Union Budget 2019: Startups, internet and technology companies have high hopes from the maiden budget of finance minister Nirmala Sitharaman. Three years after the launch of Start Up India scheme, it’s time for Modi government to give a big push to the Startup ecoystem in its first budget in its second term. Startups want more clarity over the issues like Angel Tax and easy access to funds to expand their operations.
Over the last three years, Modi government has announced several measures, including tax holidays for certified Startups, to develop the culture of innovation in the country. However, during this period, Startups also faced several problems like angel tax and lack of funds and looking forward to the Union government to announce certain relief measures for them in the budget.
Prime Minister Naredra Modi had launched the ambitious scheme in January 2016 to create thousands of startups. The government also helped them by connecting them with potential investors. However, three years down the line, raising capital is still one of the biggest challenge for the startups.
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Young entrepreneurs like Arijit Biswas, who have founded successful startups and looking for additional funds to expand their operations, suggest that the government should allow funding of startups by the PSUs under CSR activities.
“Funding of startups by the PSUs should be counted as a part of their corporate social responsibility activity,”said Arijit Biswas, who founded EnrichAI, a technology startup in Gurugram.
According to section 135 of the Companies Act of 2013, companies with a net profit of more than Rs 5 crore in a financial year are required to spend 2% of the net profit on social services. Entrepreneurs like Arijit believe that CSR funds of large PSUs can be tapped for funding startups.
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“In any case, these companies have to spend a certain amount of their profit on CSR activities. If they are allowed to fund startups under the CSR activity then it will provide entrepreneurs an easy route for funding,” Arijit Biswas, whose startup EnrichAI works in the field of Internet of Things (IoT) and Artificial Intelligence (AI), told Financial Express Online.
The Start Up India scheme was intended to turn young minds into entrepreneurs and job creators rather than job seekers. It was also considered important for promoting a culture of innovation in the country that is crucial for the fourth industrial revolution often talked about by Prime Minister Modi. However, three and a half years after its launch, startups and entrepreneurs have turned cautious in their approach due to issues like angel tax and shortage of funding.
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