The investor ecosystem has welcomed Finance Minister Nirmala Sitharaman´s Union Budget for 2022, which has rolled out several policies for ease of doing business in India, such as extended capital gains tax exemption on startups investments, reduced corporate surcharge rate, the Special Economic Zones Act, and an Expert Committee for VC/PE funding. The FM’s upskilling and reskilling schemes as well as special allocation for the Northeast is also likely to encourage investments.
The Tech Panda gathered the reactions, both positive and negative, of the investment community to find out how the budget has fared in the eyes of investors.
Read more: Budget 2022 reaction: STARTUPS
We are pleased that the capital gains tax exemption on startups investments is extended, as this will encourage more investment in startups
“We are pleased that the capital gains tax exemption on startups investments is extended, as this will encourage more investment in startups. In addition, the National Skill Qualification Framework will focus on enhancing skill-building and upskilling – as well as support for the job market.”
The government has also given an additional push to upskilling, reskilling, and skill development segment in the budget which will result in extensive use of technology which in turn will give a boost to the job market in India and encourage tech companies to invest in R&D and explore avenues to leverage existing tech and create new products
“The Indian government has shown its inclination towards digitisation in various fields. The government has given a strong emphasis on spending on infrastructure with the Special Economic Zones Act which will be replaced with new legislation for the development of enterprises and hubs.
“Alongside, the corporate surcharge rate that is reduced from 12% to 7% is needed to ensure that digitalisation penetrates even on to the small businesses. This means more money in the system and will act positively towards faster growth of the economy.
“The government has also given an additional push to upskilling, reskilling, and skill development segment in the budget which will result in extensive use of technology which in turn will give a boost to the job market in India and encourage tech companies to invest in R&D and explore avenues to leverage existing tech and create new products.”
The Budget 2022 reaffirms the Government’s push to make startups job creators and multipliers in one of the largest and most exciting economies in the world
“In order to promote long term investments in equity of startup, the rate of surcharge has been capped at 15%, irrespective of the amount of long term capital gains. This is beneficial for the individual investors who are holding shares for more than 12 months and selling them thereafter, thus treating gains on the sale of such shares as long term capital gains.
“We are also eagerly waiting for FM to announce measures to scale Venture capital and private equity as it has facilitated India in becoming the fastest growing startup ecosystem with an investment of more than INR 5.5 lakh crore last year. Overall the Budget 2022 reaffirms the Government’s push to make startups job creators and multipliers in one of the largest and most exciting economies in the world.”
The masterstroke was the next phase of Ease of Doing Business EODB 2.0 that has eliminated unneeded compliances and repealed primitive laws
“The masterstroke was the next phase of Ease of Doing Business EODB 2.0 that has eliminated unneeded compliances and repealed primitive laws. In addition, the Government-backed funds via SIDBI will further help scale businesses faster and attract more investments. It will also be interesting to see the digital currency and assets implementation and the policies around that. Integrating networking of roads and railways under PM Gati shakti will again serve to boost ease of business.”
Bringing in the unlisted equity taxation at par to the listed, will encourage more Mergers and Acquisitions (M&A) in India, allowing a substantial quantity of wealth to flow into the pockets of founders and investors, bettering the appeal for investors to invest in unlisted equities or startups in the country
“Firstly, I would like to express my appreciation and welcome the Budget presented by the government, which has been tremendously encouraging for India’s startup ecosystem. Bringing in the unlisted equity taxation at par to the listed, will encourage more Mergers and Acquisitions (M&A) in India, allowing a substantial quantity of wealth to flow into the pockets of founders and investors, bettering the appeal for investors to invest in unlisted equities or startups in the country. The administration is also proposing to form a committee to develop a framework for attracting more investments and monitoring regulations, which is a wonderful step forward from the eyes of the Fintech startup entrepreneur.”
We can expect a healthier credit line for budding entrepreneurs, and better penetration in Northeast regions reaching innovative businesses
“Indian startup industry has got recognition from our Hon’ble Prime Minister recently and announcing the establishment of an Expert Committee for VC/PE funding reinforce that the government has a vision and agenda to give the best facilities for boosting the growth of the startup industry.
“In addition to that happy to see that govt. sees the potential of the entire Northeast region and announced the Prime Minister’s Development Initiative for North East (PM-DevINE).
“For growth of any region growth startups and corporates play a big role with their disruptive business ideas. We have been mentoring startups in the entire eight Northeastern states – Assam, Meghalaya, Manipur, Mizoram, Nagaland, Tripura, Arunachal Pradesh and Sikkim. Coming more and more startups from the region is likely to create more job opportunities and help improve the employment sector. We have mentored 26 startups from the Northeast region till now through NEVF who are doing innovative work in D2C, tech, automobile, agri-tech, tourism, infrastructure, etc. We can expect a healthier credit line for budding entrepreneurs, and better penetration in Northeast regions reaching innovative businesses.”
Net positive for markets as more money in hands of big investors and high capex, can create long-term value for investors in core sectors
“Net positive for markets as more money in hands of big investors and high capex, can create long-term value for investors in core sectors. Add fiscal discipline with no populism and all-time high tax collection, this is perfect budget for market. Focus is on incomes rather than welfarism, concessions and handouts.”
The investment activity in the areas of green/sustainable, space tech and AI driven startups have been on the uptick the world over and it is encouraging to see a larger thrust on pushing innovation forward in these areas in our country too
“Budget has recognized the startup ecosystem in nation building and some of the measures like an extension of incentives by a year, planned infusion in MSME sector, investment in futuristic technologies, setting up of an expert committee to suggest measures to attract PE/VC investments are positive steps. The investment activity in the areas of green/sustainable, space tech and AI driven startups have been on the uptick the world over and it is encouraging to see a larger thrust on pushing innovation forward in these areas in our country too.”
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