With last year’s budget release of nearly Rs 11,000 crores, the expectations of the start-up industry have definitely increased. Programs like Make in India and Digital India are great initiatives for the technology revolution, but what the IT sector and start-ups in particular are really looking forward to in the upcoming budget, is service tax exemption. With an expected increase in the number of start-ups going from 3100 currently (as reported by Nasscom) to 11500 in the next 5 years, we expect to attract a lot of angel and institution investments. Hence, unveiling tax reforms will definitely help in facilitating faster growth over the short duration. The new tax reforms are expected to boost revenue and make it easier to do business in India. Adopting policies in the same line as the Singapore tax regulations will definitely benefit the start-up industry on a large scale.
Impact on employment and sectors
The improvements to the income tax system will also carry major benefits for the enterprise and for job-creation in the start-up industry. With an expected increase in investments and implementation of tax holiday policies, recent start-ups are expected to make higher investments in hiring skilled talent to facilitate faster growth. Also, by increasing the basic tax exemption for limit to 20-30% will help to keep the salaried happy.
Most of the IT/ITES and power industries are expected to receive the benefits of the new tax reforms. The new budget is expected to welcome bigger investments for various industries. But the manufacturing industry will attract most of the domestic and international players for investment considering the growth of our economy on a larger scale.
Change in manpower outlook
The new government has definitely realized that we need to scale up our skill development programs to include the rural population for the nation’s overall progress. Hence, launching new programs like ‘Skill India’ will definitely be one among the revolutionary programs. The current institutional and educational system does not believe in practical training programs and is restricted to theoretical knowledge which does not help individuals find employment opportunities to match their skill set. But since most of our industries are struggling to employ skilled labor, they are investing a lot in providing training programs. By proper budget allocation for education and vocational training, productivity and profitability can be increased tremendously.