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Commerce and Industry Minister meets incubators and accelerators of startup ecosystem

By   /  January 10, 2017  /  Comments Off on Commerce and Industry Minister meets incubators and accelerators of startup ecosystem

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 New Delhi:  The Commerce and Industry Minister, Mrs Nirmala Sitharaman, held a meeting with various incubators and accelerators to receive feedback, understand their concerns and address key challenges faced by them in the startup ecosystem. This is in line with her previous initiative to reach out to various stakeholders of the ecosystem.

In the meeting, some the key points and suggestions that came up during the interaction were as followed: Umbrella recognition of incubators, accelerators, co-working spaces and mentors as ‘Startup builders’;  Service tax exemption is being currently provided to incubators duly recognized by Government; it should be extended to other incubators as well; and startups registered with incubators need to get their valuation done which is a financial burden on them while startups below a particular threshold may be exempted from the same.

Further,   the requirement of seed stage funding for Startups was highlighted.  Incubators should be given grant by Government to help Startups at the initial stages. E.g. PRISM under DSIR which gives a grant of Rs 2 lacs for startups at the seed funding stage is extremely helpful; a similar seed stage funding from 5-10 lacs for startups was proposed.

Greater corporate engagement with incubators may be facilitated. The participant in the meeting proposed that section 35(2AA) of Income Tax Act may be extended to incubators as well. Marketing and funding support to startups is critical; hence, a separate fund for incubators needs to be created especially through CSR mandate for corporates.

Other major points that have come up are as followed: a central repository of all schemes and funds available under the Government for the benefit of startups should be created; state governments and municipal bodies may be requested to extend relaxed procurement norms to startups; and a national survey can be undertaken to collate and address all challenges of startups on a common platform

Incubators play a critical role in driving the growth of startups at all stages of their entrepreneurial journey. They help provide mentorship and handholding support and above all foster a culture of innovation. The government should extend support to incubators/accelerators so that they in turn can nurture startups, which would help India become a nation of job creators instead of job seekers.

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