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Whither Digital India? Budget 2016 offers little for startups

By Nivedita Mookerji
March 01, 2016 10:32 IST
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There has been nothing consolidated in the Budget for this section that may transform entrepreneurship in any meaningful way

Startups, in some ways flavour of the season, have got some relief in bits and pieces scattered through the Union Budget. But there has been nothing consolidated in the Budget for this section that may transform entrepreneurship in any meaningful way.

As promised, they have been given a 3-year tax holiday and capital gains exemption, in addition to a special patent regime. But, there’s nothing out of the box or any surprise package.

The first mention of start-ups came up in the 45th minute of the Union Budget speech of Finance Minister Arun Jaitley. In the build up to the Budget, start-up sector was projected as a flavour of the season. But the FM referred to start-ups as an aside while half way through his speech. The reference was in the context of entrepreneurship in the transportation sector.

About 15 minutes later and one hour into the speech, the FM spoke of startups the second time. This was also as an aside, while he elaborated on ease of doing business. The Companies Act will be amended that will enable setting up of startups in a day. This was already spelt out in January by Prime Minister Narendra Modi in his much hyped Startup India Action Plan event in the capital’s Vigyan Bhavan where hundreds of entrepreneurs had gathered to listen to government’s offer for them.

Also, some of the startups may gain from the revised ceiling for presumptive taxation scheme. Under this, the ceiling for income has been raised from Rs 1 crore to Rs 2 crore.

Even before any mention of startups, Jaitley spoke of Standup India - the other part of the Startup India Standup India scheme that the PM had highlighted in his Independence Day speech last year.

Standup India already got the Cabinet clearance for a scheme to boost entrepreneurship among SCs and STs. The FM reiterated that half an hour into his Budget presentation.

In the end, the government announcements for the startup world lacked any sign of steroids, unlike in January when entrepreneurs sat enthralled listening to the PM.

Disappointments include no mention on the exit policy and listing norms for startups in the Budget presentation. Already in an environment of valuations being downscaled, startups certainly looked for more to boost their spirits.

Photograph: PTI

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