The commerce and industry ministry led by Suresh Prabhu has announced that a total of 5,350 startups have been recognised by the Department of Industrial Policy and Promotion (DIPP) for availing benefits under the Startup India initiative.
Under the Fund of Funds for Startups, 75 startups have received funding to the tune of Rs 337.02 crore. Further, a 74 startups have been recognised to avail tax exemption under the Income Tax Act.
This announcement comes as a good sign for newly launched startups have been receiving notices from Income Tax (IT) department.
Recently raising the issue to Minister of Finance and Corporate Affairs, Arun Jaitley, ex-Infosys board member Mohandas Pai, who has invested in a number of startups, complaint about the IT department action.
Last year in January, Narendra Modi-led government announced many supportive policies including the profit generated by startups will not be taxable for the first three years. Now entrepreneurs can focus more on their business without worrying about the tax part.
According to the report, under DIPP-recognised 5,350 startups at least 40,000 people have been employed. It further said that Startup India Hub has been established as a single point of contact for the entire startup ecosystem to enable knowledge exchange and access to funding.
As per the statement, the hub has resolved 75,643 queries pertaining to starting a business, access to incubation, and raising funds, among other things. Under the Fund of Funds for Startups (FFS, Rs 500 crore was released to SIDBI in 2015-16 and Rs 100 crore in 2016-17.
Last month, DIPP secretary Ramesh Abhishek in an interview said that the govt has been able to provide $242.7 Mn (INR 1,587 Cr) in funding to startups.
However, according to an RTI seeking the total amount of investment made by the government in these companies, SIDBI has received only Rs 600 crore. As on August 31, 2017, Rs 623.50 crore has been committed to 17 number of Alternative Funds (AIFs). Disbursement of Rs 68.13 crore has been made by 10 AIFs. These AIFs have invested in 72 startups, the document in Entrackr’s possession outlined.
The report was first published in Moneycontrol.