Start-ups Hope Budget Will Follow up on Modi’s Promises
NEW DELHI: With Prime Minister Narendra Modi promising tax cuts and a $1.5-billion fund for India’s start-up eco-system, young entrepreneurs hope that the Budget 2016-17 will have some concrete steps to foster new businesses.
“Implementation of nationwide GST (Goods and Services Tax) will help in simplifying the entire tax structure, will cut business costs and will ensure more revenue for us,” said Navneet Singh, co-founder of PepperTap.
He said he was looking for simpler processes, easy regulations, faster clearances and less of red-tape, and added: “More liberal labour laws and capital flows will enable business to be more adaptable and agile”.
Atit Jain, CEO and co-founder, Pluss, noted that India did not have taxation treaties with the US and Japan that have the potential and intent to heavily invest in Indian start-ups.
“Laws should be passed so as to avoid double taxation for investors in these countries. This will attract a significant investor interest in India and thus promote India’s start-up ecosystem,” Jain said.
Prime Minister Modi announced on January 16 that start-ups will not be required to pay income tax on their profits for the first three years and will also be exempt from capital gains tax.
He said there will be self-certification and a three-year exemption from inspections, an online portal and mobile app, an 80-percent cut in the patent application fee and a single-point hub for hand-holding.
Modi announced a Rs.10,000-crore fund for new enterprises, equal opportunity in government procurement, a Rs.500-crore credit guarantee scheme and easier exit norms.
The list of incentives also included 35 new incubators under the public-private partnership mode, 31 new innovation centres at national institutes, seven new research parks, five bio-clusters and a mission with sector-specific incubators, labs, pre-incubation training and seed money.
“Implementation of the already mentioned tax holiday for start-ups for a period of three years and tax benefits for angel investors will also act as a huge encouragement for the entire sector,” said Nidhi Agarwal, founder and CEO, Kaaryah.
“There is still a lot of ambiguity with respect to the taxation laws for marketplace companies like ours. I expect this budget to give some clarity on it,” said Manu Agarwal, founder and CEO, Naaptol
Additionally there should be more plans of development of infrastructure, Agarwal said.
“Our industry rely heavily on imports and having good infrastructure and logistic muscle like larger ports and transit systems will help us move goods faster to our customers.”
Mohit Dubey, co-founder & CEO, Carwale, said he hoped the government would address fuel policy — “by moving us to global quality standards and using pricing to encourage lesser polluting fuels, rather than a partial ban on diesel-run vehicles as is currently imposed”.
“Indian start-ups also often face a lot of hurdles in securing investment, particularly during the early phases of their growth. This can be remedied by giving out tax benefits and incentives for early stage investors,” said Amit Mishra, CEO and co-founder, Quifers.
That would help establish a much larger, holistic seed and early stage investment ecosystem within the country and enable Indian start-ups in achieving scale and success, Mishra added.