In Budget 2022, Finance Minister Nirmala Sitharaman has announced an extension of one year for the incentives provided to them. This is to provide relief to start-ups keeping the impacts they have faced due to the pandemic.
“In view of the Covid pandemic, I propose to extend the period of incorporation of the eligible start-ups by one more year that is up to March 31, 2023, for providing fast incentives,” Sitharaman said.
The Finance Minister further stated, “Startups have emerged as a growth driver for the economy. Tax incentives for startups increased from three years to four years of incorporation, in view of the pandemic,” the minister said while announcing the Union Budget 2022.”
In fact, India - with 90 unicorns - is the third-largest unicorn hub behind the US (487) and China (301), and ahead of the UK (39). New Delhi: Indian startups have raised $42 billion in 2021, up from $11.5 billion in the previous year, according to a report by Orios Venture Partners said.
Hiren Shah, Founder,The Men's Lab says, "The startup industry contributes a lot to the economic growth of the country. We are extremely delighted that the government acknowledged the role of this industry and gave reasonable exemptions to our sector. We are happy that the government has given 1-year tax relaxation for startups, this would help us recover in the post-pandemic era and offer better products and services to our customers. The budget allocation of 5.5 Lakh Crores also seems fair and would help us grow as an industry in the coming year. Also, the digitalization model will help us and the consumers more in easy transaction options."
Purvi Rohit Pugalia, Co-Founder, Not So Pink states, “The budget has been extensively focused on startups and digital push which is a great thing for the e-commerce sector. Since many retail players started in the post pandemic period and have sizable operations in the digital medium, this opens up new requirements for digital skills and expertise. API based skill credentials, secure payment layers for jobs and the upcoming digital upskilling program will help empower company owners as well those looking for opportunities to be more relevant in the current climate. While being a part of the digital ecosystem, there is no dearth of challenges for the existing startups. The announced tax redemption extension will go further along offering relief to business owners who are looking to streamline their operations and channelize their capital for scalability in the long run."
Sanjay Desai, Director, Fabcurate says, "This budget is a continuation of a great budget that was presented last year. There are many positive points in this budget about the retail industry and especially the small industries. More investors are going to invest after this and this will broaden the scope for doing business. It is a roadmap for a sustainable economic recovery. It is focused more on ease of doing business, and it will bring a better policy and regulatory environment for retail."
Rohit Sahni, CEO & Co-Founder, WK Life says, "This is a welcome budget for private enterprises and startups as it addresses our needs. The proposal to reserve 25 percent of the R&D Budget for Startups and Private entities is an excellent move. To provide monetary relief to startups, Finance Minister Nirmala Sitharaman has also announced an extension of one year for the incentives provided to them in view of the pandemic. However, nothing much has been announced for the retail sector which was expecting some major announcements. We expected that the union budget will provide financial support/incentives, particularly for small and medium-sized businesses, to help accelerate the digital India vision. So we can say that it is highly disappointing that there is nothing for the most affected sector that is retail sector”
Porus Doctor, Partner and Consumer Industry Leader, Deloitte India says, "Ease of Doing Business (EoDB) 2.0 is a step in the right direction and Single Window clearance mechanism will go a long way in improving EoDB in India and making India a more investment-friendly destination. In addition, until such time that private consumption and private capital expenditure pick up steam, the government spending on capital expenditure which has been increased by 35.4 percent to Rs. 7.50 lakh crore in 2022-23 from Rs. 5.54 lakh crore in the current year will have to play a huge part."
Harshil Salot, Co-founder, The Sleep Company says, "The budget announced by the government today has been an incredibly encouraging one for India’s startup ecosystem and is an encouraging indication of the future roadmap of India’s digital transformation. As a made-in-India startup, the ECLGS 1 year extension is a great initiative that can aid SMEs to help sustain some semblance of normalcy and business momentum in these challenging times. Furthermore, the launch of the 5G spectrum can be a game-changer in increasing the speed of digital transformations across different spheres; specifically for the D2C ecosystem that has y-o-y been making significant in-roads into India’s heartland, connecting more consumers to products and essentials that they otherwise would not have access to."
Apurv Agrawal, Co-Founder, Avni says, "The pandemic has unravelled a lot of loopholes in the Indian healthcare system. Certainly, health was to stay a priority in the budget. The Budget announced the launch of an open platform for the National Digital Health Ecosystem . This will provide easy access to the available health facilities and health providers. Absence of the right information had created a ruckus during the first and second wave of covid. We are glad that the government took note of the same and has now resolved the challenge too,"
Aashka Goradia Goble, Co-founder , RENEE Cosmetics says, "The Budget has granted the most popular wish of startups for extension of tax holiday. Now the Hon’ble FM has extended the startup tax holiday scheme to startups incorporated till March 31, 2023. This was also important as the last 2 years have been challenging for those who had just stepped into entrepreneurship and are struggling to keep their startup alive. Additionally, the surcharge on long-term capital gains (LTCG) tax has been capped at 15 percent. This will reduce the burden on startups in terms of ESOPs and other transactions too."
Abhay Batra, Chief Financial Officer, Clovia says, “The government’s decision to extend the period of incorporation for start-ups by one more year that brings them tax benefits is a welcome step to further boost the startup ecosystem during this pandemic time. Incentivizing and strengthening the initiative of ‘Make in India’ and ‘Atma Nirbhar Bharat’ by removal of exemption on items that are or can be manufactured in India and providing concessional duties on the raw material that go into the manufacturing of intermediate products will take Indian manufacturing industries to the next scale. Government's focus on economy macros more vs a populist approach is also a welcome step.”
Sachin Agrawal, Co-founder & COO, Bizongo says, "A key component of boosting exports are customs reforms, which have been highlighted by the Finance Minister today. We believe, that the integration of customs reforms into the overall logistics plan will further accelerate economic transformation. By lowering the barriers to mobility, MSMEs will be able to avoid costs caused due to delays in the movement of goods, and ensure better capacity management. We are optimistic and hopeful about the future of the logistics and supply chain industry in India.
Kapil Makhija, CEO, Unicommerce states, "The budget’s elaborate focus on building digital economy and technology-enabled development is extremely encouraging. As mentioned during the budget that start-ups have emerged as growth drivers for our economy showcases the immense potential of India's startup ecosystem. Its evident that the government’s push on 5G, connectivity and logistics will help the ecommerce industry to develop and grow further. Technology will be a key enabler here leading to improve logistics and ensure faster deliveries. We are excited to see this growth journey and are extremely optimistic about the future. Brands and companies’ increased focus on Tier 2 and Tier 3 cities will prove to be the real game-changer. We look forward to continue to partner with the ecosystem players and simplify e-commerce selling with our technology solutions that will support the nation’s growth objectives, generate employment and strengthen India’s digital economy.
Sujeet Kumar Mishra, Co-founder & CEO, Winni says “Although it is encouraging to see that more innovative startups are contributing to the Indian economy, the pandemic that ravaged the country for three consecutive years took a toll on the new brands. While startup tax incentives have been increased from three to four years after incorporation, the conditions remain the same. It would have been beneficial if the tax rebate had been expanded from Rs. 25 crores to Rs. 50 crores turnover.”
Yagnesh Sanghrajka - Founder and CFO - 100X.VC says, "ell, I think it's a great budget in terms of the infra & the capital goods push so every startup that is probably serving these industries will get a leg up. The extension of the one-year period for new startups is a welcome move. The taxation of digital assets was anyway expected. A lot of positive announcements for Health-tech, Ed-tech, and EV startups; The whole digital push will benefit startups overall. It was a good budget by the FM."
Tanmay Kumar, Chief Financial Officer, Shiprocket states, "We appreciate Government’s empathy towards the start-ups by extending the period by a year for start-ups to avail tax incentives around the tough times of Covid. The announcement of 'One station, one product' under the PM Gati Shakti plan will help the supply chain of local products. The budget has focused on the development of infra projects which will boost the logistics system in India and will help us to become enablers of effective logistic system. The Government has emphasized on digitisation of payments and it’s a good news for small businesses and entrepreneurs who wants to start their business."