Plan to include msm es in startup definition

1. Plan to Include MSMEs
in Startup Definition
DIPP's move will help govt decide which companies can
draw benefits of any scheme for startups and push
manufacturing to create more jobs

2. Contd…
The government is considering a proposal to include micro, small and medium
enterprises (MSMEs) in its definition of startups to help boost the Make in India
campaign. Various government departments have held a series of brainstorming
sessions to discuss the definition so that the policy can be formalised. A clear
definition is imperative for the government to decide which companies can draw
the benefits of any scheme for startups.
The Department of Industrial Policy and Promotion (DIPP) is spearheading the
exercise of formulating the startup policy, along with ministries such as finance, skill
development and MSME among others. The Start-Up India initiative is scheduled to
be announced by Prime Minister Narendra Modi in January 2016 and the policy
needs to be finalised by then. Progress on the initiative is being monitored directly
by the Prime Minister's Office. India wants to create an ecosystem that encourages
entrepreneurship and is collecting suggestions from the startup community for
steps that need to be taken to ensure that the Start-Up India initiative is a success.

3. Contd…
Including MSMEs, collectively one of the biggest employers of people in India, is seen as
positive for manufacturing and therefore employment generation, key aims of the Make in
India programme. Officials are also discussing specific criteria that would make an MSME
eligible to be called a startup. This would determine eligibility for incentives such as fewer
compliance conditions, cheaper credit and tax benefits.
“Defining (startups) is the most complex issue. It involves technology com panies, MSMEs
and so many other sectors. We should be able to finalise something soon,“ a senior
government official said.
To qualify as a startup, an entity would also have to meet certain financial standards
besides having a level of innovation in its product or service. “It is better to have a broader
definition of startups, so MSMEs and tech-based startups can both take ad vantage. The
moment one leaves things for interpretation, corruption will seep in,“ said Gaurav Kachru,
founder, 5ideas Startup Superfuel.Startups are expected to create 250,000 jobs in India by
2020, up from 80,000 now, according to a Nasscom report.The Start-Up India initiative
announced by Modi in his Independence Day speech assumes significance giv en the thrust
by the government toward employment generation.

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