Almost 82 per cent of Indian startups have not yet received any benefits under the Narendra Modi’s much-promoted Startup India scheme, as per LocalCircles Annual Startup Survey 2019. LocalCircles is a community social media platform which conducted a survey of 15,000 Indian startups, small and medium enterprises and entrepreneurs in the country.
“Only 18 per cent start-ups and SMEs (small and medium enterprises) in the next poll claimed to have benefited from the Startup India Mission. This means that a huge 82 per cent start-ups or SMEs felt that they did not receive any benefit from the highly publicized scheme,” said the report.
Launched in January 2016, the Startup India initiative aimed at supporting the growth of startups in India and provide incubation, tax exemptions as well as adequate funding to help them bolster.
Earlier the government introduced “angel tax” which created a sense of rage among the startups. The survey counted on the problem and reported that around 32 per cent of the startups received several notices from the Income Tax Department in 2018 related to the non-payment of Angel Tax.
“The angel tax has not made the life of an entrepreneur any easier with many SMEs and start-ups receiving income tax notices this year. 32 per cent said they had received multiple notices while six per cent said they had received one notice. 62 per cent said they did not receive any notices.,” the report said.
After several startups received multiple notices from the IT Department, the startup founders turned to social media. This received public support after which the government ordered the IT Department on 24th of December last year not to take strict measures to recover the pending angel taxes.
Central Board of Direct Taxes (CBDT) issued an order denoting the matter to be under consideration. However, the report suggests that the startups continued to receive assessment orders despite government intervention. More than 97 per cent of the entrepreneurs felt that the Income Tax officials were lacking knowledge of startup valuations and should be educated about the same.
When asked about the plan for the next year, 71 per cent of startup founders said that they will continue to thrive to grow their firms while 24 per cent dedicated to shutting down shops. You might be interested in reading about these 11 startups that shut their operations in 2018. The remaining five per cent said that they were planning to sell their startups.