A Booster Shot ?
Business
Line ( 05 Sept 2016 ) carries a news report titled :
" Start ups
may get a Booster Shot of fresh incentives "
It says :
" An inter-ministerial committee headed by DIPP Secretary ,
Ramesh Abhishek , and comprising senior
officials from the NITI Aayog and from
Ministries and Departments such as Finance, Labour , Environment , HRD and MSME
, will meet within a fortnight to discuss a possible new stimulus for Start ups
The official said ,
We will to push for some more tax incentives in addition to the
three year tax holiday, lower compliance requirements especially in labour and
taxation and a relaxation in listing norms
The line Ministries will take forward what the inter-ministerial
committee feels is feasible so that the new rules can be worked out . We are
examining the tax policies of countries such as Argentina , Australia , Chile ,
Finland and Israel "
Considering that nearly ONE YEAR
after the launch of the Start Up
initiative , so far only 3 Start Ups
have managed to qualify for the tax holiday , this is very good news
But trying to compare what other countries have done to boost
their Start Ups , has only , a very
limited learning !
We
have,
# A history of 60
years of total neglect of the Start Ups
, under a license / permit raj
# 12 million
young people joining our work force each year ( with only 10 % finding jobs )
# 3.5 million
graduating from colleges , each year ( of which , only 20% are found " Employable
" by industry
)
I
once more request the Committee - and the concerned Ministries - to find a
" Productive Vent "
for the enormous / volatile energy , trapped inside this " Volcano of Unemployed Youth "
My
own suggestions are contained in my following blogs ( sent earlier as email
concerned Policy Makers ) :
--------------------------------------------------------------------------------------------------------------------------------
Saturday, 16
January 2016
Thank you , Narendrabhai , for
the Start Up Action Plan announced last evening
I am glad that some of my
suggestions ( sent to Ministers / Secretaries ) over the past 2 years , have
been incorporated in the ACTION PLAN ,
in respect of :
* Self
Certification
* Simplified
Registration thru Mobile App
* Tax
Exemption for Capital Gains
*
Entrepreneurship Program for 10 lakh students
* No Corporate Income Tax for 3 years
* No Corporate Income Tax for 3 years
You will find my
detailed suggestions covering these points in following blogs at :
Very likely , your initiative
may see the birth of ten thousand new start-ups in 2016-17, which , together ,
might generate one lakh jobs
In itself, this will bring a
new dynamism to India's Economy
But that will still fall far short
of 12 Million ( 120 lakh ) youth joining the work-force each year
Can all of these youth become
Start Ups ?
It is entirely possible
All you need to do is to
implement my following suggestion, described in ,
" A
New Economic Order / Start Up Act - 2015 " / 12 Sept 2015
" :
SUGGESTION
*
Although all Start Ups will need to file annual Income Tax returns ( with full
disclosure of income / expenses / profits / sources of funds etc ) , it will
not be required to pay any Corporate Income Tax for the first 10 years of
its existence
*
A Start Up will be free to raise funds from any source (
Individuals / Companies / PE funds / VCs / Angel Investors / Religious Trusts
etc )
* 100 % FDI will be permitted in Start Ups
* A Start Up can receive loans or equity and be able to accept fixed
deposits . It can also give loans to individuals or other Start Ups or invest
in other Start Ups by way of equity
*
There will be no restrictions on what interest ( on loans / FDs )
that a Start Up may pay nor any restrictions on dividends it may
declare
The dividends declared by Start Ups will not attract any Income Tax
* As
far as the persons / companies etc providing funds to Start Ups ( by way of
loans or equity ) is concerned , no questions will be asked re
their source of funds
WHAT WILL
HAPPEN , IF IMPLEMENTED ?
*
Billions of rupees worth Black Money will flow into these Start Ups - money
which is currently lying unutilized or locked up in unproductive assets
* Within
3 months , thousands of Venture Capital Funds will be born , exclusively for
funding of Start Ups ( You know who will set up these VCs ! )
*
With NO Income Tax to be paid , Start Ups will conduct all transactions through
cheques ( receipts / payments )
*
GST collections will go up
* Domestic Savings Rate will go up
* Since
millions of ( Black Money holding ) individuals / businesses will come forward
to fund these Start Ups , lending pressure on banks will go down
*
Who knows , Start Ups may get into the business of Assets Reconstruction and
relieve banks of NPAs !
*
With locally / domestically stashed Black Money flowing into the economy , our
dependence on FDI will go down
*
Corruption will decline drastically
Dear Shri Narendrabhai :
It is still not late to incorporate
my suggestion in forthcoming Union Budget on 29 Feb 2016
This
is your opportunity to ,
* Dream BIG
* Enable millions
to dream big
* Unleash the
Entrepreneurial Genome of India's Youth
* Make 21st
Century , an Indian Century
* notwithstanding
the opposition in Rajya Sabha
--------------------------------------------------------------------------------------------------------------------------------
05 Sept 2016
www.hemenparekh.in / blogs
hemen
parekh
Marol
, Mumbai , India
(
M ) +91 - 98,67,55,08,08
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