The Indian startup ecosystem is one of the strongest ecosystems in the world, touching the count of 108 unicorns at present. This demonstrates a strong entrepreneurial with expectations to contribute 4-5% to the country’s GDP.
Since the launch of the Startup Indian campaign in 2016, the country has recorded an all-time high growth of over 190% in the number of startups recognized by the Department of Promotion of Industry and Internal Trade (DPIIT). The Indian startups are playing a crucial role in the creation of jobs not remaining restricted to metros but also expanding to Tier II and III cities.
The government has already taken a series of steps to promote startups in the country, which include schemes like the Startup India initiative, the Fund of Funds for Startups (FFS) scheme, Startup India Seed Fund Scheme (SISFS) and Credit Guarantee Scheme for Startups (CGSS) are implemented to provide capital at various stages of the business cycle of a startup.
The Union Budget’23 is being eyed by various industries for what it has to offer this year.
- To increase the GST exemption slab from the current 40 lakhs to 10 crores. The sector also expects the government to reduce the minimum alternate tax (MAT) from 15 per cent to 9 per cent. This will enable the startups to have more working capital in hand for day-to-day requirements.
- To revise the personal income tax slabs and make no income tax for income up to INR 5 lakhs and move the subsequent income tax slabs further up. This will put more dispensable income in the hands of people and promote spending.
- Revamping of the Credit Guarantee Scheme for MSMEs can provide an easier line of credit which is one of their essential requirements to maintain liquidity for the sector. Lowering compliance costs (regulations/ licences/ compliances) especially for Micro enterprises can also be a small but positive step towards supporting MSMEs”
- To pay strong attention to ESOPs reforms. This will prove to be an important step towards bringing stability to the sector.
- The investments made by any organization in skill development not only bring long-term returns for that particular organization but also for the entire economy. Therefore, startups expect the government to incentivize the startups investing in skill development.
- Many startups in fields like environment conservation, waste management, resource optimisation, etc. expect the government to reward them for their social efforts. These rewards could be in the form of tax incentives, tax holidays, preference in government contracts, etc.
- Government organisations such as Invest India, Startup India, and Make in India, should connect more with the startup community and develop a separate ministry for startups.
- The government should envisage such a framework that promotes the collaboration of startups with government agencies to build capacity, share knowledge and ensure the nation’s holistic development
In conclusion, the government needs to provide a further boost to startups and provide measures to widen the fundraising avenues. Ease of fundraising must be combined with easy access to affordable credits. With the right policy push the year 2023 will be a year of foreseeable technological innovations and advancements. Startups will redefine and transition into the new phase of human relationships with technology.
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