THIRUVANANTHAPURAM: The government decision to extend the support for startups by two more years has come as a shot in the arm for majority of the startups in the state. Consequently, the startups will get seven years of government support from the existing five years in line with Startup India’s definition of startups.
The benefits have also been extended to startups which have been merged, acquired or amalgamated, subject to eligibility. Besides increasing competitiveness, the move will give a lifeline to majority of technology- based product development startups in the state, said an officer of the Kerala Startup Mission (KSUM), the implementing agency for entrepreneurship development and incubation activities.
There are 757 technology startups registered with the KSUM. A recent survey found only a few startups managed to earn profit while most of them are struggling. The decision to extend the benefits will help the startups to reduce the extra financial burden. “Product development companies take longer to build when compared to services companies. Seven years is a reasonable time period,” said startup entrepreneur, Robin Alex Panicker. “KSUM focuses on developing product-based companies and the extension will suit our requirements.” said KSUM manager Ashok Kurian Panjikaran.
The cost of a startup company will increase significantly if the government support in terms of subsidised office facilities are withdrawn after the incubation period. In addition to the infrastructure cost, the difficulty involved in getting office space in major IT parks will make the startup unattractive for employees, said Robin.
Funds for startups
Armed with state funding, the KSUM is set to roll out Youth Entrepreneurship Development Programme (YEDP) to mentor future CEOs. It has received `20 crore as first instalment of the fund allocated in this year’s budget. Select startups are likely to get the funds by next month. The YEDP caters to developing technology-led innovation and entrepreneurship among schools, college students and aspiring entrepreneurs.
What it means:
The move will increase competitiveness, besides giving a lifeline to a majority of technology- based product development startups in the state.
Startups which have been merged, acquired or amalgamated, will also benefit from the government’s move, subject to eligibility