COVID-19 Relief Scheme for Start-Ups in India
Covid-19 has adversely affected all businesses across the globe. It gave a major blow to the investment sector as there was a huge liquidity crunch throughout the industry spectrum. This was a major setback for the startup industry especially because startups are nothing but an idea with a vision to develop into a multi-million company, for which it requires investments and funds.
The government of India to protect the vulnerable startup industry stepped in and brought some major regulatory reforms coupled with some economic reliefs which can be categorized into the following parts:
1) Government of India (GOI) Initiative
A) Department for Promotion of Industry and Internal Trade (DPIIT) has set up a control room to monitor the problems that the people in the industry are facing regarding the manufacturing, delivery, distribution of goods. DPIIT ensures that the flow of goods is not halted due to lockdown restrictions imposed by the government. The department has also provided contact details to be reached in case of any inconvenience. The contact details are as follow:
Telephone: +91-11 23062487, Email: firstname.lastname@example.org.(v)
B) Business Immunity Platform (BIP) has been set up by the National Investment Promotion Agency to provide 24/7 active forum for startups to get help. The platform has a panel of experts who are trained to help businesses conduct hassle-free operations especially during Covid lockdowns.
2) Regulatory Reforms
The government of India has brought a series of regulatory reforms in the light of this pandemic to sustain the new growing businesses and startups.
a) Income Tax - These reforms include an extension of filing income tax return dates, reduction in interest rates for delayed payment, extension for PAN-Aadhar linkage.
b) GST - Extend date for opting for a composite scheme, immediate release of all GST and Custom refunds, all due dates of approvals, licenses, returns, sanctions, etc. are extended.
c) Ministry of Corporate Affairs (MCA) - MCA brought a scheme to allow companies to make good their defaults, irrespective of their duration of defaults so that they can start fresh as a fully compliant business entity.
d) CUSTOMS - Government brought in reform and allowed for 24/7 CUSTOM clearance and appointed nodal officer for speedy clearance of export and import.(vii)
e) SEBI - Extension on the due date of regulatory filing for Alternative Investment Funds (AIF) and Venture Capital Funds (VCF). The relaxed compliance requirement for portfolio managers.
f) RBI - All banks, financial institutions, and NBFCs were allowed to give a moratorium for any default on the payment of installments. Charges on debit card transactions via ATM were waived. The minimum amount to be maintained for all savings account was abolished. The digital charges for trade transactions were cut down.
3) Economic package
The government of India has approved around Rs. 3 lakh Crore economic package as a working capital facility for business under various schemes launched recently. This specifically includes MSMEs (Micro, Small & Medium Enterprises). This amount can do wonders to sustain these businesses in their nascent stage of development.
The reforms and support package by the government of India cans serve as a major relief but only when it is implemented effectively and efficiently.
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