The Union Budget of India is mostly about giving us an insight into how the government decides to spend public funds for the overall development of the Country.
India’s Finance Minister, Nirmala Sitharaman, presented her maiden budget to the Parliament on Friday and walked us through the various plans which may take India’s economy to $ 5 trillion by 2025.
The Indian startup ecosystem felt, the Interim Budget, which was helmed by Piyush Goyal in February, had overlooked their problems.
However, giving a major boost to thousands of startups across the Country, the Narendra Modi led Government announced a list of measures the Government is going to take to “release the entrepreneurial spirit” in the Country.
Keep reading to find out what the Budget for new India has in store for business heads and startup founders.
Budget 2019 highlights for startups
1) The Modi Government will soon launch a TV program exclusively for the startups in India, which will air on the Doordarshan channel. This program will serve as a medium through which emerging startups could meet venture capitalists and investors. This TV program will be directed, executed and run by startups themselves.
2) The Startup India Scheme, which was launched in 2016 to support entrepreneurship among women and marginal segments of the society by providing them financial assistance, has produced more than 300 entrepreneurs as of today. Mrs. Sitharaman said, this scheme will continue till 2025. This can prove to be a major boost for aspiring entrepreneurs.
3) A reduction in Goods and Services Tax (GST) and Income Tax for electric vehicle (EV) makers and owners has been proposed in the Parliament. This move could prove to be profitable for EV startups in the Country.
4) Sitharaman announced, startups will no longer be under the scrutiny of Angel Tax. Angel tax is applicable to startups which have raised their capital by selling shares above the market value. This excess capital is considered as income and taxed accordingly, a move which was started in 2012. The waiver of angel tax could be a huge relief for startup owners.
5) The Finance Minister proposed a 100 percent foreign direct investment (FDI) to insurance intermediaries. The FDI limit is currently 49 %. Apart from this, the Government also announced 100 % FDI in single brand retail startups. Startups like PepperFry and UrbanLadder, which operate single brand stores, will benefit from this move.
6) The Government will also establish around 100 business incubators—80 for livelihood businesses and 20 for tech, in the financial year 2019-20. According to the Government, this will help create up to 75,000 skilled entrepreneurs.
7) Businesses with an annual turnover below Rs. 5 crores can file quarterly GST returns, said Sitharaman.
Apart from all this, the several measures announced for labour laws, rental segment and education can have an indirect impact on the startups of our Country. With so many incentives announced to boost the Indian startup ecosystem, we may see a substantial growth in Indian startups.
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