Mumbai: The Reserve Bank on February 2, said it will take steps to help improve the 'ease of doing business' in the country and contribute to an ecosystem that is conducive for the growth of start-up businesses. The move is aimed at supporting the government's 'Start-up India' initiative.
"These measures will create an enabling framework for receiving foreign venture capital, differing contractual structures embedded in investment instruments, deferring receipt of considerations for transfer of ownership, facilities for escrow arrangements and simplification of documentation and reporting procedures," RBI Governor Raghuram Rajan said in the 6th bi-monthly monetary policy review.
Last month, Prime Minister Narendra Modi unveiled a slew of incentives to boost start-up businesses, offering them a tax holiday and inspector raj-free regime for three years, capital gains tax exemption and Rs 10,000 crore corpus to fund them. He also announced a self-certification scheme in respect of nine labour and environment laws and said there will be no inspection during the first three years of launch of the venture.
Also, a liberalised patent regime is being brought to help start-up businesses register patents, for which the fee will be slashed by 80 per cent. India, which has the third-largest number of start-ups globally, will also support the ventures by removing the criteria of experience and turnover for bagging government procurement contracts.
Modi said profits earned by start-ups will be exempt from payment of income tax during the first three years of business. To boost financing, a 20 per cent tax on capital gains made on investments by entrepreneurs after selling of assets as well as government-recognised venture capitalists will also be exempt.
