Startups can look forward to spending less time in complying with various regulatory requirements, as the Department of Promotion of Industry and Internal Trade (DPIIT) plans a slew of measures to bring about ease of doing business in India. If implemented in the right spirit, compliance time can be brought down to just one hour per month for startups.
With the elections paving way for the new government to assume charge, a renewed thrust can be expected to boost the startup ecosystem.
Startups have to comply with a number of requirements such as GST filings, tax returns and other local laws every month, a DPIIT official was quoted as saying in an agency report. Compliance to these processes involves a lot of effort, time and cost and is draining for the startups with limited resources.
With the efforts to limit the compliance time to just one hour per month, startups shall have enough time to focus on their core activity. Besides, it shall help create a stronger startup support ecosystem in the country.
The proposal forms part of the Startup India Vision 2024 document prepared by DPIIT for the new government to encourage upcoming entrepreneurs.
In all, the vision document has lined up eleven measures for easing the regulatory burden on startups. The other proposals include setting up of a regulatory sandbox or innovation hub to help fintech companies; tax incentives for investments in startups, reduction in GST rates on alternative investment fund management services, and amendment in income tax laws pertaining to the sale of residential properties and carrying forward of losses.
It also proposes to tax ESOPs as it is being used by startups to attract talented employees from larger corporations. It saves them from the immediate cost of paying employees high cash salary.
To improve debt financing for startups, it also moots a specialist team within banks or a separate private agency to assess start-up loan applications. The parameters are expected to display a better understanding of startup operations and needs.
The vision document aims at facilitating setting up of 50,000 new start-ups in the country by 2024 and creating 20 lakh direct and indirect employment opportunities.