Sitharaman interacts with Incubators and Accelerators to gather feedback, address challenges faced

New Delhi, Jan 10 (KNN) The Commerce and Industry Minister, Smt. Nirmala Sitharaman, held a meeting with various incubators and accelerators to gather feedback, hear their concerns and address key challenges faced by them in the Start-up ecosystem.‘

This is in continuation to her previous initiative to reach out to various stakeholders of the ecosystem.

During the interaction on Monday, the stakeholders discussed various issues like Service tax exemption, umbrella recognition of incubators, fund requirement by start-ups etc.

Service tax exemption is being currently provided to incubators duly recognized by Government. The stakeholders said it should be extended to other incubators as well.

The concerns related to requirement of seed stage funding for Start-ups was highlighted.

The stakeholders demanded that Incubators should be given grant by Government to help Startups at the initial stages. E.g. PRISM under DSIR which gives a grant of Rs. 2 lacs for startups at the seed funding stage is extremely helpful; a similar seed stage funding from 5-10 lacs for startups was proposed.

The stakeholders also spoke about umbrella recognition of incubators, accelerators, co-working spaces and mentors as ‘Startup builders’

The Start-ups registered with incubators need to get their valuation done which is a financial burden on them, pointed the participants urging that the Start-ups below a particular threshold may be exempted from the same.

Further, the other points raised during the meeting were - Greater corporate engagement with incubators may be facilitated; Section 35(2AA) of Income Tax Act may be extended to incubators as well; A Central repository of all schemes and funds available under the Government for the benefit of start-ups should be created and more.

Recognizing that the marketing and funding support to start-ups is critical, the attendees demanded a separate fund for incubators especially through CSR mandate for corporates.

State Governments and municipal bodies may be requested to extend relaxed procurement norms to start-ups, they said.

The current FCRA regulations prohibit charitable trusts to use the foreign funds received by them as investment in start-ups as such investments are treated as speculation, pointed the stakeholders.

During the meeting it was pointed that a national survey can be undertaken to collate and address all challenges of start-ups on a common platform

The Commerce and Industries Minister assured that the department will take the suggestions forward by engaging with the ministries concerned.