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Start-Up Policies of Various States of India

Published Date : Jan 31, 2018

Start-Up Policies of Various States of India

There are more startups and entrepreneurs than ever before—globally as well as in India. The current younger generations have proven they have the confidence to begin and acumen to run their own business ventures. It’s very important, however, to create an ecosystem conducive to helping new entrepreneurs succeed. In this lies progress. Many startups do not reach their full potential due to limited guidance and access.

Startup India is a flagship initiative of the Government of India, intended to build a strong eco-system for nurturing innovation and Startups in the country. The Government believes that the initiative will drive sustainable economic growth and generate large scale employment opportunities. The Government through this initiative aims to empower Startups to grow through innovation and design.

To address all aspects of start-ups, the Government’s The Action Plan, announced in Jan ’16 is based on the following three pillars:

  • Simplification and Handholding
  • Funding Support and Incentives
  • Industry-Academia Partnership and Incubation

 

In line with this initiative, some of the state governments have varying key benefits to facilitate a strong start-up ecosystem.

Jharkhand

  • A onetime marketing grant up to INR 10000 lakh would be provided to the successful launch and marketing of the product. Special incentive of INR 10 lakh would to be every successful startup. 
  • Reimbursement of 100% Patent Filing cost 
  • 100% Stamp Duty and registration and VAT reimbursements 
  • 50% Reimbursements on lease rentals up to Rs. 5 lakh for a maximum period of 5 yrs 
  • 30% amount paid to Internet service providers reimbursement (up to Rs 60,000 p.a) up to 5yrs 
  • 30% amount paid to electric bills reimbursement (up to Rs 60,000 p.a)

 

Gujarat

Quantum of Assistance

  • Mentoring service and allow of use of facilities available in institutions. 
  • Rs. 1.2 lakh to innovator as sustenance allowance. 
  • Assistance of Rs. 5 lakh to NI for mentoring services annually. 
  • Assistance of up to Rs. 10 lakh for product development. 
  • Free access to University, Libraries, Govt. Laboratories, Center of Excellence. 
  • Startup approval process of Gujarat Startup Scheme within 3 months

 

Assistance when idea gets commercialized

  • Marketing/ Publicity assistance up to Rs. 10 lakh for introduction of innovated product. 
  • Lease rental reimbursement at the rate of Rs. 15 per sq. ft. per month for 2 years 
  • Interest subsidy @ 9% p.a. Max Rs. 2 lakh/yr for 2 years 
  • Additional support of 25% of equity capital raised without scrutiny up to Rs. 5 crore 
  • 100% reimbursement of Stamp Duty and Registration Fee 
  • Reimbursement of the cost of obtaining Patents up to Rs. 2 lakh per patent

 

Telangana

  • Startups that record a year-on-year growth rate of 15%, as per audited accounts, shall be eligible to get a grant of 5% on Turnover, subject to a limit of Rs. 10 lakh within a period of three years from the date of incubation. 
  • Government shall provide reimbursements of 30% of the actual costs including travel incurred in international marketing through trade shows. This incentive will be subject to a maximum of Rs. 5 Lakh per year per company. 
  • Recruitment assistance of Rs. 10,000 per employee for the first year. 
  • Annual Reimbursement of VAT/CST paid in Telangana, up to a maximum of Rs. 50 Lakh turnover by incubated startup companies within a period of first three years of being incubated. 
  • Reimbursement of Service Tax paid by startups incubated in the Government supported/recognized incubators, whose annual turnover does not exceed Rs. 50 Lakh for first three years. 
  • Telangana Government will also expedite the launch of its early-stage investing vehicle T-Fund (Telangana Innovation Fund), which is being launched in concert with leading global investors, in collaboration with T-Hub; Telangana Government will be an LP in the fund. A fund that will function as a master fund and invest in sector-specific and general venture capital funds shall be set up with an initial target of INR 2000 crore. 
  • There will also be a T-SEED fund to fund startups in the seed stage. This fund with an initial size of INR 250 Crore is aimed at encouraging innovators who need early stage funding to work on their research discoveries, college project ideas, etc. T-Seed Fund aims to ease the costs incurred at an early stage such as company registration, patent filing, quality certifications, travel, etc.

 

Rajasthan

  • Rs. 1.2 lakh to innovator as sustenance allowance for 1 year. 
  • Free access to University, Libraries, Govt. Labs, Center of Excellence. 
  • Assistance of up to Rs. 10 lakh for Launch of product/service in market.

 

West Bengal

  • Reimbursement of 100% Patent Filing cost. 
  • Facilitate early stage funding to startups up to 10 lakhs p.a.

 

Odisha

  • Rs. 1.2 lakh to innovator as sustenance allowance for 1 year. 
  • Reimbursement Rs. 1 lakh p.a. for 3 yrs for providing free internet, free electricity and mentoring services. 
  • Reimbursement of marketing/publicity expense up to Rs 5 lakh. 
  • 100% VAT Reimbursements. 
  • Reimbursement of 100% Patent Filing cost

 

Bihar

  • Grant up to Rs. 10 lakh per startup as interest-free loan for 10 yrs. 
  • Reimbursement of 100% Patent Filing cost. 
  • Free cost valuation for start ups. 
  • Success fee 2% of investment to startups for mobilizing investments from state registered angel investors. 
  • Financial assistance as loan equal to the amount invested in startup by the Angel groups and category alternate investment funds.

 

Maharashtra (Draft)

  • The Government will guarantee loans for startup provisions for NPAs to the extent of 10% of their outstanding debt. 
  • 10% of approved program cost would be paid as program implementation and monitoring fee. 
  • 100% of stamp duty and registration fee will be compensated for the first transaction and 50% for the second transaction. 
  • Startups will be compensated for the cost of obtaining an Indian patent (up to Rs. 2 Lakh) and an international patent (up to Rs. 10 Lakh).

 

Karnataka

  • Reimbursement of 30% marketing cost incurred in international marketing to max. Rs 5 lakh p.a  (Rest all are related to incubator) 
  • Funding will be in the form of Grant-in-aid limited to a one time grant of up to Rs. 50 lakh to be released in tranches based on the life cycle of the business plan. 
  • Reimbursement of Service Tax paid by startups incubated in GoK supported incubators and CIFs whose annual turnover does not exceed Rs. 50 lakh for the first three years or till the incubator becomes DST certified whereby the services given by the incubator and the incubatees become exempt from service Tax. 
  • Annual Reimbursement of VAT/CST paid in Karnataka, up to a maximum of Rs. 50 lakh turnover by incubated startup companies within a period of first three years of being incubated. 
  • Marketing Incentives to Startups: Government shall provide imbursements of 30% of the actual costs including travel incurred in international marketing through trade show participation. This incentive will be subject to a maximum of Rs.5 Lakh per year per company. 
  • The cost of filing and prosecution of patent application will be reimbursed to the incubated startup companies subject to a limit of Rs. 2 lakh (0.2 million) per Indian patent awarded. For awarded foreign patents on a single subject matter, up to Rs. 10 lakh (1 Million) would be reimbursed. The reimbursement will be done in 2 stages, i.e., 75% after the patent is filed and the balance 25% after the patent is granted.

 

Due to the high risk nature of startups, they are not able to easily attract investments. From aiding funding for different aspects like marketing, patents, duties, property rentals, etc, to tax exemptions, free access to universities, libraries, govt. labs, etc, start-ups are being given a big and much needed push. We, as citizens, must take advantage of these allowances, and nurture an entrepreneurial spirit.   

Download the Startup India Action Plan here: https://www.startupindia.gov.in/pdffile.php?title=Startup%20India%20Action%20Plan&type=Action&q=Action%20Plan.pdf&content_type=Action&submenupoint=action

 

- By GemAtlas Team