Budget 2016 expectations of startups: From AasaanJobs, SHEROES to Myles, what startup founders want
Budget 2016 expectations of startups: Parliament session has begun and the spotlight is increasingly on FM Arun Jaitley and the kind of Union Budget 2016-17 he will present on the 29th of February. With PM Narendra Modi highlighting the Startup India Standup India scheme in his many campaigns to boost the Indian economy, we take a look at what some startup founders want from teh NDA government: (Reuters)
1. Budget 2016 expectations of startups: Most market predictions indicate that the Government would be focusing more towards the rural economy. It would be interesting to see how the Government follows suit on its promise of shifting away from subsidy based policies while adhering to the fiscal deficit targets. Initiatives encouraging rural entrepreneurship, skill development and vocational training should, in my opinion, be the government's prerogative to effectively increase employment rate and in due course the GDP. As far as structural reforms go, most eyes would be on the Bankruptcy Bill as well as the GST Bill, since these would be pivotal towards freeing up red tape and allowing businesses to adopt a more flexible model catering to the market. This would not only create a demand for new job roles in the services and manufacturing sector but also give companies the green signal to scale up their recruitment and grow fearlessly. Dinesh Goel, Co-Founder & CEO, AasaanJobs - Online market place for entry level and grey collar job-seekers.
2. Budget 2016 expectations of startups: With Government initiatives such as Make In India and Start-Up India to support entrepreneurs and foster growth, we look forward to a budget that supports such initiatives both at monetary as well as policy level. Expect clarity on taxation policies – direct, indirect along with ESOPs, tax relaxations, ease of doing business. Also look forward to less formalities, paperwork, legalities etc. to start up. By Sairee Chahal,Founder & CEO, SHEROES.in.
3. Budget 2016 expectations of startups: ST (Service Tax) is a bane currently for all start ups, especially the ones in controlled marketplace model. Hope the government is able to get a solution to this that is business friendly in this budget session. Miss Debadutta Upadhyaya,Co-founder, Timesaverz.com.
4. Budget 2016 expectations of startups: With Budget 2016 set to be announced on February 29, Startups have their own set of expectations from this year's Budget. While most of the new age companies are setting up with a strong funding foot, Major Prashant Rai, Founder and CEO, OneTimeJobs.com, is expecting more relaxation, possible tax exemptions and incentives with an easy entry into services and exit plans thereafter , along with more clarity on the norms. Prashant says that as the honorable Prime Minister Mr. Narendra Modi unveiled the start- up action plan by announcing excellent measures, now it depends on how the policy takes its shape in the budget 2016! He further opines that it is imperative for Indian 'on demand service market place start-ups' to raise funds in a more structured, regulated yet in a stimulating environment and being featured in Indian Exchange. Major Prashant Rai, CEO and Founder, OneTimeJobs.com.
5. Budget 2016 expectations of startups: With the Union Budget round the corner, startups in India are holding the highest stakes following the Prime Minister's initiatives around ease of doing business and building a start-up friendly ecosystem. Faster setting up of enterprises, correction to duty structures and streamlining of procurement processes are some of the areas where the industry expects key announcements. The Industry is expecting a quick implementation of GST, streamlining processes for speedier implementation of large infrastructure projects. Development of infrastructure is a prerequisite for growth. Similar to road and rail, creation of Digital Highways is elementary providing high bandwidth network of Internet across India. We’d like to see avenues of PPP in the coming union budget which will give shape to Digital India. IndiaMART - Dinesh Agarwal, Founder and CEO.
6. Budget 2016 expectations of startups: We expect the upcoming budget to involve the following: Tax breaks to spur growth - Startups need tax breaks. Taxing startups in the same manner as established companies makes a huge dent on our cashflows and hinders our capacity to grow; which is the most important thing for a startup. What we need - A three year service tax benefit for any startup with revenues upto 10 crore, wherein service tax can be paid after 3 years in a phased manner without any penalty/ interest obligation. TDS not applicable for 3 years of a startup and an income tax offset of upto 1 crore. Equity investments from angel investors should not be taxed in the hands of the startup irrespective of valuation - Currently, if an angel invests at a higher valuation than a startup, the startup needs to pay income tax on the amount taken over and above current valuation, which is taken as a) amount of equity put in by founders (if at the stage of starting the company). This means that one cannot start a company if they themselves don’t have the fund. b) Net worth of the company (if 1-2 years old company). Since startups would take at least 2-3 years to start generating positive cash flows, this again makes is difficult for startups to access funds. If both the company and the investor have agreed on a valuation, then that should not be challenged by the Income tax department. Umang Shah, Co-Founder & Head – Innovation & Marketing, RedMango Analytics.
7. Budget 2016 expectations of startups: With the union budget scheduled to be announced on February 29, entrepreneurs from the B2B industry have set all new expectations from the government. Sudhir Gharpure, Vice President, M.P. Group, an Integrated support Services company says “For PPP Projects, in Urban City Bus contracts should be pre-approved by banks for which ease of funding is there and implementation starts on time. As per the company’s act the life cycle of bus is Six years whereas it should be considered as Thirteen Years as the new type of buses and its body are sustainable to work over Twelve years. These projects should not be considered under Commercial Vehicle loan but should be under infrastructure project as urban/public transport is been considered under the smart city development which has a major share. The subsidy given to the bus purchasers should be increased to a viable level. The state / central government should encourage and support such organizations dealing in PPP projects which will enhance the transport industry to grow further. Such transport service providers should also be exempted from service tax and excise duty so that they can do business with ease." Sudhir Gharpure, Vice President-MP Group.
8. Budget 2016 expectations of startups: At a broader level, I would like the budget to address all the issues which are being talked about for quite some time now but are yet to reach the point of closure. Amongst all, tax reforms especially GST, generation of jobs, action plans for skill development, upliftment of rural India and FDI in more sectors clearly need immediate focus. One sector where I have great expectations is in the area of start-ups. While Start Up India has clearly shown the intention of the government in this area, the budget needs to follow it up with an action plan and clearly implementable rules around all the announcements. Taxability of angel investments and stopping the flight of start-ups outside India must be addressed. Anjani Kumar, Founder and CEO, SUCCESSWRKS.
9. Budget 2016 expectations of startups: Capital investment towards upgrading the existing infrastructure in terms of new roads and highways in the Union Budget will be a big win for the surface transport sector, which will also act as a booster for the car-rental segment that we operate in (both chauffeur driven and self-drive space). Easing of the tax structure and registration process of vehicles for commercial rental services will help fleet owners plan their fleet expansion and further reduce entry barrier for aspiring entrepreneurs. Further development of tourism hot spots and identifying new locations with related infrastructural support will ensure tourists considering India when planning their next vacation. Inbound tourism is on the rise and we are expecting the government to provide the much-needed impetus for the industry to grow. Sakshi Vij, Founder & CEO, Myles.
10. The major expectation w.r.t blue collar industry is when it comes to execution, with more than 11 thousand ITI college (Industrial Training Institutes), bridging the gap between customer and handymen is not so difficult, all we need is great execution and getting professionalism into place. Construction industry can be a pivotal determinant factor for our country's development. EasyFix in its mission to revitalize the blue collar industry and bridge the expectations of the Brands in the market is leaving no stone unturned within the country. Government alignment of goals with the startups can create a win win proposition for the mass benefit which we are sure will transcend the national boundaries and create the brand “Start-up India” abroad At the prima facie, the current government for the first time in Indian history has augmented the cardinal role of the “start-ups” by its flag-ship programme “The Start-up India, Stand up India”. Shaifali Agarwal Holani, Founder & CEO, EasyFix.
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ANALYSIS / EXPERT COMMENTS
- Meghnad Desai
India needs a body like the UK’s Office of Budget Responsibility
- Anita Rastogi
In addition to simplifying the taxation structure, implementation of the GST regime will help eliminate most indirect tax issues
- Nirvikar Singh
Repressive regimes fail to deliver inclusive and substantive economic growth
- Anwar Shirpurwala
Extend duty incentives for mobile phones and tablets to all Information Technology Agreement goods
- Eric Mehta
Will this Budget be an enabler for ‘Make in India’, ‘Make for India’ and, most importantly, ‘Make India’ is something that will soon be answered