July 18, 2016     

India: Relaxation in ‘Startup India’ Norms

 

The ‘Start- up India’ initiative was launched by Department of Industrial Policy and Promotion (herein referred to as ‘DIPP’) in January, 2016, to encourage entrepreneurship and innovation by providing supportive eco-system, eased regulatory mechanism and funding the budding enterprises. Despite initial optimism, many irregularities were perceived like technical and rigid registration procedure, incubators charging fee imprecisely, lack of monitoring authority and absence of instructing unit. Our prior publication dated June 6, 2016 reported that out of 250 applications filed for seeking benefits under the scheme, only 1 got approved. Witnessing these issues and acknowledging the hassles it creates, the government has come up with simplified norms.

 

Let’s start with the eminent alterations made. Firstly, the requirement to obtain a certificate of Eligibility from the Inter-Ministerial Board of DIPP has been removed in case of IPR-related matters. Now a certificate of recognition of DIPP would suffice the eligibility criteria to avail IPR-related benefits. Furthermore, the fee of incubator has been fixed to Rs. 5,000 and is limited to Rs. 10,000, in case, the experts’ assistance is taken from outside to assess the innovative idea put forth by a startup. As per the procedure, the startups needs to take letter of recommendation from the incubators before registering on the Startup India portal. The government has also certified 20 private organizations as incubators and is planning to create sector specific incubators under the Atal Innovation Mission along with 500 tinkering labs to provide pre-incubation training and a seed fund for high growth startups. To keep a check on these reforms, the DIPP has formed a monitoring committee which will take stock of action plan’s implementation once a month.

 

 

In another initiative, the DIPP will be launching a learning module on the startup India portal, which will have all the information on how to move forward with an innovative idea. To finance the scheme, the government has already declared the fund for startups in the budget and Rs. 2,500 crore will be released each year for over the next four years. After the passage of The Finance Bill, the tax benefits will also be extended to aspiring entrepreneurs. These reforms are anticipated to foster innovation and boost entrepreneurship spirit in Country’s youth.

 

Recently, the DIPP has again issued a public notice on July 11, 2016 intimating that two provisions in the Scheme have been updated: 

  1. The definition of “start-up” has been revised and the definition of start-up as rendered in explanation 5 of Notification 180(E) published in Part II, Section 3, Sub-section (i) of Gazette of India dated 17.02.2016 would be applicable now.

  1. The revised Scheme uplifts the requirement by a start-up to obtain certificate of eligible business from the Inter- Ministerial Board of Certification

Guidelines for Facilitators and start-Ups for filing and processing for patents, designs and trademarks- The Office of Controller General of Patents, Designs and Trademarks (CGPDTM) has on June 08, 2016 issued Guidelines for Facilitators and start-Ups for filing and processing for patents, designs and trademarks. The Guidelines enumerate general provision for the filing and processing of patent, designs and trademark applications in India.

 

The endeavours being taken by the Government to encourage innovations and creativity by start-ups is noteworthy. In view of these relaxed rules and facilitations we expect that more and more start-ups would protect their IP and become IP-intensive companies.

 

 

 

 

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