Union Budget 2020 India: The second budget presented by the Finance Minister Nirmala Sitharaman on Saturday resonated quite well among the top startups in the world’s third-largest startup ecosystem. Sitharaman announced a slew of measures to boost the growing number of technology startups as India stands behind the US and China in startup count. Among the top sops announced by Sitharaman included a proposed seed fund to support ideation and development of early-stage startups and easing the burden of ESOP taxation on the employees by deferring the tax payment by five years or till they leave the company or when they sell their shares, whichever is earliest. Nonetheless, here’s what top startup managers said about today’s budget:
The budget’s focus on enhanced digital connectivity and on emerging technologies like machine learning and artificial intelligence, along with the allocation towards quantum computing are sure to provide a fillip to the economy, said Vikas Garg, CFO, Paytm. The proposal to reduce corporate taxes and the inclusion of more industries in the scheme is a very positive move for businesses, Garg added along with welcoming the proposal to set up dedicated investments cell for single-window clearance to encourage foreign direct investment.
Helping Decision Making
The higher time and turnover limits for carrying forward of losses for start-ups will enable them to optimize growth decisions in formative years, said Snapdeal’s CEO and Co-founder Kunal Bahl along with highlighting the Finance minister’s announcement for deferring ESOP taxation by five years. Measures to improve access to finance for MSMEs and reduced taxation for the middle-income segment are welcome steps. Boosting physical infrastructure, expanding digital connectivity and growing use of technology in government functioning are important building blocks for the long-term growth of the Indian economy, said Bahl.
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Bodes Well for Hospitality Space
The budget focuses on improving standards of living as well as economic development. A grant of Rs 2,500 crores for tourism promotion and the development of five iconic archaeological sites and museums in the country are bright indicators of the renewed focus of the government on the travel and tourism industry, according to Rohit Kapoor, CEO, OYO, India South Asia. The overall focus on increased disposable income, better infrastructure, better connectivity and the digital push will help boost demand for the hospitality industry in India.
In the current macro environment, more money in the hands of consumers through rate cuts, elimination of DDT etc. bodes well even as the Finance Minister has also set the tone at the top by being empathetic about no tax harassment, resolving litigations etc., said Neelesh Talathi, CFO, Pepperfry. Furniture is a $42 million category in India with MSME dominating the industry. Resolving credit issues, APP-based working capital solutions and more strategic aspects like National Logistic Policy, said Talathi are all initiatives that address core issues of our MSME sector.
It is very encouraging to see this government and the budget continue to recognize the startup ecosystem as the main locomotive of long term sustainable growth for India, said Sandeep Aggarwal, Founder and CEO, Droom. The government stressed on new age solutions like AI, ML, IoT and Robotics for driving innovation. “It is great to see that budget announcements bring the perspective of boosting investments and encourage startups that are strongly working on these technologies to bring disruption and viable solutions for different verticals,” said Aggarwal.