Post Budget Reaction from Startups Across India
Finance Minister Arun Jaitley, while presenting the Union Budget 2016 for in Parliament on Feb. 29, promised generous incentives and a slew of tax sops to the existing start-up firms to boost the government’s ambitious initiatives Startup India and Standup India.
Swati Bhargava, Co-Founder, CashKaro.com
I would view this budget to have a positive push to industries across the board. This budget focuses clearly on growth, development and job creation with particular focus on empowering the rural sector.
In January, Narendra Modi, Prime Minister, India had launched ‘Startup India, Standup India’ initiative with the motive to take this sector to a new horizon. Clearly, this budget is in all support to the initiative.
The government has allocated a Rs 500 crore corpus for its Stand-Up India scheme, which was announced in January, to stimulate innovation and startup activity by women and SC/ST entrepreneurs. This will bolster entrepreneurship for SC/ST and as per estimates will benefit 2.5 lakh plus entrepreneurs.
Corporate tax for companies with turnover not exceeding Rs 5 crore has been reduced to 29% plus surcharge and cess. This is a welcome advantage in union to last year’s promise of gradual reduction of corporate tax from 30 per cent to 25 per cent over four years and hence will encourage more to start up.
The most positive move and certainly a thumping gift from Arun Jaitley, Finance Minister, India is the announcement of the 100% tax deduction program for three years over a period of five years for startups approved FY2019 under the ‘Startup India, Standup India’ scheme.
This move is going to spark a new energy in the startup sector of the country as it is expected to raise US $700 million and will generate around 5000 jobs in the next 12 months.
Also, an amendment in The Companies Act as proposed in the budget will allow startups to be registered in a day; will be huge relief. Earlier the registration used to take more than a month which was quite taxing. The icing on the cake is the support from The Reserve Bank of India (RBI) giving some positive indications that it will be easing out few foreign investment norms to back up the startup sector of this country.
Overall this is a balanced growth oriented budget with focus on accelerating on the fundamentals.
Soumitra Gupta, CEO, Togofogo
“We appreciate the Finance Minister’s move on Tax holiday for startups as every startup takes minimum three of five years to setting up the company. We welcome the effort by Indian government for startup industry. It will give a strategic boost to the current ratio of Indian entrepreneurs and will support the Startup India campaign by Modi Government.”
Mr. Puneet Gupta, CEO, Buzzmeeh
“We welcome the Budget 2016-17 as it’s a well strategized move for Indian startup industry. 100 % deduction on profits for 3 out of first 5 years will definitely strengthen the base as it will assist in setting the right pace for the company. Additionally, the amendment to the Companies Act in order to ensure speedy registrations of fresh startups will also lend a positive boost to the startup ecosystem. These positive moves will surely encourage the entrepreneurs wanting to establish themselves as a key part of the economy.”
Aditya Agarwal, Founder,Wealthy.in
“It took us 45 days to register our startup last year. Bringing it down to 1-day is disruptive. It’s even faster than 3-days it takes to start a business in Singapore. The three-year tax-holiday and reduction of LTCG period for unlisted securities to 2 years is also a positive move for startups.
It’s promising to see digital-India at the core of many initiatives. Aadhaar based delivery of financial services and subsidies will promote financial inclusion and bring more Indian households under the formal banking system.Government could have done more to promote participation of Indian households in financial markets.
Pre-budget, there was an expectation of raising section 80C limit to 2.5 Lakhs. This move would have helped households reduce tax-liability and also channel some savings to capital markets through ELSS funds.”
Mr Sudarshan, COO & Co-Founder, CreditMantri
“This budget has provided a number of benefits that has helped to increase cashflow and savings for the common man. Specifically additional Rs 50000/- deduction for first time borrowers, increase in limit of house rent paid to Rs 60000/-, increase in ceiling of tax rebate for small tax payers, will help lower and middle income groups to aspire for better & affordable housing. Further with more cash flow in the hands, he can plan finances better to either save or service loans and maintain good credit. ”
Ambika sharma, Founder, Instappy
Government has recently been focusing a lot on the growth of woman Entrepreneurs in the country, cheering them to establish themselves. Allotting funds of Rs. 500 crores especially for them will encourage the startup ecosystem to reach another level.
Furthermore, since last budget, service tax has been the topic of discussion and by giving 100% exemption; the Finance Minister has done his bit to act as an enabler. Startups can now more effectively and efficiently concentrate on establishing their businesses and weave their path.