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Technology startups in India are doing well but facing strong headwinds from all directions and their future is clouded by uncertainty. With PM Narendra Modi himself taking personal interest in the startup space with his Startup India Standup India campaign, this nascent industry in the technological space is hoping that FM Arun Jaitley provides a substantial boost. So, from Raghav Bahl, Founder, The Quint, Sandeep Aggarwal, Founder and CEO, Droom and Satish Kataria, Managing Director, Catapooolt, here is all you need to know about what startups in India are really looking for from the Union Budget 2016: (Image: Reuters)
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1. Raghav Bahl, Founder, The Quint: We need only two things: one, more bandwidth/spectrum; and two, a level playing field on taxes. Why should a rich, old, viable, lucrative medium like print advertising be exempt from service tax, while the fledgling, entrepreneurial, technology driven Internet advertising is skimmed? (Image Source: Website screen shot)
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2. Shailaz Nag, Co-founder & COO, PayU India: "Today, India has a critical mass of people who are online and have access to electronic instruments of payments. With Digital India, we have the right platform to move from a cash dominated economy to a less cash economy in medium term & a cash less in the long run. RBI and Govt have been very pro-active in facilitating innovations in electronic payments. Indian consumers have often surprised the conventional wisdom when it comes to adopting new ways of doing things – telecom, internet. If right incentives on both supply (Merchants) and demand (Customers) side are announced in this budget session, it would push the quick and wide adoption of electronic payments. With the launch of Startup India, we are very confident about Govt’s focus and due importance to Startups. We would like to get more details on operationalization of Startup India. It is fairly certain to say India could soon emerge as one of the top three Startup hubs in the world given its natural inclination for Enterprise and support of establishment. (Image Source: Website screen shot)
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3. Sandeep Aggarwal, Founder and CEO, Droom: Internet is an enabler of growth and visitor Highways should be simulated, similar to our rail and road infrastructure. Allocation of budgetfor creating a robust network of Internet connectivity across India is elementary. In the union budget we wish to see avenues of public private participation with telecom Operators. The same is the key to Internet growth; unless our telecom providers do not fuel our masses with bandwidth and affordability, Digital India would be a distant dream. Subsidy on smartphones is my next expectation, buying a smartphone is much easier than buying a desktop / laptop. The current Tier 2 and 3 cities and rural India thrives on these devices and smartphone reach will only make them stronger and smarter. It may give rise to evolution of many new Enterprises. Lastly, GST would be a game changing reform, it will enable a country wide, single market with reduced transaction costs for businesses and controlled economic volatility. (Image Source: Website screen shot)
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4. Mohit Mittal, Founder & CEO, Voodoo: Mohit, who has been successfully starting up his businesses since his college days at IIT Madras is very positive and believes in promising changes in the startup environment from this budget. He says, "After the 'Startup India' initiative from the prime minister, new startup founders & entrepreneurs are holding their hopes and expectations high from the upcoming entrepreneur-friendly tax regime at this Union budget." Talking about the taxes and growth structure in startups, he added, "exempting these startups from few direct and indirect taxes will also foster their growth and ensure a propitious ecosystem for them." (Image Source: Website screen shot)
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5. Soumitra Gupta, Founder & CEO, Togofogo: Few expectations from the budget are clarity on FDI in e-commerce and simplification of the indirect tax regime. Reduce state wise differences in indirect taxation to simplify pan India operations for many companies especially startups. Either GST comes soon or taxation improves. Also, reduction of import duties with an option to allow businesses to ‘Make in India’ will be a welcome move. Subsidies at ground level will make Entrepreneurs feel protected & safe. Digital literacy and mobile internet penetration intier 2, tier 3 cities are other areas onto which we would like to see the Union Budget’s focus. (Image Source: Website screen shot)
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6. Ranjit Punja, CEO & Co-founder, CreditMantri: Following the Jan Dhan Yojana and the new payment bank licenses, it is only logical that we are likely to see a large outlay in the Budget to build rural connectivity so as to enable increased digital penetration within unserved segments of the population. Building brick and mortar bank branches will take too long and it is imperative that access to a bank and the ability to send and receive Mondaywill be digital. We are also likely to see a reduction in excise duty on hardware required to promote a Digital India. (Image Source: Website screen shot)
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7. Neeraj Jain, CEO & Co-founder, Zopper: "The govt should discuss special plans and incentives for offline retailers to compete with FDI funded online retailers. The offline retail is largest employment generator in the country and govt should bring about major incentives for this sector. Also, the budget should have specific measures to increase digital connectivity across the country." (Image Source: Website screen shot)
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8. HarshVardhan Lunia, CEO & Co-founder, Lendingkart: “The recently launched 'Startup India' initiative has stirred-up optimism amongst entrepreneurs. However, there still subsists a need to exempt startups from direct and indirect taxes, with MAT (Minimum Alternate Tax) being the key one as it will help entrepreneurs reduce burden and cash outflows. While tax holiday certainly brings a sigh of relief, it may not be beneficial for many technology startups who do not make profits in initial years of their commencement. Therefore, such startups should be able to claim benefits of tax holiday of 3 years within a period of minimum 5 years from inception. Furthermore, since service tax liability proves onerous for entrepreneurs, there is a need to reconsider that as well.” (Image Source: Website screen shot)
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9. Uday Reddy, CEO & Founder of YuppTV: "Road map to GST in the upcoming budget will go a long way in both increasing the ease of doing business and reducing the cost of doing business. Further rationalisation of local taxes into GST will also pave the way for incubation and higher growth of digital businesses. Fiscal incentives for broadband infrastructure penetration and consolidation of broadband play is required to usher in digital revolution and to bring India on par with developed countries." (Image Source: Website screen shot)
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10. Satish Kataria, Managing Director, Catapooolt: "With the year starting on Hon'ble PM's Start Up India Movement announcement and various proposed measures – this year's budget could be revolutionary milestone towards strengthening India's start-up movement – ofcourse provided that the proposed measures are implemented with right spirit and right fine print! Further, we are aware of the Special Committee that is being constituted under the Ministry of Finance to look at various innovations to ease up start up funding – which we believe is also looking at domain of crowdfunding. We are hopeful, that similar to other developed nations acknowledging and opening up crowdfunding, India too would look at this medium positively – as it can well sync up with several newly proposed measures such as proposed INR 10,000 Crore start-up fund (where a possible plug in with crowdfunding can bring true elements of market validation of innovative ideas as well as engage larger communities to come on board) as well as National Start up Hub (where it can connect early stage start ups with other enablers). In short, we expect and hope that this budget would place a new milestone towards acknowledging and supporting the role of entrepreneurs in shaping the next India. (Image Source: Website screen shot)
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