Lok Sabha polls 2019: BJP promises collateral-free credit up to Rs 50 lakh for startups

BJP in its manifesto for the 2019 Lok Sabha polls has said that it will launch a new scheme to provide collateral-free credit up to Rs 50 lakh for entrepreneurs.

The saffron party also promised the creation of a seed startup fund of Rs 20,000 crore, which will be utilised for investing in early stage companies.

Their vision is to promote setting up of at least 50,000 new startups in the country by 2024. Currently, the country is estimated to have around 35,000 startups with 17,000 registered with the Department for Promotion of Industry and Internal Trade (DPIIT).

On the other hand, Congress, which released its manifesto last week, has promised to create a department - Enterprise Support Agency - to help entrepreneurs with business support such as funding, counselling, access to technology, among others. It has, however, not announced any specific fund dedicated to the startup ecosystem.

The BJP's manifesto also states that if brought back to power, the party will further ease the regulatory requirements of the sector.

The year 2018 saw startups struggling with the issue of angel tax and following backlash, the government widened the definition of a startup, making it smoother for investors to put in their money in these companies. The government also increased the age cap for startups from 7 to 10 years, earlier this year.

Under the IT Act, Section 56 (2) (viib) money invested by angels in a company is treated as income from other sources.

BJP has also promised setting up of 100 new incubators and accelerators by 2024.

It has also decided to give recognition and support to entrepreneurs from scheduled castes, scheduled tribes and other backward communities or economically weaker sections.