With the latest budget release by Arun Jaitley, it was expected that many open ended loops will be closed for tech startups like tax relaxation, more youth programs for budding entrepreneurs, relaxation for angel investors etc. Even though a promising budget is released from a startup perspective and rate of Income-tax on royalty and fees for technical services reduced from 25% to 10% to facilitate technology inflow, few of the expected changes have been postponed for next year such as service tax relaxation on products and the simplifying the complex Company Act 2013.
Currently initial sum of Rs 150 crore is promised to create world class IT hub to take advantage of our competitiveness. Other concerns of IT industries for a more liberal system of raising global capital, incubation facilities in our Centres of Excellence, funding for seed capital and growth, and ease of doing business etc. would be addressed for creating hundreds of billion dollars in value. We are expecting these programs will add on to our advantage with other initiatives like ‘Make in India’ and ‘Digital India’. Government is also establishing the mechanism ‘self employment’ to support all aspects of a startup business. This would be beneficial to build a new or existing startups from the scratch. The budget also included hopes to improve ease of doing business in India with minimum government and maximum governance.
One of the most promising aspect was about reducing the corporate tax from 30% to 25%, but it is again a plan which will be executed in the next 4 years. Government is also establishing the mechanism ‘self employment’ to support all aspects of a startup business. SETU (Self-Employment and Talent Utilization) will be set up as techno-financial, incubation and facilitation programme to support growing startups. 1000 crore is promised to be set aside as initial amount in NITI. These initiatives will definitely encourage and grow the spirit of entrepreneurship – to turn youth into job creators.
Though there is nothing much in the bucket for the angel investors who are the main source for any startup growth, we hope that the promised programs will be executed effectively & results would be seen unlike last year.