2 yrs on, startup policy gets Chandigarh Administrator’s nod

Punjab Governor and UT Administrator Gulab Chand Kataria has finally approved the long-awaited startup policy after more than two years of deliberation.

The approval came during a presentation by the Industries Department on October 1. However, Kataria gave some suggestions to be included in the policy.

According to officials, Kataria emphasised the need to simplify the administrative procedure in the policy. The revised policy would be presented to the Administrator once the suggested changes are incorporated. A notification was expected by the end of this month, added the officials.

Key takeaways

• The UT Administration will set up a seed fund with an initial corpus of ~10 crore and a total corpus of ~50 crore over a period of five years.
• Incentives will be provided to woman-led units.
• Apart from financial support, the Administration will encourage capacity building for incubators by holding regular training sessions for managers and employees.
• It will also encourage co-working facilities. Registered startups can have access to co-working spaces free of cost or at subsidised rent for a period of 3 years or a limited period.

The Central Government has extended tax benefits for startups until March 2025. Under the Startup India initiative launched in 2016, startups established between April 1, 2016, and March 31, 2024, can avail tax rebates on their profits for three consecutive years within their first 10 years, provided their annual turnover does not exceed Rs 100 crore. The last Interim Budget had expanded this benefit to startups incorporated before March 31, 2025.

On September 3, 2022, the UT Administration unveiled its Draft Startup Policy with an aim to set up a dedicated startup fund for the city ecosystem. The primary objective of the fund would be to promote incubation centres, seed and scale-up funding for startups and provide other fiscal support to such units.

To plug the gap for early-stage startup financing in the UT, the Administration is going to set up a seed fund. This will be a grant-in-aid-based seed fund with an initial corpus of Rs 10 crore and a total corpus of Rs 50 crore over a period of five years.

The Administration will facilitate various initiatives to make the startup ecosystem inclusive for women entrepreneurs. For the purpose of incentive, a woman-led startup will be defined as a startup with a woman as founder, co-founder or CEO. A minimum of 33% of the seed fund interest-free loans proposed in this policy will be dedicated to women-led startups.

The Administration will partner with higher education institutions (HEIs) to set up state-of-the-art incubators or upgrade the existing ones. The UT will encourage incubators that identify industries to be promoted, considering the strengths and limitations of the city.

The Administration will also encourage co-working facilities offering seats on rent for startups and innovators on a pay per use basis. The startups would be able to access facilities such as high-speed Internet, power backup secured access, 24×7 security with CCTV surveillance, etc. Registered startups will be eligible to receive access to co-working spaces free of cost or at subsidised rent for a period of three years or a limited period.

Apart from financial support, the Administration will encourage capacity building for incubators in the network. This will be done through regular training sessions for incubator managers and employees along with support for exposure visits to leading incubation facilities in India and abroad for knowledge exchange on best practices. The Administration will partner with relevant ecosystem players for conducting exchange programmes for high-potential startups.