Companies eyeing benefits under the Startup India programme will soon have to declare upfront how many jobs they will create in order to qualify as the government moves to make employment generation the guiding principle for all its major programmes.
Not just innovation, companies will now have to provide a job creation
target, and meet specific financial standards to qualify as a startup
and avail benefits under the government’s Startup India programme.
"We will soon notify the new definition for startups, which goes beyond innovation," a senior government official said. Innovation is currently the main criterion for startups to qualify for benefits such as tax holidays and fast-track
A Nasscom report pegs the number of jobs that will be created by Startups in India at 250,000 by 2020, up from 80,000 now.
Through the revisions, the government looks to make employment generation a guiding principle for its major programmes and making it a mandatory requirement.
Companies incorporated after March 31, 2016, were entitled to avail a three-year tax holiday in the first seven years of their existence under the Startup India initiative. However, only 10 startups so far have received an approval from an inter-ministerial board for availing the benefits. This, even as the Department of Industrial Policy and Promotion (DIPP) relaxed some norms like getting a certification from a government department on its innovation capabilities.
Considering biotechnology and medical devices’ firms have a longer gestation period, the DIPP is also looking to increase the maximum age for these companies firm to qualify as a startup to 8-10 years from five years.