In previous articles, we discussed the current definition / qualifications of a Startup to avail the benefits granted by the government.
Job creation was a big priority behind the idea of Startup India initiative of the government of India. However, there was no mandatory requirement or eligibility criteria for recognition as a startup entity.
As per a report in today’s Economic Times, the government is reworking on the definition and eligibility criteria for startups. So far, the emphasis has been on innovation. Going forward, the emphasis will include employment generation.
Startups applying for government recognition and benefits will have to declare their employment generating potential besides other criteria..
Under the proposed regime, apart from innovation an entity will have to specify its employment creation potential and meet certain financial criteria.
Department of Industrial Policy and Promotion (DIPP) may also dispense with the need for certification of each startup from a government-recognised incubator on its innovation capabilities to be eligible for Startup India benefits.
DIPP also proposes to increase the maximum age for classifying a biotechnology or a medical devices firm as a startup to 8-10 years from the current five years, as the gestation period in this sector is relatively longer.
About the author :
Bhumesh Verma is a Corporate Lawyer with over 2 decades of experience in advising domestic and international clients, with a place in "The A-List - India's Top 100 Lawyers" by India Business Law Journal. He keeps writing frequently on FDI, M&A and other corporate matters. He can be reached at firstname.lastname@example.org