Gujarat seeks to be the new startup state

Prime Minister Narendra Modi has trained his focus to increase manufacturing in India, but his home state Gujarat is realizing the importance of technology over it. After last year’s start-up policy released by the state government was criticized for centering focus on manufacturing, the government is ready to unveil a new policy to encourage technology start-ups, in next 15 days after pending approvals are secured.

The start-up policy currently in effect recognises incubators only at an institutional level. The new policy will expand its ambit to include non-education institution incubators such as corporations and industry associations running start-up incubators. The process of acquiring approvals will also be made easy with the new policy.

“Globally if you look at the incubation space, most of the large corporations also have incubators and accelerator programmes. We would want to be able to give that opportunity as we don’t want to be limited in considering only universities,” Dhananjay Dwivedi (IAS) secretary, science & technology said on the sidelines of a start-up summit in Ahmedabad on Friday.

The Gujarat government is targeting to support about 2000 start-ups that have raised at least one round of Venture Capital (VC) funding. Under the current policy, 18 incubators were recognized, with more than 100 start-ups mentored. The new policy also offers to set up 100 new incubators in Gujarat, develop 2 million sq.ft of ‘incubation space’ and assist to raise funding of $1 billion from VCs in the next 5 years.

To create an ecosystem of technology start-ups, the government will incentivize incubators for capital, mentoring, sustenance, procurement of software, stamp duty & registration fee reimbursement and power tariff, as well as electricity duty. The incubators and start-ups will also get lease rental subsidy, interest subsidy, patent assistance, bandwidth subsidy, assistance for marketing & product development among others. Start-ups may also be able to avail an additional funding from Gujarat Venture Finance Limited (GVFL), of up to 25 percent of the raised capital from other sources, within 6 months.

Dwivedi says that third and final year college students will also be included, who are required to formulate a potential start-up as part of the curriculum. However, the new policy will not supersede the present policy, but it will be limited only to processes, and not to products or new technology start-ups, Dwivedi added.

Currently, there are over 5,000 start-up incubators across the world, with 102 in India. Among these, Gujarat has just about 16 of these incubators. To increase the count, the state government plans to organize two national level technology summits. One will be held in August, which is expected to host over 4000 start-ups, accelerators, incubators, and VC’s. Another national conference on technology will be held on 30th September-1st October.