In an exclusive conversation with CNBC-TV18's Shereen Bhan, the DIPP Secretary expressed confidence that the Finance Minister will consider the proposal for lower tax rates for startups when he finalises Budget 2018.
India plans to change its tax policy for startups to make the space more attractive for investments -- that's the word from DIPP Secretary Ramesh Abhishek. In an exclusive conversation with CNBC-TV18's Shereen Bhan, the DIPP Secretary also expressed confidence that the Finance Minister will consider the proposal for lower tax rates for startups when he finalises Budget 2018.
Below is the verbatim transcript of the interview.
Q: Take me through the idea behind the product showcase. How did you decide on which startups will be given this platform here today?
A: We looked at a very large number of startups who are doing very innovative work in India. It was not an easy choice because we have so many of them, but we tried to bring out products and innovations that have a huge impact on society. For example, you look at this ambulance and this actually can work in any village, any small town, it can be taken by or used by any motorcycle or even a bullock cart. There is a stretcher and there is online facilities. Everything is here. All life-saving things are there.
Q: So what can you do for an inventory and a young turk like we saw?
A: This is the biggest benefit of this event and similar events that we are able to inform the investors and people who can market their products where the demand is about what are innovations in the market and so that our startups get access to funds, they get access to markets and they also get mentoring. It is also important to find a mentor. So all these opportunities are there in these events and I think it is important that everyone knows about it.
Q: So this is the other innovation that caught the attention of the Prime Minister as well as Ivanka Trump.
A: This is the only team form India that has participate in the SpaceX programme out of 2,400 teams around the world of Elon Musk and they are doing a great job, undergrads, see how smart our undergrads are. They are still worried about writing their exams and they are doing such a fantastic job and yesterday it caught the imagination of the Prime Minister and Miss Trump also. Miss Trump even said that if this has been available, she could have come here much faster.
Q: The government is trying its bit to support, but how do you make this relationship between academia, young students here, corporate India, the government, much more robust?
A: This is one of our prime objectives of Startup India programme. We want to bring everyone on the same platform. Actually the virtual startup that we have created intends to do that and these various events also that we do and we participate in does exactly that that people that are investors, who like to invest in these products but they do not get to meet these innovators. There are people from academia who also should be involved. We need much more involvement of universities with industry and with government. So these are all the things that we are trying to do.
Q: So which are the other products that caught the attention and the fancy of the Prime Minister as well as Miss Trump?
A: This is another product that they found very interesting. They actually tried on all the virtual and augmented reality here.
Q: I believe there is a lot her in terms of the medical device space as well that caught a lot of the attention of the Prime Minister as well as Ivanka Trump, so maybe we should take a look at that as well.
A: This is a medical device which has been innovated to check breast cancer. This does it in a very short time of 0-15 minutes with 94 percent accuracy and one examination that you can do with just Rs 40.
Q: This has been a getting together of entrepreneurs of every part of the world. Lots of ideas, lots of food for thought, but in terms of the next steps now, as far as the Startup India plan is concerned. We understand that perhaps there could be some changes to the Startup India policy, there could be some tax related changes as well. What can we expect?
A: One of the main objectives of Startup India programme has been to ease the regulations and the tax side as well. So some of the changes has been done, but we want to do many more.
Q: Tax changes as well?
A: Yes definitely. Yes, absolutely. For example, we want to bring at par unlisted securities of startups with listed securities. All the tax treatment of listed securities. So we want those facilities which will help investors, incentivise them to invest more in startups. When their exit is better at a lesser tax rate, obviously they would be motivated to come in faster.
Q: So will we have to wait till the Budget for these changes to be announced?
A: The changes can be done only in the Budget if the Finance Minister agrees, absolutely.
Q: And do you have affirmation from the Finance Minister on wanting to move ahead on these?
A: No, we are still in dialogue and I am sure that Government of India including Finance Ministry has been very liberally treating the startups and their challenges and we have no doubt they will consider it very sympathetically.
Q: So you are hopeful?A: Absolutely.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.