What start-up India and their entrepreneurs expect from Union Budget 2017

About a year ago the Startup India campaign was launched by PM Modi with the objective to boost entrepreneurship in India and undo “license raj” and other obstacles like foreign investment proposals, environmental clearances, land permissions and more. Several schemes, tax holidays and other capital arrangements were announced at the time, which helped thousands of start-ups around the country – in several sectors. With the budget 2017 around the corner, we asked the founders and entrepreneurs of Startup India what they’re expecting from the Union Budget 2017 and here’s what they had to say:

Sairee Chahal, Founder & CEO, SHEROES.in

“We look forward to more investment in healthcare and education sector. It would also be nice to see some work around lowering women tax and making the items affordable there by working on gender parity. And lastly, would be great to have support for the startup world.”

Sandeep Aggarwal, Founder, Droom and Shopclues

India must enhance various policies to ensure that capital in easily accessible to entrepreneurs. Having said that, government should not intervene when it comes to funds or bank loans. Rather, entrepreneurs should be provided easy access to seed funding, VC funding and angel funding. Money shall be coming to India and can be repatriated easier. No capital gain for any kind of start-up sale or exit. Make foreign listing for any Indian company straightforward rather than the company having to incorporate itself in every country individually and give R&D credit if someone is making innovative tech product.

Abhiraj Bhal, Co-founder, UrbanClap

“Keeping the startup industry in mind, the most important thing for a government to do, is to steer clear of setting too many policies and rules as well as making doing business very straightforward and easy. Minimum governance is actually very good.”

Shylaja Shreedharan, Head of Finance, Timesaverz

 “Government is being sustained with high tax collection due to demonetization hence expect the budget to propose low personal & Corporate tax rates. Start-up India Campaign Initiatives which kick started in last year would yield and benefit, if more of Indirect and Direct tax incentives are announced by the government. “Digital India” a buzz word after demonetization drive – expect some tax exemption for digital transactions which will be a good incentive for E commerce startups”

Kapil Goswamy, CEO and Managing Director, BigBreaks.com ​

From the budget we expect:

• Rollback of the service tax introduced recently on holiday packages
• Measures to improve liquidity in the system severally affected by demonetization
• Tax reforms and reducing tax rates so that there is more disposable income in the hands of people. More disposal incomes translate into greater expenditure including on travel and tourism
• Investment in improving road infrastructure to make road travelling more attractive

Madhu Pandit Dasa, Chairman, The Akshaya Patra Foundation

“The upcoming budget has raised expectations on various significant points. We are hopeful of an increase in allocation of funds in child welfare and educational sector – both primary and secondary. On income tax exemption for charitable activities, we hope that the exemptions already in effect will continue. Withdrawal of these exemptions is expected to discourage such donations, adversely impacting voluntary contributions.  Overall we expect that the budget creates a positive environment for child welfare and development, education and the social sector as a whole”

Purba Kalita, Co-founder, SaleBhai.com

“The government has been pushing for digital India and this aggressive thrust must continue so that every corner of our country can benefit from IT growth. Our small hometowns and cities have a lot to offer in terms of unique products and skilled workers, but with lack of infrastructure these remain largely untapped. Salebhai.com seeks to fulfil the needs of migrant populations in India and abroad by making all that they miss from back home available where they are. Our portal also allows one to discover regional goods. The company’s vision and mission largely depends on IT penetration in all corners of the country. I hope the government will allocate adequate funds and resources for quick IT proliferation in unconnected or ill-connected places for ease of business.”

Dr. Apoorv Ranjan Sharma, Co-Founder, Venture Catalysts

We expect the budget to invest significantly in strengthening the digital infrastructure of the country and supporting startup ecosystem to make this campaign successful. Government should bring in number of laws like No capital gains tax for first time entrepreneurs & esop holders, lower interest rates for business loans and easy long term repayments of turn around companies.

Capital gains tax regime for unlisted companies should be aligned with that for the publicly listed companies at least for investments made by SEBI registered AIFs.

In the union budget we wish to see exempting these startups from few 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 that do not make profits in initial years of their commencement. Therefore, such startups should be able to claim benefits of tax holiday of 5 years within a period of minimum 7 years from inception.