The Modi government is planning a further reduction in taxation for startups and a three months exit procedure for those ventures which fail to succeed.
Speaking at the India international MSME and Startup Expo 2017, Dr Jitendra Singh, Minister of Development for North-eastern state and
Minister of State for Prime Minister Office Personnel said that the government is thinking about a tax holiday, a temporary reduction or elimination of tax for new startups with a three months exit period for them.
Currently, startups in India certified by an Inter-Ministerial Board (IMB), can avail a three-year tax exemption within a period of seven years. For closing a company, it may take up to three years in India, as court approval is needed for a winding down procedure which the government is planning to cut short to three months.
Singh also urged the state politicians to help the startups with sustainability and asked the state departments to add value to the startup events. He said, “We waste resources by giving mementoes to each other and said many of them are given to the drivers or left in the car and are eventually wasted.”
He asked the ministers to used the resources for startup and SME events and motivate the youth of India to become entrepreneurial. “If we change our behaviour we can preserve it.”
Advising the startups in the country he asked them to think out of the box.
With funding and investment he said that the government of India will give an additional assistance with initial capitalization for startups in India.
He said, “If there are indigenous startups and SMEs, then the state will give them additional incentive for promoting traditional services and products of the country.”“It will create a new market in the country," he added.