INDIA HAS REVISED THE STARTUP RECOGNITION FRAMEWORK

NEWS: India has revised the startup recognition framework under the Startup India Action Plan

KEY Revisions in India’s Startup Recognition Framework

• A dedicated sub-category of start-up has been introduced for “Deep Tech Startups” with specific criteria to identify genuine innovation-Deep Tech Startup Category
• The DPIIT is the final authority that determines whether a company qualifies as a startup or a deep tech startup.
• The entity must own or be in the process of creating significant, novel intellectual property (IP) and be taking steps to commercialise it.
• The turnover limit for startup recognition has been doubled from Rs 100 crore to Rs 200 crore for entities up to 10 years from incorporation.
• For deep tech startups, the recognition period has been extended from 10 to 20 years from incorporation, with the turnover limit raised to Rs 300 crore.
• Both Multi-State Cooperative Societies (under Multi-State Cooperative Societies Act, 2002) and Cooperative Societies (under State and Union Territory Cooperative Acts) are now eligible for startup recognition
• The revised framework introduces stricter safeguards, including a bar on entities engaged in speculative or non-productive assets or activities, as notified by the government
• Excludes businesses formed through the splitting up or reconstruction of existing enterprises from being recognised as startups.

Startup India Initiative

• Launched on 16th January 2016
• Led by DPIIT under the Ministry of Commerce and Industry, has evolved into a full-stack platform supporting startups from ideation to scale
• Startup India Action Plan: Comprises 19 action items spanning across areas such as “Simplification and handholding”, “Funding support and incentives” and “Industry-academia partnership and incubation”.
• The Action Plan laid the foundation of Government support, schemes and incentives envisaged to create a vibrant startup ecosystem in the country.