82% SMEs yet to receive benefit under PM Modi’s Startup India Mission

According to a survey conducted by LocalCircles, a community social media platform, around 82 per cent of start-ups have not benefited from the Modi Government’s Startup India Mission.

Only 18 per cent start-ups and SMEs (small and medium enterprises) in the next poll claimed to have benefited from the Startup India Mission. This means that a huge 82 per cent start-ups or SMEs felt that they did not receive any benefit from the highly publicised scheme,” said the LocalCircles Annual Startup Survey 2019.

The survey, conducted among 15,000 start-ups, SMEs, also stated that the April 2018 notification exempting those startups, with total investment including funding from angel investors up to Rs 10 crore,  from tax under Section 56 of the income-tax law after taking approval from an eight-member government board for exemption also did not help as “the angel tax has not made the life of an entrepreneur any easier with many SMEs and start-ups receiving income tax notices this year.”

“32 per cent said they had received multiple notices while six per cent said they had received one notice. 62 per cent said they did not receive any notices,” the report added.

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The government instructed the Income Tax (IT) Department on December 24, 2018, to not take coercive measures to recover the outstanding tax dues after several start-up founders took to social media to raise their voice against these notices.

However, the report states that despite the government’s order, assessment orders continue to be issued against start-ups.

“Though an order was issued to not take coercive measures to recover the demand, assessment orders continue to be issued against start-ups,” the report said.

The survey also revealed that while 24 per cent of the start up owners said they would close their businesses, five per cent to plan to sell it off.