Firms seeking to be included in the Centre’s Startup India programme will soon have to share their job creation target to qualify for benefits under the scheme. An official said the definition of startups will also be redefined to include features that go beyond innovation, The Economic Times reported.
The applicants will have to have to comply with a set financial standard, and their products or services on offer will have to include a certain amount of innovation. “We will do our own scrutiny at the time of examination of applications for giving tax benefits,” the official said.
Innovation is the primary prerequisite under the current policy for startups to avail of tax holidays, expedited patent filing and other benefits.
Prime Minister Narendra Modi had launched the Startup India initiative in 2016 in a bid to create employment opportunities in the country. But the programme did not have as many takers as planned, with only 10 startups having received an approval for the tax benefit, the English daily reported.
While the Department of Industrial Policy and Promotion has acknowledged 798 applications as startups, it has yet to grant them the tax benefit. Startups incorporated after March 31, 2016, were eligible to apply for a three-year tax holiday for the first seven years under the programme.
The department has also withdrawn the criteria that mandates certification by a government-recognised incubator. A report by the National Association of Software and Services Companies has projected that startups in India will create 2.5 lakh jobs by 2020, much above the current 80,000.