The government may change the definition of a start-up following criticism that the current one that defines such companies as those that are less than five years old and have annual sales not exceeding Rs25 crore was too restrictive.
“We are finding that this definition needs to go through a change,” Department of Industrial Policy and Promotion (DIPP) secretary Ramesh Abhishek said at an event in New Delhi on Monday.
“Maybe we can have different periods for different types of start-ups… We can also have different criteria for turnover for different sectors… we would like to completely relook at the definition of start-ups which will be much more inclusive of the ground realities,” Abhishek said at a panel in IVCA’s Annual India Alternatives Conclave 2017.
The definition is crucial for young companies that aspire to receive government-sponsored venture funding and a host of other benefits—such as rebates on income tax and patents fee.
Abhishek said that while an overall change in definition is not immediately expected, DIPP is looking at the matter on a case-to-case basis.
The department has received feedback from start-ups in bio-technology and healthcare space seeking a relaxation in the age criterion to at least eight years, he said, adding that the Department of Biotechnology has been asked to gives its view.
He also said DIPP will allow relaxation in sectors and areas where start-ups present a valid case. “Currently, we are inviting feedback and as when we get feedback from other sectors, we will examine that,” he said.