New Delhi [India], July 14 : Startups in India have high expectations from this year's upcoming Union Budget. Early-age startups hope for the removal of angel taxes, while health tech startups expect increased funding for the sector.
Startups function as engines of economic growth, playing a crucial role in generating new jobs, ideas, products, and services.
As of December 2023, the Department for Promotion of Industry and Internal Trade (DPIIT) had recognised 1,17,254 startups. These startups have reportedly created over 12.42 lakh direct jobs, significantly impacting the economy.
Eklavya Gupta, CEO and Co-founder of Recur Club, stated, "We are confident that India's business credit landscape is on the brink of a major digital overhaul. FinTechs are at the forefront of this change, deploying innovative technologies and utilising in-depth data analytics to streamline and expand credit access." He added, "While the current allocation of Rs 10,000 crore is an excellent initial step, realising the full capabilities of India's SME and startup ecosystem will necessitate greater investment, especially in credit guarantee schemes."
Vinod K Singh, Co-Founder and CTO of Concirrus, expressed his expectations from the budget: "As the Union Budget 2024-25 approaches, we hope the government will address the pressing issue of the 'angel tax.' Eliminating this tax will enhance capital formation and attract vital investments. Streamlining the duty structure and reducing high tariffs on electronic inputs are also crucial to bolstering the startup ecosystem and driving innovation. Expanding the Fund of Funds and introducing low-interest loans would be beneficial."
Rajiv Lamba, co-founder and CEO of AI-enabled customer feedback platform Surveysensum, added, "Just as the government has prioritised financial inclusion, it should now focus on technological inclusion to propel India to the next stage of growth. By training youth in AI, the government can make a strategic investment in the nation's technological future. Given the rapidly evolving job market, a substantial increase of 20 to 25 percent in budget allocation should be considered for AI-based skill development and entrepreneurship."
He further emphasised, "Incentivizing investment in AI startups and R&D initiatives can boost local innovation in the AI space. The last budget introduced a deep tech fund of Rs 1 lakh crore with a 50-year interest-free loan period; the government should now establish a clear and transparent mechanism for access to this fund."
Raja S, founder and MD of Hearzap, highlighted the expectations of health tech startups: "Health tech startups are eagerly anticipating increased funding that could usher in transformative advancements. This crucial investment holds the promise of extending cutting-edge healthcare solutions to rural and underserved areas, effectively bridging existing gaps in care. The upcoming budget ensures that every individual in our diverse population, from the youngest to the oldest, can access essential health services, including specialised care."
Discussing taxation for startups in India, Vvihan Gulati, Director of Mediagraphics PR, commented, "Removing the angel tax is a highly anticipated move that would benefit early-stage startups and their investors. It would foster a more favourable environment for innovation and growth, allowing startups to attract much-needed capital without the burden of excessive taxation. This change could significantly enhance the ease of doing business and contribute to the overall growth of the startup ecosystem in India."
The Union Budget 2024 will be tabled on July 23 by Union Finance Minister Nirmala Sitharaman. With this, she will become the first Finance Minister to deliver seven consecutive budgets, surpassing Morarji Desai. She presented the interim budget on February 1 of this year.
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