Indian Economy News

Index to rank states on on startup ecosystem likely next month

  • PTI
  • November 15, 2017

New Delhi: The Department of Industrial Policy and Promotion (DIPP) is expecting to roll out by next month an index to rank states on the basis of measures being taken by them to promote startups, a top official said.

DIPP Secretary Ramesh Abhishek today said such an exercise would help states learn best practices.

To give a boost to startups, the department has initiated an exercise to rank states and union territories on the basis of measures being taken by them to promote budding entrepreneurs.

The DIPP has consulted the states for the ranking framework. "We are hoping that from December, we will be able to roll out an index for ranking of states on their support to startup ecosystem," he said in response to queries on Facebook Live.

Several states like Odisha, Karnataka and Rajasthan are taking several measures to promote startup ecosystem. As many as 16 have also formulated their startup policies.

The government has launched the Startup India Action Plan to promote budding entrepreneurs in the country. The plan is aimed at giving incentives such as tax holiday and inspector raj-free regime and capital gains tax exemption.

Abhishek said that in the last about one year, the DIPP has helped over 14,000 startups in various ways.

"4,700 startups have been recognised by the department giving them host of services and incentives," he said adding "we have been able to provide Rs 1587 crore of funds".

The department, he said, is also documenting good practices of all the states.

On the proposal to set up a credit guarantee scheme for startups, he said the DIPP is awaiting cabinet's nod for this.

For the scheme, a corpus contribution of Rs 2,000 crore is proposed keeping in mind the challenges faced by startups in accessing funds. There is a plan to support about 7,500 startups with this.

On the issue of access to funds, the secretary said he held a meeting with angle investors and discussed the problems they are facing to fund budding entrepreneurs.

"We are trying to see how angle investors can also take advantage of section 56 of Income Tax Act...Hopefully, there will be a change in regulations that will protect that investments. It is not the government intention to tax risky investments," he said.

Going forward, the DIPP is working in the direction where access to funds gets easy for startups, he added.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.