Answer:

The significance of start-ups for Indian economy is manifold:

♤ India needs 10 million jobs a year and Start-ups being the centers of innovation will enhance employment creation in economy when the manufacturing sector is down.

♤ With more start-ups India can aspire to be world leader in skilled labour more than an outsourcing destination.

♤ They will enable India to reap its demography dividend.

♤ They encourage competition in the market.

♤ They induce backward and forward linkages stimulating multi-sectoral development.

♤ They lead to formalisation of the work force.

♤ They have the potential to create demand within the country, which may last longer given the global economic prospects.

♤ They can provide a boost to the "Make in India" and other initiatives of the government.

♤ They have the potential to bring social change in the society by empowering the weaker sections.

The provision of Start-up policy are as follows:

♤ Self certification with regard to labour and environment laws. However, this must be done for all businesses and not just start-ups to improve ease of doing business.

♤ Startup India Hub single point of contact for the startup community.

♤ Mobile app and portal will allow startups to register in one-day.

♤ Legal support and fast-tracking patent applications: Startups entitled to 80 percent rebate in filing patents. However, corruption makes this difficult and IPR procedure must be made transparent, not just for startups but for everyone. The cost of filing an IPR has been kept very low for them, which is a welcome step.

♤ Faster Exit: To make it easier for startups to wind up operations in 90 days thus preventing stuck of funds.

♤ Tax exemption from capital gains but higher risk involved make this step nominal.

♤ Income tax exemption for a period of three years. But most start-ups become profitable only after 3-5 years.

♤ Fund of Funds of Rs 10,000 crore will support startups but, this is very small amount

♤ Credit Guarantee Fund to catalyse entrepreneurship by providing credit to innovators.

♤ Relaxed procurement norms especially in the manufacturing sector. But the nexus that exists in government procurement needs to be broken.

♤ Setting up of incubators and research parks across different educational institutes which must treat everyone equally, should not give preference to their alumni.

However, to make this policy successful the government needs to focus on the following:

♤ Creating infrastructure across the country like connectivity through roads, rails, electricity.

♤ Technology must be deployed at every level for reducing corruption and faster service delivery.

♤ Reduce red-tape from the administration.

♤ Streamlining of labour laws and wage payment issues.