A recent article in Economic times describes a change in policy “Companies will have to declare job creation estimates to avail benefits under Startup India”
Companies eyeing benefits under the Startup India programme (link) 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.
“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 patent filing under Startup India.
To qualify as a startup under the new definition, an entity would have to declare its job creation target and meet certain financial standards besides having a certain level of innovation in its product or service. “We will do our own scrutiny at the time of examination of applications for giving the tax benefits,” the official said.
When PM Narendra Modi launched the Startup India initiative in January 2016, one of its main thrusts was to create employment opportunities for the youth, but it was not included a mandatory requirement. The reaction to this announcement has been swift.
- Some are wondering how the government is going to validate the numbers : How can a startup estimate the number of jobs to be created?
- The initiative has not yet taken off in a big way. Thus far only 10 startups have been approved for availing of the tax benefits. DIPP has recognized 798 applications as startups but not given them the tax benefit.