How the government is creating initiatives for startups

Recently, the government’s relationship with startups changed drastically. During last year’s Independence Day, Prime Minister Narendra Modi initiated the Startup India campaign to improve the environment for startups across India. Not even a year has passed since the announcement was made and already so many restrictions have been removed, and incentives put in place:

Financial Support

The Prime Minister’s slogan “Fund the Unfunded” has led to the strong endeavor of the MUNDRA bank. This provides small startups with the finance necessary to facilitate the everyday needs of the business. Whilst ensuring the adequate credit is provided, the bank safeguards startups by asking for their repayments within a very reasonable timeframe. Benefitting over 58 million small business owners in India, the initiative is clearly crucial for those without the option of mainstream credit.

Tax Incentives

Guidelines have recently been published for tax exemptions available for startups until 31 March 2019. This includes an amazing three-year tax holiday! Here, the government’s dedication to promoting the growth of India’s startups is highlighted. Furthermore, the startup’s chances of success are potentially heightened due to investors being made exempt from capital gains tax.

Faster Patent Registration

Although previously taking around 5-7 years for a patent to be granted, this all changed in May 2016. Under immediate effect, the patent grant is made available within 2 and a half years. This time limit is hoped to reduce to an incredible 1 and a half years by March 2018. Fees are also reduced under the faster clearance route with startups having an application fee of Rs. 8,000 compared to Rs. 60,000 for companies.

Faster Exit for Startups

90% of startups fail. This fact, along with the difficulty associated with closing down a business, is often enough to discourage ideas from becoming reality. In order to stimulate experimentation and innovative ideas, part of the Startup India action plan is to smoothen the process after a business fails. This involves creating a simpler way to reallocate resources and implement easier debt structures.

This lists just a few of the ways in which the government helps India’s startups. To find out more about Startup India’s Action Plan visit

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