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Startup Policy 2019




1.1  Puducherry is  a  Union Territory with a  total area of  490 sq.kms.   It consists of four regions viz., Puducherry, Karaikal, Mahe  and Yanam.  The main land  Puducherry  with  an  area  of  294  sq.kms.  is situated 165 kms. south of Chennai in the Coromandal Coast of Bay of Bengal. Karaikal with an area   of  157  sq.kms.  is  situated   about  140  kms. south  of  Puducherry  in  the  Coromandal  Coast.  Yanam with   an  area of 30 sq.kms. is situated near Kakinada of  Andhra  Pradesh  in  the  mouth of Godavari River. Mahe is  having  a  total  area  of  9  sq.kms.  near Thalassery, Kerala.  The  Union  Territory  of Puducherry  is  having a total population of 12.5 lakhs as  per  the  2011  census.  The  literacy  rate of Puducherry is a thumping 86%.  The  Educational  and  Health  care facilities available at Puducherry is at par with any major developed city of India. Puducherry is well connected with rest of India through road, rail and air connectivity. Tourism is the thriving Industry at Puducherry contributing most to the economy. Puducherry being an erstwhile French Colony has a considerable  population with  proficiency  in French, Tamil and English are the major  and  official  languages. Telugu and Malayalam are spoken at  Yanam  and  Mahe  respectively. The combination of its location, literacy rate, tourist potentiality, skilled workforce, coast facing, dry port etc., proves Puducherry as a conducive place to promote entrepreneurship and Startups.

1.2   Startup Policy is a flagship initiative  of the Government, intending    to build a strong eco-system  for  nurturing  innovation  and  Startups that will drive sustainable economic growth and generate large scale employment opportunities. The Government through this initiative  aims  to empower Startups to grow through innovation and design  with  respect to the digital/technology sector and extend to a wide array of sectors including agriculture, marine, manufacturing, information technology, social sector, healthcare, education, etc.

1.3  On the sound footing of the new Industrial Policy, 2016, of Puducherry and to rekindle the glory of the past and to achieve the National mission of innovation  and  startups,  Startup  Policy  proposes  to achieve the goal through effective administration across the following areas :-
        o    Simplification and Handholding;
          Funding Support and Incentives; and
        o    Industry-Academia Partnership  and Incubation.

1.4  The Government of Puducherry, being a proactive administration and strengths in good infrastructure, communication, connectivity, serene industrial ambience and is well poised to play the leading role in promotion of startup, at par with the pioneers.


2.1  To create a world-class startup supporting  ecosystem   in  this Union Territory through pro-active services, strategic investment, effective administration and policy interventions to ease the ambience  for  startups,  to provide good quality of life for people of Puducherry.


3.1  The Startup Policy is aimed at building a conducive Startup ecosystem,  providing  financial  and  technical  support  to  aspirants  in   a time bound manner and implementing a simplified, supportive and self-regulative system  that is entrepreneurship friendly.

3.2   Have to dream before the dreams can come true for new India, where new generation products and services can be accomplished by poising the strong startup ecosystem. It  would  build  multiplier  effects on employment generation and social transformation, escort to the prosperity of the Union Territory of Puducherry and the Nation as a whole.


4.1   To endeavor to promote a congenial, innovative and supportive ecosystem through pro-active initiatives;
4.2   To establish World class  Incubators/Accelerators  equipped  with all the required infrastructure and leading industrial practices;
4.3   These incubators shall be the mix of Micro  Small Medium Enterprises, Tool room, Private Companies, Colleges and proposed Public Private Partnership mode Centres;
4.4   To endeavor that every Engineering Colleges to have the incubation facility to foster innovation and entrepreneurship;
4.5   To enhance the quality standard of  talent  pool  and  to  create better employment opportunities at all levels relating to Startups;
4.6   To instill and foster innovative ideas in the field of Science and Technology among students;
4.7   To encourage educated youth to take up startups;
4.8   Pro-active engagement of academia and industry to  create  the  right environment to provide the requisite  impetus for  the  growth of incubators and startups;
4.9   To provide adequate incentives  and resources  to  startups, facilitators, mentors and investors to promote startup culture  in this Union Territory; and
4.10 To generate new avenues of employments through Startups.


The policy is designed to focus on the following key areas :-

5.1    Information and Communication Technology (ICT).
5.2    Biotechnology, Bioinformatics and Healthcare.
5.3    Cyber Security and Protection.
5.4    Internet of Things (IoT) Solutions.
5.5    Software Products and Mobile Technology.
5.6    Big Data.
5.7    Electronics System Design and Hardware Sector.
5.8    Robotics and Automation.
5.9    Virtual Reality.
5.10  3D Printing and Industry 4.0.
5.11  Artificial Intelligence (AI).
5.12  Electronic System Design and Manufacturing (ESDM) based product development and services.
5.13  Information Technology for the areas of garment and crafts,  mining, Small Medium  Enterprises manufacturing  and Small Medium Enterprises services.
5.14  Clean Tech and Renewable Energy.
5.15  Bio Pharma and Medical devices.
5.16  Agriculture and allied fields.
5.17  Automotive (Electric Vehicle, Autonomous Cars and Connected Vehicles).
5.18  Rural Infrastructure and Services.
5.19  Educational Gadgets and Aid.
5.20  Nanotechnology and Composites.
5.21  Water and Sanitation Oriented Products.
5.22  Disruptive Ideas/Technologies in any sector.
5.23  Components for Space Technology.
5.24  E-Commerce, Digital Marketing and New Business models.
5.25  Socio Economic service activities.
5.26  Marine processing and Marine Technologies.


6.1  STARTUP : Startup is an entity involved in building scalable product  or  service building a  positive  impact in  the society, where the  solution  is indecisive and success is  not guaranteed. An entity shall be  considered  as a ‘Startup’ :-

       a.    If it is incorporated as a private limited company (as defined in the Companies Act, 2013) or registered as a  partnership firm (registered under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) in India;

       b.   Up to a period of ten years from the date of its incorporation/ registration;

       c.    If its turnover of the entity for any of  the  financial  years  since incorporation/registration has not exceeded one hundred crore rupees;

      d.   An entity or  any  individual  or  group  of  individuals  are working  towards  innovative  ideas  or   concept,   development or  improvement  of  new  products  or  process  or  services driven by technology or intellectual property  or  if  it  is  a scalable business model with a high potential of employment generation or wealth creation;

       e.  If it meets the definition of Startup as prescribed by the Government of India, from time to time; and Provided that an entity formed by  splitting  up  or  reconstruction of an existing business shall not be considered a ‘Startup’.

6. 2  INCUBATOR : Incubator means any organization engaged in nurturing the growth and success of entrepreneurs  with  innovative  ideas, through an array of technical and  business  support,  resources  and services like physical space,  capital, coaching and mentoring, common services, market linkages and business management services.

6.3  CO-WORKING SPACE : Co-working space is a service provision model that involves  individuals  and  startups  working  independently   or collaboratively in shared office space with necessary office equipment and dedicated internet facility.

6. 4  DPIIT : The Department for Promotion of Industry and Internal Trade under the Ministry of Commerce and Industry, Government of India who is responsible for the Startup India  initiative  and recognize  the Startups through online registration.

6.5 INNOVATION : The process of translating an idea, concept or invention into a product, process or a service that creates  value  for  which consumer will pay. Innovation involves deliberate application of information, imagination and initiative in deriving greater or different values from resources, and includes all  processes by  which  new ideas  are generated and converted into useful product, process or service.
6.6  NODAL AGENCY : Nodal Agency means reputed  Government  as well as other Institutions/Organizations as approved by the Startup Council (para 7.1) for certifying Startups.

6.7  ATAL TINKERING LAB (ATL) : ATL is a work space in schools where young minds can develop a  shape  to  their  ideas  through  aids  like do-it-yourself kits and equipment on Science, electronics, robotics, open source microprocessors/boards, sensors, 3D printers and computers.

6.8 MARKETING EXPENSE : Marketing Expense shall be the expense towards meeting the following:-

      1.    Media charges to promote the product or service across digital, electronics, print media; or
      2.    Development charges of  creatives,  jingles,  brochures,  etc., as may be required; or
     3.    Cost of setting up stall at National/International business exhibitions along with the economy class travel  and  hotel  stay for the duration of the event for two individuals working with the startup for at least three months, subject to prior approval of the Startup Cell; or
      4.    Sales discount allowed if any shall not be eligible under marketing expenses.



7.1.1  A Startup Council shall be constituted to establish a Startup Ecosystem and for administrating the incentives to Startups  in  the  Union Territory of Puducherry. The constitution of the Council are as follows:

                                              The Hon’ble Minister for Industries and Commerce                                                              Chairman

                                              The Hon’ble Minister for Education,                                                                                      Co-Chairman.

                                              The Secretary for Industries, Puducherry,                                                                             Vice-Chairman

                                              The Additional Secretary-cum-Director of Industries,                                                            Member secretary

                                              The Secretary to Government of Puducherry (Labour),                                                         Member

                                              The Secretary to Government of Puducherry (Science and Technology)                              Member

                                              The Secretary to Government  of Puducherry (Education),                                                   Member

                                              The Secretary to  Government of Puducherry (Information Technology),                              Member

                                              The Managing Director, PIPDIC                                                                                             Member

                                              The General Manager, District Industries Centre                                                                   Member

                                              The Manager, Small Industries Development Bank of India (SIDBI) ,Puducherry                 Member

                                              Two-three Outside Experts shall be the members of the Startup Council                              Member

7.1.2   The Startup Council shall meet at  least  twice  in  a  year  to  review the Startup Policy and other matters  including availing of incentives. Based on the exigency of service the Council shall meet
more often, within the minimum stipulated time of one  year.  The Council shall act as a think-tank assigned for strengthening the startup ecosystem in this Union 
7.1.3.  The Startup Council shall function as the apex body for the monitoring and development of Startup  ecosystem and  implementation of the Startup Policy. The functions of the Startup Council will be as follows:-
          i.    Forming, empaneling and monitoring incubators, industrial bodies, mentor institutions etc.
          ii.   Collaborating with  Incubators  outside the  Union  Territory of Puducherry.
          iii.   Approving Nodal Agencies and monitoring their performance.
          iv.   Analyse and update the Startup Policy periodically.


7.2.1.    A Startup Cell shall be constituted under the Department of Industries and Commerce, Puducherry which will be the  Nodal  Agency,  for implementing the Startup Policy in the Union Territory of Puducherry. The Puducherry Startup Cell (PSC) shall assist the Startup Council in making/amending the policy decisions and Startup Policy of this Union Territory of Puducherry.
7.2.2.    The Puducherry  Startup  Cell  (PSC)  shall  promote  the  culture  of innovation in this Union  Territory.  The  Puducherry  Startup  Cell (PSC) shall be a single point contact for  the  entire  Startup  ecosystem and enable knowledge exchange and access to funding.
7.2.3.    The Puducherry Startup Cell (PSC) shall facilitate the matters relating to establishment of Incubators with required facilities, Tool rooms, Intellectual Property Protection, obtaining State and Central Incentives and to provide all other information and awareness as and when required for new Startup ventures.

 7.2.4.    The “Puducherry Startup Cell (PSC)” shall :-
          i.    Correspond with Central and Union Territory Government, Indian and foreign Venture Capital (VC), Financial Institutions, Banks, Incubators, Legal partners, Consultants, Universities and Research and Development Institutions;
          ii.    Assist Startups through their lifecycle with specific focus on important aspects like obtaining financing, funding from Government of India, feasibility testing, business structuring advisory, enhancement of marketing skills, technology commercialization and management evaluation;
          iii.   Organize mentorship programs in collaboration with Government organizations, incubation centers, educational institutions and private organizations who aspire to foster innovation; and
          iv.    Facilitate and assist the incubators, Atal Incubation  Centres and Atal Tinkering Laboratories to participate  in various challenges and Grand Challenges hosted by other  agencies, NITI Ayog and other Government of India agencies.

7.2.5.    The Puducherry Startup Cell (PSC) shall mentor and provide handholding support to all young  entrepreneurs who  have  the  courage to enter an environment of risk.


7.3.1.    An Innovation and Entrepreneurship Development Committee shall be established to collaborate with Educational Institutions to identify and nurture innovative ideas and handhold them  to  develop  into Entrepreneurs and mentor and handhold the startups  on a continuous basis. They will serve as the nodal team for heading the Startup Policy. The IEDC will comprise of a dedicated Startup Team comprising experienced professionals from Technology, Legal and Academic fields. Young professionals who excel in Startup  shall  also form part of the IEDC. The  Committee  will  be  duly  constituted  with the approval of the Government.

 7.3.2.    The functions of the IEDC shall be as follows :-

                  i.     The disbursal of incentives under the policy shall be monitored.

                  ii.    The objectives of the policy shall be monitored  by  creating  Specific Performance Indicators.
                  iii.   Dedicated Startup Web portal and  Mobile App  shall be developed. The portal and the App shall enable to track the progress in real time, ensuring transparency and accountability.
                  iv.   The implementation of the policy shall be reviewed periodically and reported to  the  Startup  Council  through  the  Startup Cell.
                  v.    Review and revisit the Startup Policy and suggest modifications  to realign the Policy as per the changing requirements.



      The Puducherry Startup Cell (PSC) shall endeavor to take all effective steps to promote and encourage the Academic/R & D Institutes and others like Technology/Industrial Parks or Companies as well as individuals or a group of individuals to establish  incubation  centres under the Atal Innovation Mission of the NITI Ayog.


      The Atal incubation centres  would support and encourage  startups  in specific subjects/sectors such as manufacturing, transport, energy, health, education, agriculture, water and sanitation etc., and would provide them with necessary infrastructure facilities and other value added services.


     The Puducherry Startup Cell (PSC) shall endeavor to encourage establishment of Private sector incubators preferably in engineering institutions and would coordinate and assist them in getting the support from central and state government departments/agencies. Such Private sector incubators shall be managed and operated by the private sector.


8.4.1.    In order to create scientific temper and cultivate the spirit of curiosity and innovation among young minds, the Puducherry Startup  Cell (PSC) shall endeavor to encourage and  support  establishment  of Atal Tinkering Laboratories (ATL) in the Union Territory of Puducherry.

8.4.2.   One Tool Room and Technology Development Centre (Technology Centre) is being established by  Ministry  of  MSME  at  the  request  of this administration at Kalapet in the Pondicherry Engineering College Campus, which will also be an Incubation Centre. The Puducherry   Startup Cell (PSC) shall endeavor to promote establishment of Technology Business Incubators in renowned Institutions.


 8.5.1. Eligibility : Incubation centers, Universities/Educational Institutions, R & D Institutions, Private and other establishments will be eligible as an institution to provide support  and mentor to  Startups  as approved by  the Council.

  8.5.2.  Incubator : All the incubators  established would be networked and well connected to facilitate exchange of thoughts, ideas and collaboration across educational institutions and diverse disciplines. Identified Incubators shall be encouraged to operate as accelerators.

8.5.3.  Infrastructure :    The Startup Cell  shall  endeavor  to  engage  with  the  Public  and Private Sectors in assisting the incubators by providing necessary support such as Research and Development Labs, Common Testing/ Quality Assurance/Quality Control Labs, Design Studios and Tool Rooms, Fab Labs, Bio-Tech Wet Labs, Shared Office Space, Conference Rooms and other shared services etc.    The Government shall allot land or built up space  to  the  Startup Cell in the Industrial Estates/IT  Parks depending  on the availability on preferential basis for establishment of Incubators/ Accelerator, Co-working space,  Fab Lab, etc.



9.1.1.  The Puducherry Startup Cell (PSC) shall endeavor to host a common startup portal  and  a  mobile  application  to  serve   as  the single platform for Startups for interacting with Incubators, Industrial bodies, academic institutions, Government and Regulatory Institutions for all business needs and  information exchange among various stakeholders’ for effective implementation and interaction in the startup ecosystem.

9.1.2.    The Startup portal and a mobile application shall provide for :-
      i.    Registering Startups with relevant agencies  of  the  Government. A simple form shall be made available for the  same.  The  Mobile App shall have all the backend integration with Ministry  of Corporate Affairs and Registrar of Firms for seamless information exchange and processing of  the registration application.
     ii.   Tracking the status of the registration application and anytime downloading of the registration  certificate.  A  digital  version  of  the  final  registration  certificate  shall  be  made  available for downloading through the Mobile App.

    iii.   Filing for compliances and obtaining information on various clearances/approvals/registrations required.
   iv.   A collaborative platform with a national network of stakeholders (including venture funds, incubators, academia,  mentors  etc.) of the Startup ecosystem to have discussions towards enhancing and bolstering the ecosystem.
     v.     Assist the Startups to get the certificate from Inter-Ministerial  Board so that they  are  eligible  for  the  Income  Tax  exemption  for a period of 3 years.
    vi.   To apply for various schemes undertaken under the Startup  India Action Plan.
    vii.  Dedicated Cloud Server space with necessary basic software  with connectivity to all incubators across the state.
    viii. Enterprise Resource Planning (ERP) software will be made available at all incubators for free to access by the startuppreneurs.


         To reduce the regulatory burden on Startups  thereby  allowing  them to focus on their core  business  and  keep  compliance  cost  low,  the recognized Startups signed with recognized incubators/accelerators shall be allowed to self-certify  compliance  in  respect  of  the  following six labour and three  environment laws (stipulated by the Central/ Government of Puducherry, from time to time).

9.2.1.  LABOUR LAWS :
  i.    The Building and Other Construction Workers’ (Regulation of Employment and Conditions of Service) Act, 1996.
   ii.    The Inter-State Migrant Workmen (Regulation of  Employment and Conditions of Service) Act, 1979.

  iii.    The Payment of Gratuity Act, 1972.
  iv.    The Contract Labour (Regulation and Abolition) Act, 1970.
   v.    The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
  vi.    The Employees’ State Insurance Act, 1948.

   i.    The Water (Prevention and Control of Pollution) Act, 1974.
  ii.    The Water (Prevention and Control of Pollution) Cess  Act,  1977.
 iii.    The Air (Prevention and Control of Pollution) Act, 1981.


In case of the labour laws,  provisions  shall  be  made  that  there  are no inspections for a period of 3 years and  appropriate  permission may be granted on self-certification basis. In case of any violation reported based on credible information, inspection may be  conducted only with the prior approval of Labour Commissioner.


           The Puducherry Startup Cell (PSC) shall facilitate filing of Patents, Trademarks and Designs by innovative recognized Startups. The Puducherry Startup Cell (PSC) shall :-
                                 i.    Fast-track Startup patent applications for examination and disposal, so that they can realize  the  value  of  their  IPRs  at  the earliest possible.
                                ii.   Be  responsible  for  providing  general  advisory   on   different IPRs as also information on protecting and promoting IPRs.


9.4.1.  To stimulate the  Startup  ecosystem  and  to  provide national  and international visibility to the Startup ecosystem Startup festivals  shall be organised annually and also the startups  shall  be  encouraged and assisted to participate in other national and international Startup events.

9.4.2.  The festivals shall facilitate the Startups to connect with investors, mentors, incubators and showcasing innovations, exhibitions and product launches, mentoring sessions, talks by successful and disruptive innovators on their success  paths,  competitions  such  as  Hackathon, etc., announcements of rewards and recognitions, panels and conferences with industry leaders, etc.


10.1    FUNDING :
         A corpus fund of ` 10 crores shall be created with the name ‘Puducherry Startup Fund’ to support establishment of Startup Incubators. The fund will also be utilized to  develop  Co-Working  Spaces. The Corpus fund will attract funding  from  private  industrial  CSR funding  and  any  other  sources  and  resources  as  approved  by  the Startup Council.

10.1.1.    Financial grant upto ` 3 lakhs shall be provided to the projects recommended by the incubators established by the Government/Private Sector/Academic Institutions as a Startup grant. The Committee of experts duly constituted by  the  Government  under   the  Innovation  and Entrepreneurship Development Committee (IEDC) will approve the projects and monitor their progress from time to time.

10.1.2.    Monthly allowance of ` 10,000 shall be granted to per person upto a maximum of 5 persons. If the founder or Co-founder of  the  Startup happens to be Women/SC/PH/Transgender,  monthly  allowance of ` 15,000 shall be granted.

10.1.3.    Marketing  assistance  shall  be  given  by  the  Startup  Cell  with   the approval  of  IEDC  for  the  recognized  Startups  operating  in  the   Union Territory of Puducherry at Minimum Viable Product (MVP) stage.

10.1.4.    Corpus fund will be utilized to provide  Infrastructure  support like Workstation, Cloud Services, Laboratory facilities, testing, marketing facility as required by the Startups shall be given  based on the recommendation of Incubators.


10.2.1.    Fiscal Incentives: All the incentives applicable in the Industrial Policy, 2016 shall be applicable to the Startups.

10.2.2.   The Startups can claim incentives of State Government, Government of India and Government of India Agencies.  The  Startup Cell shall assist the Startups in claiming incentives. However, the quantum of incentives for a particular component  under the  Government of India and Government of Puducherry schemes together shall  be  limited to 75% of the capex of that particular component.

10.2.3.    Non Fiscal Incentives: A cloud server with necessary softwares shall be facilitated to connect all incubators across the state. Enterprise Resource Planning (ERP) software shall be made available to all incubators for free to use by the Startups.

10.2.4.    Recognized Startups shall have free access to Universities/ Government libraries, Government laboratories through the incubators.


10.3.1. Eligibility :Students of colleges and educational institutions in the Union Territory of Puducherry are eligible.

10.3.2.  Student/Student teams   who  avail  incubation  support  from the education institutions shall be given 5% marks for their startup ideas/attempt and 20% attendance every semester subject to certification from the incubators.

10.3.3.  Students of such recognized institutions shall  also be  encouraged to develop their mini-projects or internships or summer projects during their vacations. Students shall be permitted to convert such innovative projects that are incubated through the incubators of their educational institutions into final year project towards for degree completion.

10.3.4. Competitions and Grand  Challenges   shall  be  encouraged  to be organized to exhibit innovative products from various incubators/ educational institutions/schools etc. Prize money  and  a  citation  shall  be awarded to the winners selected by a committee.

10.3.5.  Awareness camps shall be conducted to inculcate innovation ideas at College and School Level by organizing various  awareness  camps such as boot camps, showcasing of exhibits etc., by the Startup Cell/Incubators/Institutions.

10.3.6.  Selected startups of students from  colleges  and  schools  shall  be encouraged to reach international startup destinations for  exposure and for utilizing the benefit available at those startup destinations.


       Norms shall be made for Public entities for procurement from Startups. Exemptions to Startups shall  be  made in  criteria  such  as  prior experience, turnover, security deposits etc. However no exemption shall  be made in quality, technical specifications and standards.


The policy shall remain in operation for  a  period  of  five  years  from 2019-2024 or till a new policy is formulated. However as the requirements of  the  Startups  may  keep  changing,  there may  be  a need to review the working of the policy  at  regular  intervals  to  fine tune it to the changing requirements/demands.


12.1   For clarification/resolution of interpretation of any term and/or dispute relating to the  function  of  any  provisions  under  this  policy shall have to be referred to the Department of Industries and Commerce, Puducherry  and  the  decision   of  the  Department   in   consultation with the Startup Council in this  regard  shall  be  the  final  and  binding on all.

12.2    No right on claim of any incentive/privileges under this policy shall be deemed to have been conferred merely on the ground of the provision in the Policy. Implementation of various provisions covering the incentives, concessions, etc., shall be subjected to  the  issue  of detailed guidelines/statutory notifications, wherever  necessary in  respect of each item by the Department concerned.

12.3   The department shall reserve right to  amend  any  provision  of  the policy with the  approval  of  the  Government,  keeping  in  view  of the guidelines issued by the Central Government from time to time.                                                                                                                                                                                  


                                                                         Secretary (Industries & Commerce)


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