In a surprising announcement shocking and bringing joy to quite a number of young techies, Indian Prime Minister Narendra Modi announced earlier this week that his government would be implementing a tax holiday for the tech start-up sector of the country, to boost one of India’s fastest growing industries in an effort to kick the year off with a powerful boost to India’s economy.
The PM made his announcement to an audience of more than a thousand, at the Vigyan Bhavan plenary hall in New Delhi. Attending tech entrepreneurs and experts also got the chance to meet with and interact with the country’s Minister of State for Finance Jayant Sinha, Commerce Minister Nirmala Sitharman and Finance Minister Arun Jaitley.
Three-Year Tax Holiday Announced for Tech Start-Ups
The event also featured tech personalities such as Travis Kalanack, the founder of the carsurfing service Uber, which has been making international headlines for its disruption of the taxi industry and unfortunate incidents between drivers and passengers, alongside mass success in several cities around the world; and Adam Neumann, founder of WeWork, a shared workspace community that has been planning its first foray into the Indian market and announced its intentions at the event.
PM Modi also announced that, apart from the tax holiday of three years, start-ups would be entirely exempt from capital tax as well. However, it didn’t end there – companies would also be allowed to operate freely without the hassle of red tape that usually hounds a starting company, and all start-up tech companies would be eligible to part of an INR 10,000 crore investment that the government is making into the sector, so long as they subscribe and pass a self-certification scheme.
India Is Undergoing a Major IT Boom
Without the massive helping hand that the PM gave the industry, India’s tech sector has been exploding. According to statistics on Statista, India’s IT sector contributed to eight percent of the country’s entire GDP in 2012-2013 – a GDP of roughly INR 135 trillion, according to the World Bank. Since then, India’s software market alone has gone from under INR 271 billion in revenue annually, to roughly INR 360 billion forecasted for this year.
Start-Ups Also Made Eligible for Government Contracts
Among more news, the PM also announced an 80 percent decrease in fees necessary for patent registration, to further help the industry. “Startup India is more about what the government should not do than what it has been doing,” Modi said, highlighting a pure capitalist embrace of entrepreneurship and trust in the disruptive nature of the sector’s growth rate.
“A start-up is born where there is a compassionate need to serve society,” the PM remarked. He made an important note of risk in his speech, stating that risk takers were the winners in society through analogy of Columbus and the Spice Route. “A start-up is not just about mobiles and laptops. It does not only mean a company with billions of dollars and 2,000 employees. If it is able to provide employment to even five people, it would help in taking the country forward,” the PM finished. For more news, headlines in Hindi, please visit Dainik Bhaskar.