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Modi’s Start-up India Sputters, 82% Say They Did Not Get Any Benefits: Report

IANS |
A total of 24% start-up founders said they would close their businesses in the year ahead, according to online survey by social media platform, LocalCircles.
Start-up India

Image for representational use only; Image Courtesy : IndianWeb2.com

NEW DELHI: Around 82% of start-ups in the country are yet to receive any benefit under the Centre's Startup India initiative, a report said on Thursday.

"Only 18% 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 % start-ups or SMEs felt that they did not receive any benefit from the highly publicised scheme," said the LocalCircles Annual Startup Survey 2019.

LocalCircles, a community social media platform, conducted the survey among over 15,000 start-ups, SMEs and entrepreneurs in the country, it said.

The Startup India initiative was launched in January 2016 with an aim to support the growth of start-ups in the country by providing incubation, funds and tax exemptions among other benefits.

Further, bringing the glare back to the "angel tax" issue faced by start-ups, the survey showed that about 32% start-ups received multiple notices from the Income Tax Department in 2018.

"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," the report said.

"32% said they had received multiple notices while 6% said they had received one notice, while 62%  said they did not receive any notices."

The issue of tax notices to start-ups received public gaze after several start-up founders took to social media after receiving tax notices.

This led to the government ordering the Income Tax (IT) Department on December 24 not to take coercive measures to recover the outstanding angel-tax dues.

The order issued by the Central Board of Direct Taxes said the matter was under consideration and directions were issued to the IT Department not to take any coercive measures to recover the outstanding demand till further instructions.

However, according to the report, issuance of assessment orders against start-ups continued despite the government orders. 

"Though an order was issued to not take coercive measures to recover the demand, assessment orders continue to be issued against start-ups," it said.

About 97% of the people surveyed felt the IT Department officials should be educated on start-up valuations.

On the outlook for the year ahead, 71% of start-up founders said they would like to grow their organisation while 24% said they would close their businesses and the remaining 5% intend to sell their business.

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