Union Budget 2019 India: Along with Tax and ROC, new compliance requirements as well should be done as part of a single process rather than doing as a one-off at different times during the year.
By Nitin Chhabra
Union Budget 2019 India: As the country gears up for our finance minister Nirmala Sitharaman to present this year’s budget, our mind rolls back to one of the statements which our former finance minister Arun Jaitley made about how venture capital funds and angel investors need an innovative and special developmental and regulatory regime for the growth of start-ups. However, the Interim Budget from February 2019 steered clear of the issue.
There is no doubt that more work needs to be done to boost the start-up ecosystem. One of the key concerns that the start-up community has is about the stringent regulatory norms that are hindering operational efficiencies for many such companies. First, all tax and ROC compliance should be done once a year in a specified time frame and as a single process. Even new compliance requirements should be done as part of this rather than doing as a one-off at different times during the year. This will reduce the time and cost of using professional service. The processes such as TDS payments should be done through the direct debit process that should include all banks rather than a few banks only.
Streamlining infrastructural requirement
In order to encourage setting up of new businesses, the government should set up hubs around the country. These would be physical hubs where startups will have access to shared services such as legal, accounting, company management, etc. at reasonable or no cost. Three-four such hubs in every state will motivate people from all parts of the country to start a venture and with an automatic start-up fund and the hub service, they can overcome any entry barrier that might have existed otherwise.
Investment in technology hubs
With technological disruption being key for startups growth today, the government should encourage investments in technology hubs that will help to strengthen domains such as artificial intelligence, machine learning, etc. The government must also bring in some respite from GST by reducing the tax slabs for technology services and products which would encourage early adopter market to flourish in the current ecosystem.
(Nitin Chhabra is the CEO at omnichannel e-commerce platform Ace Turtle. Views expressed are the author’s own.)