This Budget truly has the potential for transforming India: Start-ups hail Budget boost
The Union Budget 2021 has brought much cheer to the start-up camp. Tax holidays for start-ups have been extended by one year, till March 31, 2022. Meanwhile, the capital gains exemption given to start-ups was also extended by one more year. The Government also proposes to reduce margin money requirements from 25% to 15% for start-ups.
Moreover, in her Budget speech, Finance Minister Nirmala Sitharaman, further said that the definition of small companies under the Companies Act 2013 will be revised. As per the revised norms, companies with paid-up capital of up to Rs 2 crore and turnover of up to Rs 20 crore will fall under small companies. This will benefit more than 2 lakh companies in compliance required.
The Government also proposes to provide incentives to one person companies, which will further give a boost to start-ups. Restrictions on paid-up capital or turnover for one person companies will be lifted, besides they will also have the liberty to convert into any other type of company at any time.
Adgully reached out to start-ups from different sectors to get their reactions to Union Budget 2021-22.
Rohit Kapoor, Chief Executive Officer, OYO India & South Asia:
“It is heartening to see a Budget entirely focussed on revitalising the economy. On the backbone of the proposed reforms, we believe that a focus on growth-oriented measures, economic reforms and inclusive growth would pave the way for extensive economic recovery. The Government’s focus on extending and improving transport (road, railway, metro) infrastructure with nearly 217 projects worth over Rs 1 lakh crore to be completed under National Infrastructure Pipeline will enable travellers to explore hidden gems and therefore bolster the domestic tourism and hospitality industries. Additionally, keeping up with the changing times, an overall focus on technology with interventions like incentivising and promoting digital payments will fast track India’s transition into a digitally-enabled economy.
We are confident that with the series of interventions announced by the Honorable Finance Minister, Nirmala Sitharaman, our country is on the path of stable and quick economic recovery. With the mantra of ‘Atmanirbhar Bharat’ and initiatives reducing compliances for one-person-companies, a boost for MSMEs, the reduction in corporate taxation along with the steps to simplify GST for companies further and ease tax compliance will boost morale across industries. The funds allocated to COVID-19 vaccines will also strengthen confidence among travellers and boost faster recovery in the service sectors. The Government’s efforts towards skilling the country’s youth and collaborating with other countries will spur entrepreneurship and enable job creation as well. This Budget truly has the potential for transforming India.”
Vivek Bansal, Group CFO, InCred:
“This is a growth-focussed Budget for sure! The Budget signals big intent for decade to come and compliments to honourable PM and FM for the same. Much needed focus on health & infrastructure, greater transparency on fiscal situation, attempt to make the regulatory framework more efficient through tax, move to privatise struggling PSUs/PSBs are some path breaking changes. The Government has also paved the way for the development of a world-class fintech hub at GIFT City in Gujarat. It has simultaneously pledged to set up a Development Finance Institution with Rs 20,000 crores capital infusion, which will augur well for long term growth and innovation. Another Rs 20,000 crore have been earmarked for Public Sector Bank, which should further strengthen ability to lend. NPAs will be tackled separately with the constitution of Asset Reconstruction Management Company in a bold move which will make financial sector stronger for future. All in all, the Budget has lived up to its expectations in the current landscape and we await to see the fine prints.”
Shyatto Raha, Founder & CEO, My Healthcare:
“The Budget of 2021-2022 has brought about some positive sentiment for the healthcare industry, especially in the wake of the recent pandemic and healthcare crisis. Stepping into 2021, we believe that a focus on growth-oriented measures, economic & policy reforms and inclusive growth would pave the way for a larger economic recovery. With the increase of 137% in the Budget outlay from last year, introduction of PM Swasthya Yojana and te Government investing immensely in the healthcare segment over the next 6 years, the focus needs to be in building a healthcare ecosystem will get be effective in delivering quality primary care to all citizens of India. The allocation of Rs 35,000 crore for COVID-19 vaccines and the targeted roll-out of the vaccination programme across the country, the Government has ensured the safety and well-being of its citizens.
We are confident that with the series of interventions announced in the Budget by Honorable Finance Minister, Nirmala Sitharaman, our country would see the much needed recovery and boost to the healthcare sector of India. Setting the goal of ‘AtmaNirbhar Bharat’, an allocation of Rs 15,700 crore to MSMEs and increasing the tax holiday for start-ups, the government has reposed its faith in the idea of entrepreneurship, thereby boosting confidence among aspiring young entrepreneurs and the start-up world.”
Nikhil Barshikar, Founder and Managing Director, Imarticus Learning:
“The Central Government has proposed the implementation of Data Analytics, Data Science, Artificial Intelligence and Machine Learning to upgrade the functioning of the Ministry of Corporate Affairs. Specifically, the Ministry’s database management systems will be overhauled, leading to increased efficiency in e-scrutiny, e-adjudication, e-consultation and compliance management. To accomplish this, highly skilled Indian Data Scientists and Analysts will be required.
We have also been informed that a Trans-Asian partnership between India, Japan and the UAE is in the pipeline, wherein Workforce Upskilling initiatives and Diploma & Skill Certification programs will be jointly supported by the three nations. Given that Imarticus Learning has already established a presence in the UAE this year, this development is of particular interest to us, and we will pay close attention as more information comes to light.
Furthermore, Rs 3,000 crore has been allocated to upskilling and training Indian Engineering Graduates and Diploma recipients, in view of modernising India’s domestic talent pool.”
Vinayak Nath, Founder and CEO, My Place Coworking:
“The Budget has some hits and misses for the start-up ecosystem. Exemption on capital gains on investments in start-ups and allowing OPC for NRIs will surely improve investment opportunities and cash liquidity. Tax holiday also comes as a relief to the start-ups that are striving to survive in these challenging times.”
Bala Parthasarathy, Co-founder and CEO, MoneyTap:
“We have seen India become one of the fastest-growing Fintech Markets in the world. We have no doubt that the Government’s support in creating and promoting a world-class Fintech hub at GIFT City will draw everyone’s attention, and can soon become the cradle of developing Fintech companies. We do see enormous growth not only in that region but also in creating jobs, drawing more people to work in Fintech. The exposure can bring in more innovation, technical know-how, help companies thrive in a joint collaboration set up, attract many incubators, investors, accelerators, help in creating an ecosystem for growth.
Regarding the Government’s Rs 1,500 crore influx to support digital payments, we all know that The Digital India Program is a flagship program by the Government of India. MoneyTap has also mirrored this goal in its aim to make more Indians digitally empowered, be able to use financial apps in better ways, improve knowledge and create apps that are easy to use, flexible, and can make people’s lives more secure. So, we are hopeful that any influx like this will help people get more convenience and accessibility to financial payments online.”
Subho Ray, President, IAMAI:
“The Internet and Mobile Association of India (IAMAI) has welcomed the positive outlook on the digital industry and the push to provide much needed support to the start-up ecosystem. IAMAI believes the announcements made by Honourable Minister of Finance Smt. Nirmala Sitaraman will promote entrepreneurship and will boost investments.
The focus on digital payments and overall Infrastructure development is a step towards realising the trillion-dollar economy and will open up new opportunities for demand generation in the country.
The six-pillar vision of the FM – Health and well-being, physical and financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D and minimum government and maximum governance – will lead to an inclusive development in India.
The FM’s announcement of a scheme to provide financial incentive to promote digital payments is a welcome step and will further boost the digital payments ecosystem in India.”
Ankit Prasad, founder and CEO, Bobble AI:
“We welcome and applaud Hon'ble FM on a landmark Union Budget 2021-22, as India’s start-up sector recovers from the effects of the pandemic. The key announcements such as extending tax holiday and the capital gains tax exemption till March 31, 2022, revision of the definition of small companies under Companies Act 2013 along with the decision to incentivise incorporation of one-person companies, that would help them grow without any restriction on paid-up capital or turnover and to convert into any other type of company at any time – are a clear reflection of the government’s commitment to resurrect this sector and provide the much needed support.
We also welcome the Government’s move to launch data analytics, artificial intelligence, and machine learning driven MCA21 Version 3.0. The e-scrutiny, e-adjudication, e-consultation and compliance management should also make our life much easier.
It is important to understand that Indian start-up ecosystem, which houses thousands of start-ups, has the true potential to be the key driver of the digital revolution in India and can exploit the huge opportunity that lies ahead for the benefit of the country’s economy. With as many as 38 unicorns, of which 12 of them coming up last year, India’s start-up ecosystem is currently the world’s third-largest. As per Economic Survey 2020-21, of the 41,061 Government-recognised start-ups in India, over 39,000 start-ups accounted for 470,000 jobs as of December. One can imagine the immense opportunity for job creation in a digitally evolving economy such as ours if the Government offers impetus for growth to this sector. We believe that these latest announcements will give the much needed push that the sector desires at the moment.”
Joji George, Co-Founder, Gonuts:
“The Budget 2021 announced by Hon’ble Finance Minister though positive, left us wanting some more from a start-up and MSMEs perspective. That said, the Budget did reflect the Indian Government’s commitment to boost the Indian start-up ecosystem.
A boost from the Budget for startups is important as it carves the next phase for the start-up ecosystem post the pandemic. The Government’s decision to bring in institutional investors to invest in startups is a positive move and will help encourage more investment into the start-up community. Of course, the start-up community needs to see and understand the fine print.
FM has announced, registration of one-person firms with no limit to paid up capital will boost the start-up ecosystem. That helps small entrepreneurs to take the leap.
The Government has doubled its expenditure allocation towards micro small and medium enterprises to Rs 15,700 crore in FY22. This is an excellent move for companies like us that work with large number of MSMEs.
Another boost offered by the Government is extension of tax holiday for start-ups by one more year. This will help get start-ups on their feet as they grapple with cash flow and investment.
In the near future, we would want the FM to give a concrete plan on ESOP taxation and hope that the initial deliberation of a 5-year term to pay tax on ESOP is implemented and there is a rationalisation.
We welcome this Budget and appreciate the Government’s steps to fuel the growth of start-ups in India.”