Even as the Budget 2023 is around the corner and is set to be presented in Parliament on February 1, various entrepreneurs are expecting measures to boost their respective sectors. Startups, which have seen financial stress in the year 2022 and layoffs, expect the government to continue support packages, which are already in place, for another year to support the new-age businesses.
Also Read: Budget 2023: Date, Time and Where To Watch Live Streaming Of Union Budget
Ratish Pandey, founder of Ethique Advisory, said, “For the startups, the winters came in early. The equity funding dried up, forcing startups to look at cutting costs, to extend their runway. The investors did not totally disappear; they altered their approach to offering venture debt. Despite that, startups battled the ‘funding crunch’.”
He added that while the slew of supporting packages introduced by the government to help startups post-Covid recovery continues. With the rest of the world grappling with the aftermath of a pandemic, recession, energy crisis, war, or supply chain breakdown, the Indian startup industry has been taking giant strides in creating sustainable solutions across various sectors.
With over 60,000 registered startups, India is the world’s largest ecosystem after the US and China.
“Startups continue to bring innovation and disruption in multiple industries, including space tech, edtech, femtech, health tech, and fintech, bringing tremendous opportunities for investors. With decisive leadership in place, the stage is set for the country to realise its vision of becoming a $5 trillion economy and global powerhouse by 2024-25. One is hopeful that Government will continue the announced support packages for another year to keep the momentum going,” Pandey said.
Aditya Malik, founder of ValueMatrix.ai and a mentor with the Nasscom DeepTech Club, said, “Prime Minister Narendra Modi has coined the agenda of ‘Innovate for India’ promoting new-age startups in the vision of making India a $5-trillion economy by 2025. The increasing demand for startups has made government introduce more policies with easy access to capital, incubator programs, and capacity building.”
He added that the capital expenditure in the government Budget can also stimulate the economy by providing opportunities for small and medium-sized enterprises to participate in government projects, which in turn creates jobs in these companies. The finance minister would be expected to introduce unique funding avenues to bring path-breaking innovation for the startups in the upcoming Budget 2023.
Nishant Behl, founder and CEO of Expand My Business, said, “India is poised to become a $25-trillion economy in the next 25 years, and startups will be significant contributors to this growth. However, this will certainly require greater support from the government through newer provisions and policies in the upcoming budget.”
There should be a special incentive for e-commerce businesses to establish warehouses and infrastructure in Tier-2 and Tier-3 identified locations, in a bid to enable seamless operations. Startups in IT and ITeS sector require greater support, and therefore the government must pertain to the per diem allowance threshold, safe harbour rules, and advance pricing agreements, thereby increasing the ease of doing business, Behl said.
He added that in the case of public market cap, startups need equalisation of long-term capital gains tax for unlisted shares and public stock investments, which is a long-standing demand. In addition to this, we are also looking forward to the minimum alternative tax (MAT) for eligible startups be reduced to 9 per cent from 15 per cent.
Punit Agarwal, founder of KoinX, said, “The year 2022 has been a rather interesting year for the crypto industry and the global economic sector in general. But, 2023 seems promising for web 3, crypto, and Blockchain startups. The major focus of the upcoming budget seems on preserving the financial integrity of crypto traders and investors.”
He added that the government is focusing more on preventing illegal activities related to VDAs, which suggests that the upcoming budget will not really give enough relaxation to the current crypto taxes. The upcoming budget is also expected to give us more clarification on the classification and taxation of VDAs. “We might also see more use cases and deployments for crypto in the Indian financial ecosystem, especially with the introduction of the Digital Rupee.”
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