Startup Policy 2019
ASPIRING PUDUCHERRY– INNOVATION AND STARTUP POLICY
1. INTRODUCTION :
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;
o 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. VISION :
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. MISSION :
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. OBJECTIVE :
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.
5. KEY FOCUS AREAS :
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. GOVERNANCE OF POLICY :
7.1 STARTUP COUNCIL :
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 PUDUCHERRY STARTUP CELL (PSC):
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 INNOVATIONS AND ENTREPRENEURSHIP DEVELOPMENT COMMITTEE (IEDC) :
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.
8. CENTRES UNDER PUDUCHERRY STARTUP CELL (PSC) :
8.1 ATAL INNOVATION MISSION:
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.
8.2 ATAL INCUBATION CENTRES:
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.
8.3 PRIVATE SECTOR INCUBATORS :
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 ATAL TINKERING LABORATORIES:
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 INCUBATION CENTRES:
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 :
18.104.22.168. 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.
22.214.171.124. 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. STARTUP SUPPORT SYSTEM :
9.1. STARTUP WEBPORTAL and MOBILE APP:
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.
9.2. SELF CERTIFICATION :
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.
9.2.2. ENVIRONMENT LAWS:
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.
9.3. INTELLECTUAL PROPERTY RIGHTS (IPR):
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. STARTUP FESTIVALS AND PLATFORM FOR INNOVATIONS:
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. FUNDINGS, INCENTIVES AND SUPPORT :
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. SUPPORT TO STUDENTS :
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.
10.4. PUBLIC PROCUREMENT FROM STARTUPS:
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.
11. VALIDITY OF THE STARTUP POLICY :
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. OVERALL TERMS AND CONDITIONS :
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)
- Yanam-1800 425 1085
- Mahe-1800 425 1084
- Karaikal-1800 425 1083
- Puducherry-1800 425 1082