Last year, the Indian startup ecosystem welcomed the 2021 Union Budget for its tax relief, incorporation of One-Person Companies (OPCs), and funding.
This year, before the 2022 Union Budget, Prime Minister Narendra Modi’s declaration of January 16 as ‘National Startup Day’ has hopes up from the startup community.
In an interaction with over 150 startups on January 15, 2022, as part of Azadi ka Amrit Mahotsav, Prime Minister Narendra Modi declared January 16 ‘National Start-up Day’.
This decade is being called as ‘techade’ of India…to strengthen the innovation, entrepreneurship and startup ecosystem have important aspects like liberating entrepreneurship, innovation from govt processes, bureaucratic silos
“Startups are going to be the backbone of new India. When India completes 100 years of independence, start-ups will have an important role. Country’s innovators are making the country proud globally,” Livemint quoted PM Modi.
“This decade is being called as ‘techade’ of India…to strengthen the innovation, entrepreneurship and startup ecosystem have important aspects like liberating entrepreneurship, innovation from govt processes, bureaucratic silos,” he added.
Startups are happy and celebrating PM Modi’s declaration and look forward to more support in the future. The Tech Panda asked around.
“It is a matter of pride for the startups to be recognised by the Prime Minister of the country as the backbone of new India,” says Karanvir Singh, Founder and CEO at Pariksha, an EdTech for government exams.
There is a dire need for a well networked EdTech infrastructure in the country. This must be considered in the upcoming budget session as well
“The COVID-19 outbreak created a lot of gaps in day to day functioning of the individuals, and many startups came forward to fill-in. Innovation was on an upswing, and a lot of sectors were disrupted by technology. The EdTech model topped the list as education took an online route, and traditional education institutes turned to technology, seeking transformational support. There is a dire need for a well networked EdTech infrastructure in the country. This must be considered in the upcoming budget session as well,” he added.
Chayan Mukhopadhyay, Co-founder and CEO of Qandle, says the announcement is an acknowledgement of startups trying to make an impact.
“Many industries got disrupted during COVID-19. The ones who survived showed a lot of resilience. The HR tech industry too underwent a sea change as many companies shifted to a work-from-home or a hybrid model and started managing a distributed workforce remotely.
I am confident that with the Government’s focus on startups and support for entrepreneurs, many more startups will grow and make India an entrepreneurship hub
“PM Modi’s announcement is an acknowledgement of every such startup trying to make a meaningful impact in their sector in some way. I am confident that with the Government’s focus on startups and support for entrepreneurs, many more startups will grow and make India an entrepreneurship hub.”
Ease of Doing Business & Solve Cash Flow Challenges
Pankit Desai, co-founder & CEO, Sequretek, a Mumbai based cybersecurity company, ease of doing business and cash flow challenges need focus.
“For startups the fundamental issue continues to be ease of doing business and helping ease cash flow challenges. Some of the specific areas where we could use some better support would be around employee stock options, especially around the taxation impact when the stocks vest (but not exercised) and provision for founders to receive ESOPs.
Some of the specific areas where we could use some better support would be around employee stock options, especially around the taxation impact when the stocks vest (but not exercised) and provision for founders to receive ESOPs
“There is no difference in the regulatory compliances like ROC, GST, IT, RBI whether you are a startup or a large company. The amount of paperwork that is needed to run the company remains the same. By default, for the period that you are a registered startup, one needs to be in a lower TDS bracket as the cash flow issues are quite severe.”
Relaxation of ESOPs Taxation Scheme & Reduction of Compliance Burden
Ajay Lakhotia, Founder, StockGro, said “Backed by several uplifting GoI initiatives, the Indian startup ecosystem has gained prominence as one of the world’s largest. I hope this trajectory will continue to grow on the back of some key reforms in Budget 2022.
“To begin with, relaxation of ESOPs taxation scheme and reduction of compliance burden on foreign investments in Indian startups will help make our businesses globally competitive and facilitate faster wealth creation across the spectrum.
To begin with, relaxation of ESOPs taxation scheme and reduction of compliance burden on foreign investments in Indian startups will help make our businesses globally competitive and facilitate faster wealth creation across the spectrum
“Moreover, Indian startups can unlock higher valuations if empowered to pursue foreign listing. At the consumer level, clearing the air on policies pertaining to new digital asset classes such as crypto and NFTs will go a long way in helping Indian investors invest stress-free. A lot more liquidity can also be unlocked among middle-class taxpayers through a reduction in the personal tax regime.”
Incubators & Knowledge Factories to Promote Startups
Vikas Malpani, Co-Founder & CEO, Leher App, an Indian drop-in live audio/video discussion social network app, said, “While there is a lot of buzz around building an infrastructure for startups in various fields, we need a lot of investment to counter the loss all markets experienced in the past two years. There is a need to build incubators and knowledge factories to promote startups, especially in the stock investment arena, since there is a rising interest but very few educational avenues.
We are hoping that the crippling effect of the pandemic will be taken into due consideration for small and medium scale enterprises and will offer not only financial relief but also measures to simplify capital acquisition and other means to ease business
“We are hoping that the crippling effect of the pandemic will be taken into due consideration for small and medium scale enterprises and will offer not only financial relief but also measures to simplify capital acquisition and other means to ease business.”
Read more: Budget 2022 expectations: What’s the industry wish list?
