India Budget 2019-20: With Narendra Modi, a visionary and start-up supporter, being elected for a second term, all hopes are pinned on the new government for similar programmes and reforms.
- By Ajith Mohan Karimpana, Founder and CEO, Furlenco
The new government is all set to roll out the first set of policies as part of the budget. While last year, a lot of focus was given to start-ups and making things conducive for them, this year, the policies must be aimed at more concrete action. The government had announced a promising initiative in the form of a national programme on AI. With Narendra Modi, a visionary and start-up supporter, being elected for a second term, all hopes are pinned on the new government for similar programmes and reforms. Here are some of our expectations from the budget.
Gaining access to debt
The ‘Digital India’ initiative has given a significant boost to the start-up ecosystem in India. It is imperative therefore that the government keeps the start-up spirit alive by providing support wherever needed. A possible move could be to make it easier to gain access to debt, especially from the public sector banks. Introduction of schemes that promote bank loans at reasonable rates can benefit start-ups that are yet to record profits.
Easy tax filing
Apart from this, considering that they are already burdened by a number of regulatory requirements, simplification of compliance and tax filing procedures would be an encouraging move, especially for new start-ups. While the government brought down tax rates for companies with a turnover of less than Rs 250 crore last year, I am hoping that this benefit will be extended to larger businesses as well. Tax sops must be offered to companies that promote environmentally sound practices and renewable energy technologies apart from those that are manufacturing or sourcing their raw materials indigenously.
I also expect this year’s budget to iron out issues such as those surrounding the Angel Tax reform. The government also needs to come up with a favourable ESOPs taxation policy. Capital gains Another aspect that I hope the government will consider strongly in this year’s budget announcements is the application of capital gains. Capital gains must be made applicable at the time of sale of equity and brought at par with the capital gains tax rates of listed companies. The government must also consider universalizing the e-KYC initiative so that Fintech and subscription-based start-ups can operate in a hassle-free environment.
- Ajith Mohan Karimpana is Founder and CEO, Furlenco