The union budget has announced a host of incentives for entrepreneurs and startups, including a TV programme exclusively for startups; easing foreign direct investment rules into startup segments like grocery, e-commerce and food delivery; proposing a host of enhancements to the digital payment systems ecosystem that would help fintech startups; incentives for electric vehicles that would help related startups; getting loans up to ₹1 crore in 59 minutes; and ensuring that startups do not feel the heat of angel tax from I-T authorities. The budget also proposed 100% FDI in insurance intermediaries, which will benefit digital insurance startups.
“Good measures are extension of Startup India to 2025, training in new age technologies, livelihood incubators and support for agri entrepreneurs. Government could have introduced tax breaks for angel investors as it exists in other countries and, most importantly, government processes and functionaries especially at leaf node continue to operate in archaic and obstructive ways, creating difficulties for startups,” said Kiran Deshpande, president TiE Pune and co-founder Mojo Networks.
“Intention to encourage startup by government is welcome, but tax officers need to upgrade their knowledge about digital economy. No requirement to explain fair share pricing by startups to tax department is yet another welcome move by government. Yet the speed of reform and sensitisation of babus need to speed up with same speed as technology and digital economy is progressing. Angle investment tax related changes are welcome, though process seems still complicated, but a big disappointment for small businesses. They will continue to pay 25% taxes, while companies earning up to ₹400 crore also will pay 25% taxes.” Siddarth Deshmukh, founder and CEO, Shimbi Computing Laboratories Pvt ltd.