
right institutional, industrial and policy reforms.
• A startup is a young enterprise founded by one or more
entrepreneurs in order to develop a unique product or service and
bring it to market. The first challenge for a startup is to prove the
validity of the concept to potential lenders and investors.
5

6. Startup India
6

7. ‘Business’ covered under the definition
• An aim to develop and commercialise
• A new product or service or process or
• A significantly improved existing product or service or process
that will create or add value for customers or workflow.
• The mere act of developing
• Product or services or processes which do not have potential for
commercialisation or
• Undifferentiated products or services or processes or
• Products or services or processes with no or limited incremental value
for customers or workflow would not be covered under the definition.
7

8. Conditions for eligible ‘Startup’
• The Startup should
• be supported by a recommendation (with regard to innovative
nature of business) in a format specified by DPIIT from an
incubator established in a post-graduate college in India or GoI.
• be supported by an incubator which is funded (in relation to the
project) from GOI as part of any specified scheme to promote
innovation or
8

9. Benefits to DPIIT recognised Startups
• Intellectual property rights related benefits.
• Relaxation in public procurement norms.
• Self certification under certain labour and environment laws.
• Finances from Fund of Funds for Startups(FFS).
• Faster exit.
• Income tax benefits.
9

10. 10

11. Tax Benefits for Startups
• Section 80IAC:Tax exemption for 3 consecutive years out of 10 years
since incorporation.
• Tax payable at the time of sale of shares by the employees (ESOP).
• Exemption from the provision of section 56(2)(viib) of the Income
Tax Act regarding investment above fair market value.
• Under the new Section 54EE in the Income Tax Act, 1961, startups
are exemption from tax on the long-term capital gain if such long-
term capital gain is invested in a fund notified by Central
Government.
11

12. Players of Startup Ecosystem
• Incubators
• Mentors
• Accelerators
• Investors
Seed capitalist
Angel Investor
Venture Capitalist
• Government Bodies
12

13. Incubators
• An incubator is a workspace created to offer early-stage Startups access
to all resources they need under one roof. They provide office space,
mentoring, business services, funding, and net work opportunities to
the incubatees.
• Mentor provides expert advice to the startup on its next steps.
Mentors
• Mentor has access to all registered startups across all stages on the
Hub. The startups may connect with him through a connection request.
• A startup is allowed to send 3 connection requests each week. This is
done by simply clicking on the “connect” button on the mentor’s
profile.
• Once the mentor accept a connection request, the startup can reach
out to him through a simple chat interface.
13

14. Accelerators
• Startup accelerators are generally fixed-term, group programmes
that include mentorship and training and may end in a public pitch
event or demo day. Accelerator programmes tend to work by
getting startups to apply for a three or four month scheme based
within the host company’s offices, during which time they receive
mentoring and guidance.
• One of the main differences between incubators and accelerators is
that accelerators are generally considered to be tailored to later
stage startups, whereas incubators are more suited to very early
stage business ideas. Therefore, accelerators are more focused on
providing help to scale up a fledgling business.
• The company may choose one or two startups to partner with. They
can also invest in them in return for a stake, or subsume the startup
into the host company. 14

15. Alternative Investment Funds (AIFs)
• As per existing SEBI classification, the private investment funds
(Indian or Foreign) have been divided into three categories –
Category I, Category II and Category III, with the minimum
qualifying corpus amount of Rs. 20 Crores. The only exception to
this rule is an ‘angel fund’, which is a subcategory of Category I AIFs,
as they have lower qualifying criteria in terms of fund corpus at Rs.
10 crores.
• Category I: Venture Capital Funds, Startup / Early stage funds,
Infrastructure funds –Such funds generally invest in start-ups or
early-stage ventures, social ventures, SMEs, infrastructure or other
sectors which are considered socially or economically important for
the country. These funds receive incentives or concessions by SEBI
or the government of India.
15

16. FFS
Fund of Funds for Start-ups (FFS) was unveiled by the Hon’ble Prime Minister on
the January 16, 2016 in line with the Start-up India Action Plan. It has approved
corpus of Rs 10,000 crore for contribution to various Alternative Investment
Funds (AIFs) registered with SEBI.
AIFs supported under FFS shall invest at least twice the contribution out of FFS, in
Startups as defined by Government of India.
Status of FFS as on June 30, 2019 is as below
16

17. 17

18. States’ Initiatives for Startups
• All states and UTs have initiated efforts in this regard by formulating
policies. Some states are offering additional benefits to DPIIT
recognised startups in their states such as:
• Seed grants at validation stage
• Land allotment at concessional rate/ reimbursement of stamp
duty and registration fee
• Reimbursement of GST on goods supplied
• Interest free loans
• performance grants
• Sustenance allowance/marketing allowance
• Patent filing assistance and cost reimbursement
• Recruitment assistance/ three shift operation
18

19. Startup in India
For the last couple of years, startups seemed synonymous with
Bengaluru, Delhi, Mumbai, and Hyderabad. And perhaps Chennai and
Pune.
But the fact is that entrepreneurs are innovating across India - from
Bhilwara to Shillong, Srinagar to Thanjavur, and everywhere in between
and beyond.
19

20. Atal Innovation Mission(AIM)
• AIM is Government of India’s flagship initiative to promote a culture of
innovation and entrepreneurship in the country. Five major initiatives
taken in first year of establishment:
• Atal Tinkering Labs-Creating problem solving mindset across schools in
India.
• Atal Incubation Centers-Fostering world class startups and adding a
new dimension to the incubator model.
• Atal New India Challenges-Fostering product innovations and aligning
them to the needs of various sectors/ministeries.
• Mentor India Campaign- A national Mentor network in collaboration
with public sector, corporates and institutions, to support all the
intiatives of the mission.
• Atal Community Innovation Center- To stimulate community centric
innovation and ideas in the unserved /underserved regions of the
country including Tier 2 and Tier 3 cities.
• ARISE-To stimulate innovation and research in the MSME industry.
20

21. Atal Tinkering Labs(ATLs)
• With a vision to ‘Cultivate one Million children in India as Neoteric
Innovators’, ATLs are being establised in schools across India to foster
curiosity, creativity and imagination in young minds.
• ATL would contain educational and learning ‘do it yourself’ kits and
equipment on – science, electronics, robotics, open source
microcontroller boards, sensors and 3D printers and computers. Other
desirable facilities include meeting rooms and video conferencing
facility.
• AIM will provide grant-in-aid of Rs. 20 Lakh to each school that
includes a one-time establishment cost of Rs. 10 lakh and operational
expenses of Rs. 10 lakh for a maximum period of 5 years to each ATL.
21

22. Atal Incubation Centre (AICs)
• AICs creates world class incubation facilities across various parts of
India with suitable physical infrastructure in terms of capital equipment
and operating facilities, coupled with the availability of sectoral experts
for mentoring the start-ups, business planning support, access to seed
capital, industry partners and training.
• AICs are established in subject specific areas such as manufacturing,
transport, energy, health, education, agriculture, water and sanitation
etc.
• Entities such as higher educational institutions, R&D institutes,
corporate sector, alternative investment funds registered with SEBI,
business accelerators, group of individuals, and individuals are eligible
to apply. The applicant would have to provide at least 10,000 sq. ft. of
ready-to-use, built-up space, for the exclusive use of the AIC.
• AIM will provide a grant-in-aid of upto Rs. 10 crore for a maximum
period of 5 years to cover the capital and operational expenditures to
establish the AIC. 22

23. Status Report under AIM
• 5441 Atal Tinkering Labs have been selected across the country,
out of which 2171 ATLs from 623 districts have already received
the first tranche of grant-in-aid for establishment of the labs in
their respective schools.
• 101 Atal Incubation Centres have been selected nationwide, out of
which 31 have received the first tranche of grants.
• As on date, more than 2,500 mentors are actively mentoring
students in over 1,300 ATL schools.
23

24. Unicorn
• In the venture capital industry, a unicorn refers to any tech startup
company that reaches a $1 billion dollar market value as
determined by private or public investment.
• India is home to the world’s third largest startup ecosystem, having
added over 1,300 tech startups in 2019
• This calendar year seems to be on track to beat 2018’s record-
breaking tally. Since the start of 2019, seven startups have reached
unicorn status already to take the total to 31 unicorns in India.
Here’s a sector-wise look at the unicorns.
• Number of Indian unicorns could increase to 95-105 by 2025, says
Nasscom president Debjani Ghosh.
24

25. INDIA AND GLOBAL INNOVATION INDEX
25

26. Measures to encourage youth…..
• Formulation and implementing plans for ensuring cleaner air in cities
above one million. Parameters for such incentives are to be notified.
• Early- life funding
• Direct all infrastructure agencies of the government to involve youth
power in start ups. Rolling out value added services in quality public
infrastructure for citizen.
• Allowed deduction of 100% of it’s the profit for three consecutive
assessment years out of seven years if the total turnover does not
exceed Rs 25 crore.
• Turnover limit is proposed to be increased from Rs 25 crore to 100
crore. Existing 7 to 10 years.
26

27. Measures to encourage youth
• Expand on the 58 lakh self-help groups
• Investment Clearness Cell
• National skill development agency will give special thrust to
infrastructure – focused skill development opportunities.
• New Education policy.
• External commercial borrowing and FDI so as to able to deliver
higher quality education.
• Urban local bodies across the country would provide internship
opportunities to fresh engineers.
• Degree level full- fledged online education programmers.
27

28. THANK YOU.
Contact me at : gopal.agarwal@bjp.org
Twitter : gopalkagarwal
28