Startup India: Action plan

Startup India Action Plan was launched on 16th January, 2016 at Vigyan Bhavan, New Delhi by the Government of India (GOI), with a mission to unleash the startups from administrative obstructions and to foster innovation and entrepreneurship.

What is a startup?

What is StartupFor availing incentives available under startup action plan, government has defined startup as an entity that is not more than 5 years old, is registered and focused on innovation.




                                            Startup definition
ParametersEligibility criteriaRemarks
Company typeEither a LLP, registered partnership firm, private limited companyProprietorship firms are not eligible
Years in businessThe company should be less than 5 years old.The company’s age is measured from date of incorporation
TurnoverLess  than Rs. 25 crores
ProductNew product, service or process(Or)a significantly improved product, service or process


(This  is difficult to ascertain, therefore, the government has defined the eligibility parameters, explained in the adjoining column)

The startup should:

  1. Be endorsed by an incubator established in a post graduate college or by an incubator that is funded/recognized by government
  2. Be funded by a Venture Capital fund/angel fund/PE fund that endorses the innovative nature of its business.
  3. Have a  patent from Indian Patent and Trademark office


Key measures:  The Startup India Action Plan can be broadly divided into three parts as shown below.

Startup Indian Action Plan

Ease of doing business

  1. Easy registration: Company registration through an app
  2. Self-certification:
  • Startups will be allowed to self-certify compliance with nine labor laws; no inspection will be conducted for three years
  • White startups (i.e., software startups) will be allowed to self-certify compliances with environment laws
  • Startups do not have to pay income tax for first 3 years
  1. Easy exit:
  • Startups allowed to close within 90 days of submitting the application for closure


  1. The government plans to set up a INR 10,000 crore fund to invest in startups, of which INR 500 crore corpus is towards a Credit Guarantee Fund, which will make it easier for startups to obtain a bank loan
  2. Exemption on long term capital gains, if capital gains are deployed in a fund that invests in startups, or if these gains are used to purchase assets in a startup
  3. The GOI plans to set up a specific fund for investing in bio-technology startups

 Fostering Innovation

  1. Industry-Academia Partnership
  • Incubators at engineering and management colleges to support technology driven innovation
  • Research parks in IITs, so that research based companies could be housed there and benefit from their research expertise
  • Funding support for setting up new incubators by both government as well as private institutions
  • Incubators for bio-technology startups
  1. Government to hold startup fest to facilitate exchange of ideas between incubators, investors and entrepreneurs
  2. Innovation focused programs for school and college students

How Finetrain Can Help:

The startup mission couldn’t have come at a better time: The business environment in India is becoming more entrepreneur friendly, as also reflected in the World Bank’s recent report on ease of doing business across countries.

If you are thinking about a new venture, now is the time to start. Finetrain can assist you in identifying locally available opportunities that can be converted into viable businesses. We can help you with:

  • Comprehensive, real-time information on local opportunities
  • Assessing viability of specific opportunity
  • Facilitating connections to sector experts and/or professionals who can help you in implementing your plans


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