By D Majumdar

There are multiple areas in which startups and investment firms could have their expectations and look for areas of support from the upcoming Interim budget in 2024.

Continuation of current schemes

First and foremost, there are many schemes that the government has already announced for startups. For example, the Startup India seed fund which early-stage companies can avail of, based on certain eligibility criteria. There is a need to not just extend such schemes but also to look at how best the ecosystem partners, including incubation centres etc., are able to help eligible startups get the right and timely disbursement of such allocated funds.

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On a similar note, the government has already been working on critical multi-modal infrastructure and logistics projects that can enable easier movement of both people and goods across our country, solving for both last-mile connectivity as well as easing congestion across over-used transport modes.

India today has a base of Internet users now and higher expected growth of the domestic consumption-led economy. On one hand, more such consumers are getting more used to e-commerce as a way of buying online and on the other hand more companies enabling their products and services to be sold through online channels. In this light, the continued infrastructure and logistics continued investment will be a game-changer for every company involved in the value chain.

Tax breaks and changes

Tax is another area entrepreneurs will study closely. Any positive changes in tax norms, be it in terms of GST levied or on tax breaks, will be critical for entrepreneurs. On a similar note, a long-term demand from the startup community has been about the simplification of areas such as angel tax and ESOP taxation regulations. Any changes in these areas would be welcome news again for entrepreneurs and investors.

Entrepreneurs and investors in each sector will be looking at any specific announcements for their specific sector. There could be, for example, emphasis laid on agritech innovations, deep tech innovations, fintech innovations and the like which entrepreneurs will be keen to ensure they are aligned with. 

From Labor laws to education shifts

Another important aspect is any changes expected in labor laws, especially around gig workers and payment norms. Given many new-age startups depend on gig workforce in some of their activities, any announcements in these areas will be important for them to assess and track.

The New Education Policy and recent Education guidelines have also been actively bringing in systemic changes in our country’s education system and in the education-employability landscape. To support more entrepreneurship, support for research and incubation across small towns and cities of the country might be a welcome move.

Investment allocations

With the ongoing funding winter, last year has been a hard one for private equity access for entrepreneurs. Public listings from startups have also been muted. While there are many entrepreneurs, especially, the ones, we see, across small towns and cities of the country, who will be driving their stories of innovation by solving local challenges, without raising too much external capital, capital access will be a need for some stages and types of company growth.

Support in terms of domestic capital access would be a welcome step for entrepreneurs. This could mean both higher unlocking of credit access for small and medium entrepreneurs, which even today, face a lack of access to credit, to support for domestic high net worth individuals and companies who can directly bring in capital infusion in the innovation economy, in the form of angel investments or investments as Limited Partners in existing funds. A fund-of-funds structure from the government to aid easier funding access for growth-stage firms would also be welcome.

Digital infrastructure led innovation

From UPI to Aadhar to Digiyatra and more, there have been many instances where open digital public goods and infrastructure have been shaping pioneering work in the country. While some sectors are more naturally connected to these innovations, given the government’s ongoing support for the Digital Economy, we do expect more support from digital public infrastructure and goods which can in turn spur entrepreneurial ambition and innovation.

Given the close link between innovation, job creation, and economic growth, as part of our vision to become ‘Viksit Bharat’ by 2047, we do expect to see a deep nurturing of the entrepreneurial and investment ecosystem of the country. And the budget will be one of the key milestones to set the compass in the direction of sustained growth for entrepreneurs right from the policy support level. 

D Majumdar is VP of Strategy and Research at Artha School of Entrepreneurship. Views expressed are the author’s own.