bihar startup policy 2017 - nitish kumar


Rolling back the Startup Policy 2016, the Bihar Government has now enforced a new startup policy in the State – the Bihar Startup Policy 2017. As mentioned in an official statement, “The State has set up a Trust, with an initial corpus of $76 Mn (INR 500 Cr), which acts as the nodal agency for implementation of this policy.”

The Trust will be responsible for the enforcement, management, and monitoring of the policy within the state. The Government also planned to create an eco-system transforming the job-lucrative education system to business-lucrative education system.

The vision of the Bihar Startup Policy 2017 is to enable Bihar to emerge as the most preferred destination for start-ups and entrepreneurs by leveraging the potential of local youth through a conducive startup ecosystem for inclusive growth in the State.

The prime focus is on the basic four pillars commonly known as YUVA. That means; YES to Startups (Awareness, Networking, and Mentoring Campaign), Unleash Regulatory Enablers for Supporting Startups, Vibrancy in Education System to encourage and facilitate Startups & Access to financing & incubation support.

Bihar StartUp Policy,2017 will be effective from the date of Notification and will remain in operation for 5 years.

Objectives of the Bihar Startup Policy 2017

1. Introduce, promote and encourage entrepreneurship education and career amongst the youth through various programs like “Udyami Bihar, Samridh Bihar Campaign”, Entrepreneurship Awards, Innovation Challenges and Business Plan Competitions etc.

2. Facilitate development of Entrepreneurship Development Centers in Divisional Towns and Nagar Nigam(s) and Entrepreneurship Facilitation Centers to increase awareness and promote entrepreneurship amongst the youth.


3. Create a sector-agnostic policy, enabling innovation in any and all possible sectors of development focusing on initiatives that leverage natural resources and human capital of the State, innovative and disruptive ideas with huge growth potential and initiatives in the areas which create multiplier impact.

4. Encourage Entrepreneurship through education by introducing learning modules in the university/schools, MOOC (Massive Open Online Courses), Internships amongst others.

5. Facilitate development of new and support expansion of existing Incubators/common infrastructure spaces.

6. Provide a one-stop comprehensive portal for startups to access financial support (SEBI registered- Alternate investment funds, Empanelled Angel Investor, etc.), regulatory support, Network of mentors and Empanelled Project Management Consultants.

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7. Enable hassle-free and time bound statutory clearances for startups.

8. Create a platform for accessing multiple avenues that provide financial support and encourage investors through incentives to invest in Bihar based startups.

9. Create an inclusive policy which embarks groups like SCI ST, woman enterprise and differently- abled.

10. Provide appropriate institutional support to enable the nurturing of startups.

Some Regulatory Measures Taken

Startup Bihar Portal

Start-up ecosystem needs a single platform for interaction and collaboration with each other. In order to establish a single platform for interaction and information sharing of various stakeholders, a Startup Biharportalshallbe launched.

This portal shall provide instant accessibility to startups for:

a. Accessing interactive tutorials for registration process and checklist for the various clearances required with specified timelines.

b. Registering with relevant authority and filling various State Level compliances at State level through standardized forms.

c. The portal shall also be integrated with other Government of India sponsored Startup Portals for connecting with various stakeholders of the ecosystem.

d. Interacting and collaborating with various stakeholders viz. Registered network of mentors and professional experts, incubators, academia, empanelled Project Management Consultants and angel investors, SEBI-registered AIFs (Alternate Investment funds) and other stakeholders.

e. Empanelledmentors of networks to startups having a potential for growth and scalability.

f. Accessing various State Government Schemes and Incentives available for Startups. The portal shall also be made available in form of a mobile app and supported by a Toll-free helpline to facilitate application/ assistance. Clearances for registration/ application shall be ensured in a time bound manner


Zero Cost For Filing Patents – Domestic & Foreign

In order to safeguard the Intellectual Properties of startups and provide support for commercialization, the government will bear the entire cost of registration. Also, additional financial assistance in the form of reimbursement for awarded foreign patents towards filing fees will be provided.

Single Window Clearance Committee

All statutory licenses/clearances required by startups (if not exempted otherwise under this policy) shall be facilitated on a priority basis.

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Financial Management Company

The Trust shall set up a Financial Management Company to carry out the financial operations of the Trust. The Financial Management Company shall disburse incentives, loans and other financial assistance to the startups as decided by the Trust.

Access To Funding and Financial Support

Incubation centers are crucial for nurturing promising Startups. They provide access to the mentoring network, market network, shared physical infrastructure etc. Creation of Physical Infrastructure generally requires large capital investments.

Considering this, following incentives/financial assistance shall be provided to startups:

1. Financial assistance for setting up of new incubators and expanding State supported Incubators.

2. Reimburse cost of incubating a startup maximum up to Rs 2 Lakhs per incubatee to Government recognized private / state supported incubators.

3. Fiscal incentives to Incubators @2%of the investment received by its incubatee from SEBI registered AIFs (AlternateInvestment Funds) into Bihar-based startups.

4. Fiscal Grant to State Supported Incubators @3% of the investment received by its incubatees from SEBI registered AIFs (Alternate Investment Funds) or Grant received from Government of India for promoting technology based (IPR)startups and @5%for startups in social sectors providing solutions to public service access problems in Bihar in areas like health, education, and nutrition etc.

5. The Government shall provide financial assistance to match the funding raised by Incubator(s)from Government of India and Multilateral donor agencies on 1:1 basis on same terms and conditions.

State Supported Host Institutes

The pilot institutes shall extend all possible handholding support to establish incubators in other State Supported Host Institutes in a phased manner. The State Government shall from time to time declare new institutions as State Sponsored institutions under this policy.

  1. Indian Institute Of Technology (IIT), Patna
  2. National Institute Of Technology (NIT), Patna
  3. Rajendra Agricultural University, Pusa
  4. ICAR Research Complex for Eastern Region, Patna
  5. National Institute of Fashion Technology (NIFT), Patna
  6. Birla Institute of Technology, Patna
  7. Central Institute of Plastics Engineering and Technology (CIPET), Bihar
  8. Upendra Maharathi Institute, Patna
  9. Chandragupta Institute of Management, Patna
  10. Tool Room and Training Center, Patna
  11. BiharAgricultural University, Sabour
  12. Apparel Training and Design Centre, Patna
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Seed Funding Support

A Seed Grant uptoRs 10 Lakhs per start-up as an interest-free loan for 10 years shall be provided to startups. This financial assistance shall be released on achieving milestones/phases and performance parameters defined by Incubation Center and the trust. The financial assistance shall be provided to startups for validation of the idea, prototype development, assistance towards traveling costs and carrying out field/ market research/ skill training/ marketing and initial activities to setup a startup etc. The actual amount of funding shall be based on the assessment made jointly by the incubation center and the Expert Committee.The loan shall be returned after 10 years. An amount equal to 5% of the seed grant shall also be contributed by the Incubatee into the startup.

Early Stage Funding Support

1. Free of cost Valuation for Startups.

2. Facilitate access to Angel Investors.

3. A success fee @2% of investment shall be provided to startups for mobilizing investments from state registered angel investors towards early stage funding.

4. A financial assistance equal to the amount invested in startup by the Angel Groups and 4w Category I Alternate Investment Funds shall be given as loan to the Startup. The rate of interest and terms and conditions of the loan shall be notified by the Trust from time to time.

Scale-up Funding Support

1. The Trust may participate in SEBI registered AIFs (Alternate Investment Funds) and Venture Capital Funds, up to 25% as Limited Partner. The Venture Capital Fund so created shall invest at least 50% (i.e. equal to twice the contribution made by trust in the VC Fund) in startups located in Bihar.

2. The Trust shall facilitate listing and public issue of Startups in collaboration with National Level Stock Exchanges such as BSE/ NSE. Incentives/ provisions under Bihar Industrial Incentive Policy in force will be available to startups. However, the incentive for the same component cannot be claimed from more than one scheme. Efforts will be made to leverage relevant benefits available under various schemes of Government of India.

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