SYLLABUS
GS-3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Context: The Centre has revised the startup recognition framework under the Startup India Action Plan to strengthen India’s innovation ecosystem and support the next phase of startup-led growth.
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- The revision aligns with the Prime Minister’s vision of India as a global innovation hub, a manufacturing-led economy, and a centre for emerging technologies.
- As Startup India enters its second decade, the framework aims to create a predictable, inclusive, and future-ready policy environment.
- Focus on facilitating long-term patient capital for high-technology and research-intensive startups.
Objectives of the Revised Framework
- Create a more predictable, inclusive, and future-ready policy environment for founders.
- Encourage long-term capital flows into high-technology and research-driven sectors.
- Align policy with the evolving nature of India’s startup ecosystem as Startup India enters its second decade.
- Support enterprises across different stages of the business lifecycle.
Key Revisions in Startup Recognition Criteria
- Enhanced Turnover Threshold: The turnover limit for recognition as a startup has been increased from ₹100 crore to ₹200 crore to support enterprises at different stages of their business lifecycle.
- Introduction of a Dedicated Deep Tech Startup Category: A new sub-category of Deep Tech Startups has been introduced for entities working on cutting-edge and breakthrough technologies, with clearly defined attributes finalised through consultations with Ministries, Departments, and ecosystem stakeholders.
- Expanded Eligibility for Deep Tech Startups: In view of long gestation periods, high R&D intensity, and capital-intensive requirements, the age limit for Deep Tech Startups has been extended from 10 years to 20 years, and the turnover threshold enhanced to ₹300 crore.
- Inclusion of Cooperative Societies: Startup recognition has been extended to cooperative entities to promote innovation at the grassroots level in agriculture, allied sectors, rural industries, and community-based enterprises.
- Eligible Cooperative Entities: This includes Multi-State Cooperative Societies registered under the Multi-State Cooperative Societies Act, 2002, and Cooperative Societies registered under State and Union Territory Cooperative Acts, subject to the fulfilment of other applicable criteria.
Significance of the Revised Framework
- The framework is based on extensive stakeholder consultations across the startup ecosystem and with multiple Ministries and Departments.
- It is expected to expand access to startup benefits for research- and innovation-driven enterprises.
- The revisions provide targeted support to deep tech ventures requiring extended development timelines.
- The inclusion of cooperatives enables innovation-led growth in agriculture and rural development.
- Overall, the framework strengthens India’s position as a global hub for high-technology and knowledge-intensive entrepreneurship.
About the Startup India Initiative
- Startup India is a flagship initiative launched by the Government of India on 16th January 2016 to build a strong ecosystem for nurturing innovation and startups in the country, which will drive economic growth and generate large-scale employment opportunities.
- This initiative is managed by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce & Industry.
- Core Features of Startup India:
- Ease of Doing Business: Startups can operate with more simplified processes such as self-certification and single window clearances.
- Tax Benefits: The startups that are eligible enjoy tax exemptions over the first three financial years as they are established, and this helps them get to their initial growth phase.
- Funding Support: The Fund of Funds (FFS) for Startups worth ₹10,000 crores is an important source of early-stage funding for the growth of a startup.
- Sector-Specific Policies: The government has undertaken specific industry policies targeted at industries like biotechnology, agriculture and renewable energy for promotion.
Startup India Action Plan
- To operationalise the objectives of Startup India, the Government unveiled the Startup India Action Plan on 16 January 2016.
- The Action Plan outlines various initiatives and schemes aimed at building a robust ecosystem to nurture innovation, drive sustainable economic growth, and generate employment.
- The Action Plan seeks to:
- Spread the startup movement across sectors such as agriculture, manufacturing, social sector, healthcare, education, and information technology.
- Extend startup activity beyond tier-1 cities to tier-2 and tier-3 cities, including semi-urban and rural areas.