The Government of Delhi aims to create business leaders and entrepreneurs and make Delhi the "start-up destination of the world". With this aspiration at the helm, on May 5, 2022, the Delhi Cabinet approved and announced the "Delhi Start-up Policy" ("Policy"). The Policy aims to provide an enabling ecosystem for an innovation-based economy to help Delhi become a global innovation hub.

The State Government under the Policy is looking to provide fiscal and non-fiscal incentives, collateral-free loans, and free consultancy from subject experts to the youth of India who wish to launch their own entrepreneurial ventures. This Policy aims to focus on such youth by teaching entrepreneurship in schools under the "Business Blasters Programme". The initiative will also be replicated at the college level and students who have ventured out to establish their own start-ups while studying in Delhi's Government colleges will be able to seek up to two years of leave to build their businesses.

The Policy has been inter-linked with the objectives set forth in the State's budget for the period 2022-23. The budget focuses on businesses and employment generation. To help improve the economy, the government proposes to renovate markets, launch the Dilli Bazaar Portal, host the Delhi Shopping Festival, and a host of other initiatives. The budget mentions that Delhi is the Start-up Capital of India, and the government has prepared the Policy to ease the process for setting up of start-ups in Delhi. The process will include setting up incubation centres, organizing conferences for marketing, mentoring and investment, getting entrepreneurs connected with banks and investors. A provision of ? 50 crore has been proposed in the Delhi State budget 2022-23 for the Policy.

The Delhi Government is also promoting an environment that is conducive for businesses and their growth. The government has under the Policy proposed that it will pay up to 50% of the rent of a start-up's office lease and will reimburse a portion of the salaries that the start-ups will pay to their employees. Some of the other benefits to be provided to start-ups under the Policy are reimbursement by the Government for costs incurred for applying for patents, copyrights and trademark registrations. By creating an enabling ecosystem for an innovation-based economy, the State aims to encourage, facilitate and support 15,000 start-ups by the year 2030 and generate new avenues of employment. Set forth below are the key provisions introduced under the Policy:

The Governing Committee

The Delhi Government announced that it will form a monitoring committee to oversee the Policy. This committee will be headed by Delhi's Finance Minister. The composition of this committee will be – 85% representatives from the private sector, 10% from the educational institutions and 5% from the government.

A 20-members Start-up task force will also be set up to oversee the registration of start-ups. This task force will have a government official, academics, as well as business and trade representatives.

A nodal agency will be set up to have a cell under the supervision of the Industries Department to implement the Policy. It will have direct contact with the start-ups and stakeholders. The main function of the committees will be to evaluate and approve the applications of recognized entrepreneurs, start-ups and incubators.

Free of Cost Services

It is often observed that those who want to start a business end up spending 90% of their time on paperwork and official formalities. This Policy will help overcome this hurdle by empanelling agencies and professionals to aid the start-ups. The Delhi Government will onboard a panel of lawyers, experts, CAs and other such professionals who will provide free of cost services to the start-ups. Such experts will also help start-ups in marketing, developing social media, gathering investments, filing taxation, etc.

Fiscal Incentives

The Government of Delhi, as part of the Policy, has also introduced certain fiscal incentives for start-ups that include:

  • Reimbursement on lease rentals up to 50% or Rs 5 lakh per annum;
  • Reimbursement grants for filing patent up to Rs 1 lakh per annum (Indian) and up to Rs 3 lakh per annum (international);
  • Reimbursement for exhibition stall/rental cost of up to 100% for women/ underprivileged/ differently abled persons and up to 50% for others or Rs 5 lakh per annum;
  • Monthly allowance towards operational/ employee cost of up to Rs 30,000 per month for one year;
  • Financial grants towards capital and operational expenditures in the establishment; and
  • Financial support for procurement of key software up to 50% of the total cost.

Non-Fiscal Incentives

The government would handhold young entrepreneurs and help them seek the best advice free of cost from the panel of experts in the monitoring committees. Other non-fiscal benefits include developing a conducive curriculum for students, facilitating strong linkages between the start-up and industry association, facilitating participation of companies for subsidised subscriptions of technology offerings, organising fundraising events and access to government data to drive e-governance pilot projects.

Conclusion

The State Government aims to foster entrepreneurial spirit through a robust support mechanism and key focus on areas that include education and education technology, healthcare and health technology, tourism and hospitality, transportation and logistics, automotive, e-governance for business and citizen connect, artificial intelligence (AI), machine learning (ML), Internet of Things (IoT), Software-as-a-Service (SaaS), fintech, e-waste management, robotics & automation, green technology, bio-pharma and medical Devices and Information Technology (IT) and Information Technology Enabled Services (ITES) etc.

By presenting a host of incentives to entrepreneurs, the Delhi Government has commenced a formidable journey. The Policy, when notified, we hope will encourage the younger generation to showcase their entrepreneurial skills and usher in a wave of entrepreneurship and start-ups in Delhi.

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