Kerala startup policy for dialogue with regulators on crowd-funding options

The Technopark Technology Business Incubator (T-TBI) in Kerala will seek recognition as a new industry with National Industrial Classification (NIC) code.

It will strive to create a viable tax structure and mechanism to avoid double taxation of software products under service tax and sales.

LIAISON WITH REGULATORS

This is one of the major enablers of the Kerala Technology Startup Policy announced by the state government last evening.

The T-TBI will liaison with the Centre and SEBI/RBI to create optimal policies for crowd funding platforms for startups.

The master incubator would also oversee an innovation process to select startups to develop applications for public needs so as to encourage them to have a feel of the e-governance market.

Meanwhile, industry observers have aired scepticism of the initiative since it has come too late in the day from a government that has less than a year in office.

Technology incubators would be encouraged to expand to more niche themes, the policy statement says.

NICHE THEMES

These include Internet of Things; 3D printing; ‘IT for X’ in the areas of pharma, oil and gas, urban management, social media, mobility, analytics and cloud computing; fab-less semiconductors and electronics; animation and gaming; digital media entertainment; visual effects; printed and organic electronics.

Top 50 startups operating out of incubators would be identified and given a platform to meet and interact with mentors, funding support, product development, marketing and launch support to accelerate the number of success stories to create role models.

This programme would be an annual feature in due course.

The policy is stated to be valid for a period of five years from the date of its notification or till a new policy is formulated.

It shall be implemented under the guidance of Kerala State Innovation Council (KSInC) and the board of governors of T-TBI.

BROAD FRAMEWORK

On the whole, the policy seeks to unfold a broad framework for creation of a startup ecosystem in technology based startups across sectors in the state.

The policy is split into nine sections that are the strategic building blocks towards a world-class startup ecosystem involving infrastructure.

They include incubators and accelerators; human capital development; funding; state support; governance; public private partnership; scaling existing and establishing new incubators; and startup-bootup-scaleup model for moving fast from ideas to IPO.

Government-owned IT parks, industrial parks and SME clusters will have incubation facility for the sectors concerned.

The government will facilitate development of physical incubation infrastructure through public private partnerships and shall create support infrastructure for such as common testing labs, design studio and tool rooms.

ACCELERATOR PROGRAMME

It shall also establish at least one world-class accelerator by inviting global accelerators to set up their programmes in the state.

Banks and financial institutions will be encouraged to enhance and extend existing schemes of lending to the startups on convenient terms (collateral-free lending, soft loans and interest-free loans).

General permission shall be available for three-shift operations with women working in the night for startups, subject to such units taking the prescribed precautions in respect of safety and security of employees.

Incubators and host institutes shall be eligible for 100 per cent reimbursement of the stamp duty and registration fee paid on sale/lease deeds on the first transaction and 50 per cent thereof on the second transaction.

PATENT APPLICATIONS

For every employee recruited by a startup within a period of three years of incubation, an amount of Rs 25,000 per employee per year shall be provided for training.

The cost of filing and prosecution of patent application will be reimbursed to the incubated startup companies.

Startups that record a year-on-year growth rate of 15 per cent as per audited accounts shall be eligible to get a grant of five per cent on turnover, subject to a limit of Rs10 lakh within three years.

Private Partner in a PPP incubator will be responsible for creating a self-sustaining business model needed for the execution of the incubator after the support period given.

This will be a maximum of three years in case of service startups and five years in case of product startups from the date of their entry into the incubator.