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'Start-Up India' a friendly tax regime for start-ups, final break from licence raj: FM Arun Jaitley

By FnF Correspondent | PUBLISHED: 16, Jan 2016, 13:39 pm IST | UPDATED: 16, Jan 2016, 13:39 pm IST

'Start-Up India' a friendly tax regime for start-ups, final break from licence raj: FM Arun Jaitley New Delhi: Finance Minister Arun Jaitley on Saturday said the 'Start-Up India' initiative is aimed at encouraging entrepreneurship by giving them freedom from the government. "It is a final break from the conventional Licence Raj of India," the finance minister said.

Mr Jaitley said though India in 1991 broke away from the shackles of Licence Raj - an era when the government wielded tight control over the economy - there were still many areas where the government played a role in economic activities.

"We ostensibly broke away with it (Licence Raj) in 1991. But the break was only partial, because who would be funded, there was an invisible role of the state, control over land permissions, foreign investment proposals, and environmental clearances," he said.

"And unless the political nods came, to venture into newer areas which involved a lot of capital, an entrepreneur was reluctant."

Mr Jaitley was speaking at the launch event of the 'Start-Up India' initiative at the Vigyan Bhawan in New Delhi.

The finance minister said the start-up initiative would be a "programme in which the government would only be at arm's length. The government will essentially be a facilitator with very little role in day to day interventions in this business."

Mr Jaitley, in a lighter note, also noted the difference about the event. "I must confess that we normally see a large number of formal launches in this plenary hall of Vigyan Bhawan. But this one is with a difference. Because it is probably the first time I see a large potential entrepreneurs here most of whom I am not familiar with. Otherwise, at the formal launches we always have the usual 'suspects'".

Since the NDA regime came to power in May 2014, Mr Jaitley said, its effort has been to restrict the role of state in policy domain. "After Prime Minister Narendra Modi was voted to power in May 2014, if I look back at changes some of them are extremely significant. I find the traffic of industry visiting North Block has almost ended. There are no files to be pushed."

Mr Jaitley noted that the 'Start-Up India' has been the brainchild of PM Modi. This programme, Mr Jaitley said, will help create jobs in the country at a time when the conventional private sector is facing several challenges.

"The government has limited potential to create jobs within the governmental system. The private sector's own expansion itself has thrown up challenges because they have overstretched themselves," he said, referring to corporate India's very high debt levels.

The government in the Budget next month will announce a friendly tax regime that will encourage setting up of start-ups in the country, he said. The finance minister also noted the success of the MUDRA scheme which is aimed at creating small entrepreneurs in the country. "In four to five months, almost 1.73 crore entrepreneurs have availed loans through the MUDRA scheme," he said.
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