`Start-up India' to herald leissez faire in India

The government today launched an action plan on 'Start-up India,' envisaging for itself the role of a ''facilitator'' for investments, promising to cut the maze of red tape that has hampered the country's economic growth for decades and squeezed employment opportunities.

The government also promised to put in place a new tax regime for startups as it looks to unshackle them from the regulatory regime for large companies.

Prime Minister Narendra Modi is due to announce an action plan for boosting the startup eco-system in the evening.

Addressing the opening session of 'Start-up India' event, finance minister Arun Jaitley said that some of the new tax rules would be announced through executive orders, while some of them would be done in the budget.

Speaking to a gathering of entrepreneurs who began queuing up outside the Vigyan Bhawan at least an hour in advance for the day-long "Start-up India" event, the finance minister said the government intends to give startups complete freedom of operation.

"Once the start-up movement picks up, it will be the eventual freedom from the state," he said, adding that the government wants startups to emerge as an alternate engine of growth at a time when the global economy posed several challenges.

"We ostensibly broke away from "license raj" in 1991, conceived with idea that government will decide which businesses can run."

"Start-Up India will change conventions. Government will merely be a facilitator for start-ups," said Jaitley.

He further said that the PM's own idea was that start-ups need to be encouraged. Both the banking system and government will make the resources available.

He said the start-ups are fully conscious of the adverse situation in which they are struggling to keep respectable growth rates in Indian economy.

"World universally recognises us as probably fastest growing amongst the major economies, but then we are not without our own challenges," he said.

But, he said, ''We can take a limited satisfaction, that even in a crisis like situation in the world, we are growing much faster.''

Jaitley pointed out that the Narendra Modi government has been pursuing a policy where more freedom was being given to companies, which was evident from fewer businessmen visiting the finance ministry and the pile of files in Foreign Investment Promotion Board (FIPB) coming down.

Besides "Start-up India", the finance minister said the government will launch "Stand-up India" scheme under which, bank branches will lend to entrepreneurs belonging to SC/STs and women.

"On Independence Day Prime Minister (Narendra Modi) announced the Stand-up India scheme. The Stand-up India would be separately launched. It is a programme, which envisages women entrepreneurs and entrepreneurs belonging to the SC, STs (to get funding from banks). These were the segments which were not throwing up entrepreneurs.

"Each bank branch, public sector or private sector, would actually adopt one in the SC/ST category and one in the women category. So they will adopt two such entrepreneurs and fund them to set up establishments," he said.

It is expected that almost 3,00,000 new entrepreneurs will be created through funding of manufacturing or trading establishments over the next two years.