The Start-up India Scheme is a flagship initiative by the Government of India aimed at promoting innovation, entrepreneurship, and the startup ecosystem in the country. It was first announced by Prime Minister Narendra Modi on 15th August 2015 at the Red Fort and officially launched on 16th January 2016 by Arun Jaitley, the then Finance Minister. The scheme is administered by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry.
The primary goal of the scheme is to remove barriers for startups, such as complex regulatory approvals, funding challenges, and lack of infrastructure, while also fostering innovation, industry-academia partnerships, and entrepreneurship across India.
Why was the Start-up India Scheme Introduced?
India has immense potential for innovation, but entrepreneurs often face challenges like:
- Lengthy approvals under the License Raj
- Difficulty obtaining land permissions
- Delays in foreign investment proposals
- Complicated environmental clearances
The Start-up India Scheme was designed to simplify these processes, provide funding support, and create a strong ecosystem that nurtures new businesses. The scheme aims to:
- Drive economic growth and create employment opportunities
- Promote innovation and technology development
- Position India as a global hub for startups
What are the Key Objectives of the Start-up India Scheme?
The Start-up India Scheme is built on three major pillars:
| Pillar | Details |
| Funding Support and Incentives | – Financial assistance through Startup India Seed Fund Scheme (SISFS) – Access to Fund of Funds managed by SIDBI with a corpus of ₹10,000 crore – Tax exemptions and incentives for eligible startups |
| Industry-Academia Partnership and Incubation | – Establishment of incubators and innovation hubs – Collaboration between educational institutions and industry to promote research-based startups – Atal Innovation Mission (AIM) to foster self-employment and talent utilization |
| Simplification and Handholding | – Simplified regulations under laws such as the Companies Act – Self-certification for labor and environmental laws – Intellectual Property Rights (IPR) facilitation to protect innovations |
Who is Eligible for the Start-up India Scheme?
To be recognized under the Startup India Scheme, a startup must meet the following criteria:
- Company Type: Private Limited Company, Limited Liability Partnership (LLP), or Partnership Firm
- Age: Less than 10 years from the date of incorporation
- Turnover: Less than ₹100 crore in any financial year since incorporation
- Innovation: Engaged in innovation, development, or improvement of products or services
Important Note: A business formed by splitting or reconstructing an existing business is not eligible.
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How to Register Under the Start-up India Scheme?
The registration process involves the following steps:
- Incorporate the Business: Register your business as a Private Limited Company, LLP, or Partnership Firm and obtain a Certificate of Incorporation and PAN.
- Create an Account on Startup India Portal: Visit the official Startup India portal and fill out the registration form with essential details of the business.
- Submit Required Documents:
- Incorporation/Registration Certificate
- PAN card
- Letter of recommendation (if applicable)
- Brief description of the business
- Obtain Recognition: After verification, your startup will receive a recognition number and a certificate of recognition.
Benefits of Recognition:
- Exemption from income tax for 3 years
- Access to funding schemes like SISFS
- Facilitation of IPR protection and patent fee reduction
What are the Benefits of the Start-up India Scheme?
The Start-up India Scheme offers multiple advantages to entrepreneurs:
| Category | Key Features |
| Financial Support | – Startup India Seed Fund Scheme (SISFS) for proof of concept, product development, and commercialization – Fund of Funds by SIDBI to improve funding availability |
| Tax Benefits | – Three-year income tax holiday – Exemption from capital gains tax on certain investments |
| Ease of Operations | – Simplified regulatory processes – Freedom from frequent inspections |
| Intellectual Property Rights (IPR) | – Reduced patent registration fees- Fast -tracked patent applications- Access to IPR facilitators |
| Infrastructure Support | – Incubators under Public-Private Partnerships (PPP) – 35 new incubators in existing institutions funded by central, state, and private sectors – Promotion of Atal Innovation Mission for entrepreneurship and talent utilization |
| Networking Opportunities | – Connect with mentors, investors, and accelerators – Access to knowledge modules, workshops, and startup fests |
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How does the Government Promote Startup Culture in India?
The government has implemented various initiatives to strengthen startup culture:
- Atal Innovation Mission (AIM): Encourages entrepreneurship and supports self-employment through mentoring and funding.
- Incubators in PPP Mode: Professional management of government-supported incubators with funding from central, state, and private sectors.
- I-MADE Program: Focuses on building 1 million mobile app startups in India.
- Pradhan Mantri Mudra Yojana (PMMY): Provides low-interest loans to entrepreneurs from low-income backgrounds.
- Annual Start-up Fest: A national platform for startups to connect with investors, government officials, and other stakeholders.
What are the State Rankings Under the Startup India Scheme?
The States’ Startup Ranking Framework evaluates the efforts of states and union territories in promoting startups. Rankings are based on policies, incubators, innovation, scaling, regulatory reforms, and communications.
- Best Performer: Gujarat
- Top Performers: Karnataka, Kerala
- Leaders: Maharashtra, Odisha, Rajasthan, Bihar, Chandigarh
- Emerging States: Assam, Delhi, Mizoram, Sikkim
How does Startup India Align with Other Government Initiatives?
Startup India is linked with other government programs:
- Make in India: Strengthens manufacturing and startup opportunities
- Digital India: Promotes tech-based startups and digital entrepreneurship
- Skill India: Builds human capital for innovative startups
- Stand-Up India: Facilitates loans and financial support for women and marginalized entrepreneurs
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Key Takeaways
| Topic | Key Points |
| Launch Date | 16th January 2016 |
| Launched By | Arun Jaitley, Finance Minister |
| Administered By | DPIIT, Ministry of Commerce and Industry |
| Eligibility | Private Ltd, LLP, Partnership, <10 years old, turnover < ₹100 crore |
| Key Pillars | Funding support, Incubation & partnerships, Simplification & handholding |
| Funding Schemes | SISFS, Fund of Funds (₹10,000 crore) |
| Tax Benefits | 3-year income tax holiday, capital gains exemptions |
| IPR Support | Reduced patent fees, fast-tracked applications |
| Infrastructure Support | Incubators, innovation hubs, Atal Innovation Mission |
| Networking & Resources | Mentors, investors, accelerators, startup fests |
Questions Based on Startup India Scheme
Q1. When was the Startup India Scheme officially launched?
A) 15th August 2015
B) 16th January 2016
C) 26th January 2016
D) 1st April 2016
E) 2nd October 2015
Answer: B
Q2. Which ministry administers the Startup India Scheme?
A) Ministry of Finance
B) Ministry of Commerce & Industry
C) Ministry of Education
D) Department for Promotion of Industry and Internal Trade (DPIIT)
E) Ministry of MSME
Answer: D
Q3. Which of the following entities is not eligible under Startup India?
A) Limited Liability Partnership (LLP)
B) Private Limited Company
C) Partnership Firm
D) Reconstruction of an existing business
E) Innovative startup
Answer: D
Q4. What is the maximum turnover for a startup to qualify for Startup India recognition?
A) ₹50 crore
B) ₹100 crore
C) ₹150 crore
D) ₹200 crore
E) ₹500 crore
Answer: B
Q5. What is the tenure limit for a startup to be eligible under Startup India?
A) 5 years
B) 7 years
C) 10 years
D) 12 years
E) 15 years
Answer: C
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Q6. Which scheme provides funding for proof of concept, prototype development, and commercialization?
A) Stand-Up India
B) Startup India Seed Fund Scheme (SISFS)
C) Pradhan Mantri Mudra Yojana (PMMY)
D) Atal Innovation Mission
E) Make in India
Answer: B
Q7. Which of the following is a key pillar of the Startup India Scheme?
A) Funding support
B) Industry-academia partnership
C) Simplification and handholding
D) All of the above
E) None of the above
Answer: D
Q8. Who inaugurated the Startup India Scheme?
A) Narendra Modi
B) Arun Jaitley
C) Nirmala Sitharaman
D) Piyush Goyal
E) Amit Shah
Answer: B
Q9. Which program focuses on building 1 million mobile app startups in India?
A) Make in India
B) I-MADE
C) Skill India
D) Stand-Up India
E) Atal Innovation Mission
Answer: B
Q10. Which state was ranked as the best performer in Startup India 2020 rankings?
A) Karnataka
B) Gujarat
C) Maharashtra
D) Kerala
E) Rajasthan
Answer: B
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