In January, the Narendra Modi government had announced the ambitious Start Up India initiative promising host of benefits including tax exemption for first three years to budding entrepreneurs.
Few months later, it has emerged than as many as 400 entrepreneurs applied to Department of Department of Industrial Policy and Promotion (DIPP) for recognition as innovative startups to avail tax breaks and other benefits.
According to a PTI report, an inter-ministerial committee assessing the applications has, so far, considered only 189 requests and out of that 148 applicants have been asked to properly attach relevant documents. 10 applications have been rejected because their initiatives were deemed to have innovation involved.
The report further added that 30 startups had been asked to give additional information about their innovation. Just one received the approval to avail benefits for intellectual property rights.
“The DIPP has asked them to attach their documents in proper way, otherwise it would be difficult to scrutinise them,” a DIPP official was quoted by the news agency.
One of the preconditions for the initiatives to be deemed as startup was to have their initiatives approved by incubators. This clause had come under criticism from many, who felt many startups lacked resources and contacts to meet this criteria.
In January, Prime Minister Modi announced that there would be income tax exemption to start-ups for the first three years. He also promised faster patent registrations and quicker exits for companies. Norms would be relaxed for public procurement of start-ups, he informed.
India has the third-largest number of start-ups globally.