Admitting that India's regime for start-ups is "complex and difficult", a top official today said the government is working "in a big way" to improve the country's taxation, patent and registration ecosystem.
"... Regime for start-ups is complex and difficult. Out of the many start-ups that succeed in India, 60-65 per cent relocate to Singapore. So, challenge is to create a world-class regime to bring these start-ups back," DIPP Secretary Amitabh Kant said at a CII event here.
"We have to work on improving taxes, patent and registration ecosystem. We are working on this in a big way."
Highlighting the need to make India "an extremely easy place" to do business for start-ups, Kant said the government is trying to scrap multiple regulatory clearances.
"If you look at any part of the world, we see angel investors are coming and supporting start-ups. We need to give them a bigger push. We are trying to do away with a lot of regulatory clearances. But we also need a fund of funds to handhold angel investors," Kant added.
He projected that India's e-commerce market, which currently stands at USD 10 billion (Rs 66,000 crore), may grow to USD 100 billion by 2017 and even USD 250 billion in a decade.
The Department of Industrial Policy and Promotion (DIPP) Secretary said the government is creating a separate set-up for patents and attempting to bring down the registration time and trademarks to 18 months and 3 months, respectively.
"We are creating a separate regime for patents and recruiting 1,000 people as patent examiners... We are trying to complete the registration of patents in 18 months. We are doing the same with trademarks where we want to bring down the time of registration to 3 months," Kant said.
Moreover, he said, under the new patent rules, a separate window for Make in India and start-up applications are in the offing.
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According to Gokul Chaudhri, Leader (Direct Tax) at BMR & Associates LLP, start ups would benefit if they were given a dedicated wing of the tax department.
"This includes guidance and assistance for tax compliance, amnesty from any inadvertent lapses, annual self-assessment tax payment instead of advance tax and the like," he said.
An important expectation from the campaign would be to see how the government introduces benefits that promises an eco-system with greater funding avenues like tax exemptions for angels, easing working capital eligibility norms, deferral of tax on ESOPs etc, BMR Advisors Partner Vivek Gupta said.
He added that this will ensure that budding entrepreneurs have sufficient time to experiment to come out with the right business model.
Nidhi Agarwal, CEO and founder of KAARYAH.Com agreed. "Easier, democratised availability of capital will encourage the ambitious to start something on their own," she said.
Appreciating Modi's initiative, IT veteran and Infosys co-founder Narayana Murthy said the move will encourage entrepreneurship and generate jobs.
In the past two years, the Indian start up ecosystem has grown both in terms of size and funding. According to a report by industry body Nasscom, India ranks third among global startup ecosystems with more than 4,200 new-age companies.
These companies have also received millions of dollars in funding and many billion-dollar businesses like Flipkart, Snapdeal and ShopClues have also come to the fore.
"This initiative will be instrumental to catapult us to the position of number one economy in the world, as predicted by industry estimates, in the next 15-25 years," AskmeBAzaar.Com CEO Kiran Murthi said.
Saurabh Arora, CEO of Lybrate said it wants to work closely with the government to make healthcare available to every citizen of the country.
"It (government's initiative) will definitely encourage those who have innovative ideas to pursue them and not shun for want of clarity and support," he added.
Another area which requires attention is the education front. Azhar Iqubal, co-founder & CEO at Inshorts (a news app) said there is a need to include more contemporary and startups relevant skills in the college curriculum.
"A lot of new skills which Startups need in prospective recruits viz Product Management, App Development, Content Marketing, UI/UX Management etc are not being imparted in the formal education system," he added.
