Government in the Budget next month will announce a friendly tax regime that will encourage setting up of startups in the country, Finance Minister Arun Jaitley said today.
“We have already worked upon an entrepreneur-friendly taxation regime. There are some steps, which can be taken up by notifications, which would be taken forthwith. Others require legislative provisions, which can only come as part of the Finance Bill when Budget is presented in order to create a friendly taxation regime for startups,” he said at the Start Up India conference here.
Recognising the need to encourage startups, a fund was suggested in the Budget last year, he said.
He assured the startups that both the banking system and the government will make the resources available to them.
Besides Start Up, the Finance Minister said the government will launch Stand Up India scheme under which, bank branches will lend to entrepreneurs belonging to SC/STs and women.
“On Independence Day Prime Minister (Narendra Modi) announced the Stand Up India scheme. The Stand Up India would be separately launched. It is a programme, which envisages women entrepreneurs and entrepreneurs belonging to the SC, STs (to get funding from banks). These were the segments which were not throwing up entrepreneurs.
“Each bank branch, public sector or private sector, would actually adopt one in the SC/ST category and one in the women category. So they will adopt two such entrepreneurs and fund them to set up establishments,” he said.
By funding trading or manufacturing establishment of this segment, almost 3,00,000 new entrepreneurs over the next two years will be created, he said.
On the economy, Arun Jaitley observed that India has its own challenges despite being the fastest growing large economy in the world.
“Unquestionably, the world economy has slowed down. Now we can take a limited satisfaction that even in a crisis like situation in the world, we are growing much faster. The world recognises us as probably the fastest growing among the major economies, but then we are not without our own challenges,” he said.
“We are fully conscious of the adverse situation in which we are. We are struggling to keep respectable growth rate (despite) certain advantages like we have a booming services sector, we have a manufacturing sector slowly growing, we have increased our public spending, we have opened our doors wide enough and foreign investment is coming in a big way, at least in the urban areas we can see an increasing demand,” he said.
These are the engines that are keeping this growth rate alive, he said.
Talking about headwinds to economic growth, the finance minister said, slow agriculture production due to weak monsoon and subdued private investment are a few challenges.
“If you look at the direction in which the conventional global economy is moving today, we almost are moving from a crisis situation literally by the day. Nobody really can envisage looking down the tunnel as to what the situation of the world economy, one year or two year from now is going to be. Nobody can seriously predict as to what the emerging challenges down the few months are going to be,” he said.
“Earlier crisis like situation came once a decade, today it may emerge twice in a day. You may have the impact of Chinese economy and their currency on one part of the world and you may have the oil prices striking you at the other part of the world and you will have a global impact simultaneously of these challenges,” he added.