The Tech Panda sought to know what MSMEs, startups, and VCs are thinking of the Union Budget 2023.
Finance Minister Nirmala Sitharaman has been kind to the startup ecosystem. The announcement of the extension of tax benefits on the incorporation of startups as well as the additional three years to carry forward the losses to set off against future profits has pleased the sector.
Also, the reduction of compliances will prove to be a boon for young startups. Another much welcomed item is more Centres of Excellence for the development of Artificial Intelligence to help make AI work for India.
Read more: Union Budget 2023 wish list: Startups
Neeraj Tyagi, Co-founder & CEO, We Founder Circle
“Post-pandemic a lot of startups were struggling for survival and still are. The announcement of the extension of tax benefits on the incorporation of startups, and additional 3 years to carry forward the losses to set off against future profits will serve as lifeboats to many.
More than 39,000 compliances have been reduced which will offer great convenience to startups and encourage aspiring ones
“Additionally, what is not realized yet is that ease of compliance plays a major role for any business. More so for new businesses and young entrepreneurs. More than 39,000 compliances have been reduced which will offer great convenience to startups and encourage aspiring ones. The Agri Accelerator Fund set up by the government will not only encourage entrepreneurs but also attract investors to invest in Agri startups aggressively. The good thing is that we have some of the most exciting agri startups like Hesa, Anveshan and Growit.”
Anil Joshi, Managing Partner, Unicorn India Ventures
“FM has also given special attention to MSME and startups. Announcements like easing KYC, making PAN as uniform identification for business will go a long way in setting up new businesses especially in the Fintech and Insuretech segment.
Announcements like easing KYC, making PAN as uniform identification for business will go a long way in setting up new businesses especially in the Fintech and Insuretech segment
“Increasing the tax relief period from 7 years to 10 years is a big announcement and will help startups redeploy earnings on growth of the business. Also tax rebate to MSME earning upto Rs 3 crore will also help companies to have ease of cash flow.”
Ravi Mittal, Founder & CEO, QuackQuack
“The Budget 2023-2024 comes bearing good news; it shows the economy to grow at 7% this year, which is the highest among all major economies, and we couldn’t be more optimistic. The focus on startups in this year’s budget is certainly encouraging. As a young company with 22 million users, we are hopeful that the announcement regarding Startups will only take us further ahead.
We understand that the Data Governance Policy will be brought out to unleash innovation and research and is expected to encourage startups, but it is still too early to say how and on what this will be implemented
“It is exciting to see that India will have more Centres of Excellence for the development of Artificial Intelligence to help make AI work for India. We understand that the Data Governance Policy will be brought out to unleash innovation and research and is expected to encourage startups, but it is still too early to say how and on what this will be implemented.”
Birma Ram, Founder, BabyG App
This budget is at best a baby step, what we need are leaps to unlock the potential
“The intent is good, but progress has been slow in making India’s startup ecosystem compete with advanced economies. This budget is at best a baby step, what we need are leaps to unlock the potential!”
Prateek Tosniwal, Co-founder, IVY Growth Associates
“The Union Budget for the fiscal year 2023-24 has redefined the landscape of capital investment in the country. Certainly, the new policies launched will revive the startup ecosystem in pan India. As per the finance minister, the revamped credit guarantee scheme will take effect from April 1, 2023, through the infusion of Rs 9,000 crore in the corpus. This will enable additional collateral-free credit of Rs 2 lakh crore to MSMEs.
It is a great budget for capital investors and investment networks and it will fortify the country’s financial investment ecosystem
“The mentioned policy will be a game-changer for small to medium-scale enterprises in the country. The economy is to grow at 7% in the current year. This is the highest among major economies. India is on the right track despite the time of challenges. Finance Minister Nirmala Sitharaman sticks to the advance estimate for current fiscal year growth of 7 %. Capex’s outlay increased by 33% to Rs 10 lakh crore for FY24. At this level, public capex will be 3.3% of GDP. Equity indices are in the green so far. The Centre’s capex target for 2023-24 is 33 % higher than the budget estimate of Rs 7.5 lakh crore for 2022-23. Overall, it is a great budget for capital investors and investment networks and it will fortify the country’s financial investment ecosystem.”
Vyom Shah, Founder & CEO, Foodism
“The Union Budget 2023 is set to bring a plethora of opportunities for young entrepreneurs. The Government brought in numerous measures such as tax cuts and exemptions that are aimed at helping small businesses grow and expand. These measures will help create more jobs, stimulate economic growth, and encourage innovation in the country.
The Government brought in numerous measures such as tax cuts and exemptions that are aimed at helping small businesses grow and expand
“There shall be more incentives for investors and venture capitalists who are willing to invest in startups. It is a major step towards providing a much-needed boost to SMEs and startups in the country.”
Ramesh Jhajharia, Co-founder & CEO, Tradexa
“The 2023-24 budget has laid clear emphasis on prioritizing economic growth with focus on capital spending to generate growth and employment. The announcement relating to MSMEs and thrust on digital banking will further go a long way in supporting the economy. It is good to see the government’s focus on facilitating the growth of the MSME sector in this year’s budget.
MSMEs to get 95% of forfeited amount for contract failure during Covid-19 which is a highly appreciative move. Another much-needed move by the government is the credit guarantee for MSMEs
“MSMEs to get 95% of forfeited amount for contract failure during Covid-19 which is a highly appreciative move. Another much-needed move by the government is the credit guarantee for MSMEs where the revamped scheme will take effect from April 1, 2023 with infusion of INR9,000 crore corpus. This will enable additional collateral-free credit of Rs 2 lakh crore to MSMEs. A much-required move for MSME’s recovering from the effects of the pandemic.”
Mahin Gupta, Founder, Liminal
“The budget announcements by the honourable Finance Minister have infused new energy into the startup ecosystem across the country. The tax holiday for startups has been extended to 10 years, which will provide much-needed liquidity to the startups in their growing phase; this is a master stroke by the government because as the economy opens up, we will see more startups coming up in the field of technology, digital payments, digital infrastructure and agri-tech which will create a strong foundation for the next decade of economic growth, innovation, and job creation.
The tax holiday for startups has been extended to 10 years, which will provide much-needed liquidity to the startups in their growing phase
“This is an amazing time to be a startup founder in India as the government is committed to fostering the growth of existing startups and simultaneously encouraging youngsters to join the startup revolution, which will not only add to the economic growth of the country but will make India a global hub for innovation in fin-tech space.
“We also appreciate the government’s move towards enhancing the ease of doing business. Compliances culminate in a major part in setting up businesses, especially in the fintech sector. We at Liminal lay a huge emphasis on creating a regulated and compliant ecosystem to ensure transparency, and the government’s announcement of reducing more than 39,000 compliances to provide is a welcoming move.”
Shivam Thakral, CEO, BuyUcoin
“The union budget 2023-24 is aimed at making India a startup capital of the world. The agriculture accelerator fund announced by the honorable finance minister will encourage a lot of bright entrepreneurs to jump on the agriculture technology startup bandwagon. We are delighted to see that the tax holiday for startups has been extended to 10 years as it will provide immediate comfort to the startups that are engrossed in innovation and need liquidity for product development.
The union budget 2023-24 is aimed at making India a startup capital of the world
“The relaxation of the tax exemption limit to 7 lacs will increase the surplus funds for the common man which will spark activity in various sectors like investments in digital assets, consumer goods, and tourism.”
Tarusha Mittal, COO & Co-founder, Dapps and UniFarm
“We are excited to see a special focus on startups in the Union Budget 2023-24. The creation of an agriculture accelerator fund is a bold move towards driving innovation and creating more jobs for the youth of our country.
The creation of an agriculture accelerator fund is a bold move towards driving innovation and creating more jobs for the youth of our country
“The startup space will get a big boost from the extension of the tax holiday as it is expected to increase the cash flow which is critical for the growth of any startup.”
Rajarshi Bhattacharyya, Co-founder, Chairman & Managing Director, ProcessIT Global
“The Union Budget 2023 is forward-thinking and has a positive tone. The budget is pro-MSMEs and startups, especially knowing India is home to the third largest startup companies in the world. It certainly provides further growth opportunities to these organizations, especially in the technology sector. The relief provided to the MSMEs and including them as part of the unified Skill India Digital Platform is encouraging.
The relief provided to the MSMEs and including them as part of the unified Skill India Digital Platform is encouraging
“The introduction of Entity DigiLocker providing online security to all organizations is a much-needed one, in these times of growing cybercrimes. The National Data Governance Policy will benefit start-ups in a big way.”
Ambarish Parekh, CEO, PayCraft
“This year’s Union Budget was more focused on offering the much-needed relaxation for MSMEs and startups, and it’s been a relief for employee with new tax benefits introduced. Credit guarantee for MSME, revamped scheme will take effect from April 1, 2023, with infusion of INR9,000 crore corpus. Cost of Credit to be reduced by 1%. Additionally, 95% of the forfeited amount will be returned to them by govt undertakings for contract failure during Covid and INR10,000 cr per year to be invested on Urban Infra Development fund.
This year’s Union Budget was more focused on offering the much-needed relaxation for MSMEs and startups
“Entrepreneurship is vital for a country’s economic development and India is now the third largest ecosystem for startups globally. The tax benefits on their incorporation is being extended by another year and the carry forward of losses to set off against future profits will now be allowed for 10 years instead of 7 years.”
George Alexander Muthoot, MD, Muthoot Finance
“During the pandemic MSMEs relied heavily on gold loans to meet their credit needs and the budget further has offered a big relief to MSMEs, which have been one of the most impacted sectors during the pandemic. In order to reduce the stress on the segment and increase the flow of funds, the Government revamped the ECLGS scheme via the infusion of Rs 9000 crores in the corpus. This will enable collateral for Rs 2 lakh crore loans to the small and medium-sized businesses.
The budget further has offered a big relief to MSMEs, which have been one of the most impacted sectors during the pandemic
“Further, 95% of the forfeited amount relating to bid or performance security will be returned to the MSMEs by the government and other undertakings. We also believe that the reforms announced with respect to the growth and development of the agricultural sector, animal husbandry and fisheries will further boost these sectors and support the economy. All these measures will positively enhance the scope of Gold-loan NBFCs like us, which are catering to the underbanked sectors of the society.”
Jyotirmoy Chakravorty, Founder & CEO, Ubona Technologies
“As MSMEs are now coming through the pandemic’s big blow, the revamped collateral-free credit guarantee scheme will definitely prove to be a big boost for MSMEs. This would spur a great growth of MSME through the financial year 2023-24. In fact collateral free credit enables not only a guaranteed loan but also this removes a great deal of hassles in the process of availing the loan. This is a laudable move by the union government as it not only boosts the growth of MSMEs but also creates a huge number of jobs for youths across the country.
As MSMEs are now coming through the pandemic’s big blow, the revamped collateral-free credit guarantee scheme will definitely prove to be a big boost for MSMEs
“Also, it is a great initiative for the government to establish centres of excellence for Artificial Intelligence. This would give a huge push for automation space as this initiative would create a huge skilled talent pool.”
Arpit Jain, Founder & CEO, GreedyGame
“We are glad that the budget has given some relaxation for MSMEs and enterprises. The finance minister has laid focus on technology, healthcare and education in her budget which is encouraging for the development of the country in the long run.
The government has asserted the importance of entrepreneurship for the economic development of the country
“The government has extended support measures for startups which are incorporated till March 31, 2024. Tax benefits were available for startups incorporated until March 2023, up till now. We think this is a welcome step and the government has asserted the importance of entrepreneurship for the economic development of the country.”
Mainak Sarkar, Co-founder & CEO, Explorex
“The introduction of the National Data Governance Policy to unleash innovation by startups in the country will prove beneficial to many new age startups. Further, the government digital certificate depository Digilocker services for the MSMEs and fintech sector will hasten the germination of more innovative fintech services and further allow fintech solutions in India to function smoothly using India’s digital public infrastructure, including Aadhaar, PM Jandhan Yojna, video KYC, India Stack, and UPI.
The introduction of the National Data Governance Policy to unleash innovation by startups in the country will prove beneficial to many new age startups
“The budget will prove to be of immense help with regard to the startup ecosystem through the proposal of the extension of the date of incorporation for income tax benefits from 31st March, 2023 to 31st March, 2024.”
Jeevika Tyagi, Co-Founder & CEO, Aastey Designs
“The startup ecosystem has been a growth driver for India’s GDP for the past couple of years. The government has been promoting the launch of new startups as it is the key to becoming an Aatmanirbhar India. As a result, India is now the third largest ecosystem for startups globally, and ranks second in innovation quality among middle-income countries, according to Finance Minister Nirmala Sitharaman.
The extension of date of incorporation for registered startups to avail income tax benefits will prove to be quite beneficial to the startups initiated for launch during 2023-2024
“Although, with advancing years, the prices of clothes are on the rise yet the extension of date of incorporation for registered startups to avail income tax benefits will prove to be quite beneficial to the startups initiated for launch during 2023-2024. It will allow the new startups to appeal for a tax holiday and will ultimately lead to long-term financial gain. We are thrilled to see the determination and efforts of the government to help lead the growth for startups in every way possible.”
Viren D’Silva, Co-founder, Good Flippin’ Burgers
We were hoping the government would also increase the total turnover by Rs 50 cr from the earlier 25 cr. This would have been a booster dose for startups who were incorporated after 2017 and faced the tough time
“It’s very good news for startups that Government has extended the tax holidays by one year, i.e, till March 2024. We were hoping the government would also increase the total turnover by Rs 50 cr from the earlier 25 cr. This would have been a booster dose for startups who were incorporated after 2017 and faced the tough time.”
Mayank Arya, Co-founder, Yes Madam
“Startups in India demand ease of doing business, and the Hon’ble FM has taken the same into consideration by reducing more than 39,000 compliances and decriminalizing 3,400 legal provisions. This will not only provide relief to the existing entrepreneurs but will also encourage the aspiring ones.
Startups in India demand ease of doing business, and the Hon’ble FM has taken the same into consideration by reducing more than 39,000 compliances and decriminalizing 3,400 legal provisions
“Additionally, the persisting skill gap in youth is something that is faced in every organization. This implicates a direct impact on the overall employment rate in the country. Therefore, the proposals such as Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 4.0 and setting up of 30 Skill India international centres announced in the budget are more relevant now than ever.”
Gokul Tandon, Group Executive Chairman, Cloudconnect Communications
“At the center of the Union Budget, 2023-24 is providing measures to improve the business process for MSMEs. The budget announces an overhaul of the loan guarantee plan for MSMEs, which will go into effect on April 1st, 2023 by injecting Rs 9,000 crore in the corpus. This comes as a boon to the industry as it experienced an economic slowdown last year.
The extension of the carry forward of losses on changes in shareholding of startups to 10 years after incorporation from 7 years will help the sector cap on losses and create more fungible profits
“So the extension of the carry forward of losses on changes in shareholding of startups to 10 years after incorporation from 7 years will help the sector cap on losses and create more fungible profits. Additionally, under the Startup India initiative, Fund of Funds for Startups (FFS) scheme, Startup India Seed Fund Scheme (SISFS) and Credit Guarantee Scheme for Startups (CGSS), the aim is to provide capital at various stages of the business cycle of a startup. We see this as a progressive measure to build a healthy startup environment in the country.”
Sanjay Chatrath, Managing Partner, Incuspaze
“India delivered a pro-growth budget today with a significant push to capital expenditure to boost the MSME sector in India. Tax revisions announced in the budget are most welcome. The INR 9000 Cr credit guarantee scheme will assist MSMEs in taking tax benefits on expenses incurred to receive their payments. The government has had its ears to the ground and covered a vast gamut of businesses as it reduced the cost of credit to 1%.
The newly established infrastructure finance secretariat will assist all stakeholders with more private investment
“The newly established infrastructure finance secretariat will assist all stakeholders with more private investment. Investments in Infrastructure will have an enormous multiplier impact on growth and employment. After the subdued period of the pandemic, private investments are growing again. While the affordable housing sector was addressed in the budget, we would have liked to see a similar focus on commercial infrastructure as well, given the industry’s setback during the pandemic.”
Gaurav VK Singhvi, Co-founder, We Founder Circle
“For any startup to grow smoothly, easier compliance plays a major role. A lot of decisions of the entrepreneurs and investors depend on the same. In this budget, more than 39,000 compliances have been reduced and more than 3,400 legal provisions have been decriminalized, indicating that even the government sees the startup ecosystem contributing greatly to the future of India.
In this budget, more than 39,000 compliances have been reduced and more than 3,400 legal provisions have been decriminalized, indicating that even the government sees the startup ecosystem contributing greatly to the future of India
“Simultaneously, investors have remained enticed by the agriculture sector in India, and always encourage any innovation that offers support to the largest industry. The announcement of the Agri Accelerator Fund by the government will not only encourage entrepreneurs but also strengthen the agri supply chain which has been struggling for way too long. We have been bullish and investing in Agri startups and have 3 companies in our portfolio, I believe this initiative by the government will see a boost across the entire value chain in the agriculture industry and we definitely see a lot of startups emerging and potentially becoming unicorns from the Agri startup community.
“Carrying forward Digital India, and the now renowned IndiaStack or BharatStack of digital solutions for financial inclusion, compliances, governance, and public services, the Honorable FM has announced the launch of various other digital programs such as a digital platform for agriculture, Digital National Library, AI Center for Excellence, extension of eCourts, Unified Skill India Digital Platform, Tourism App, Central Financial Data Repository, Unified Filling Platform, thrust on BharatStack viz. Digilocker, Video KYC, etc. This is commendable and takes India higher in the tech sphere. Especially, the unified filling platform, if done properly, can simplify the multiple compliances that companies have to currently do for various regulations through a common digital filling of data/forms.”
Harini Ramachandran, Co-creator of Excellence Installations Technology & Co-founder, Antano & Harini
“The Union Budget 2023 is positively addressing the rural & economic weaker sections and also the aspirational businesses of India. Furthermore, empowering women entrepreneurs, especially through skill development and through investments in branding & marketing is a favorable move, meant to promote niche and driven businesses in India.
My hope after this year’s budget announcement is that the people will leverage the increased tax exemption and ease of compliance to invest in themselves, in building superior capabilities of world leaders that will enable them, furthermore, to create a big impact in the world
“As the government continues to invest on mental health and skill development, I believe it’s also time that we prioritize Capability Building for India’s burgeoning entrepreneurs and workforce. Capabilities like to be able to model and learn from the geniuses around, to disassociate and bring creative, out-of-the-box ideas, capabilities of emotional resilience and mastery. Because capabilities are for life and naturally grows and evolves the current capacity an individual has to accelerate their success, launch a unique legacy, and create big impact in the world. My hope after this year’s budget announcement is that the people will leverage the increased tax exemption and ease of compliance to invest in themselves, in building superior capabilities of world leaders that will enable them, furthermore, to create a big impact in the world.”
Pankaj Makkar, MD, Bertelsmann India Investments
“At a macro level, seeing the FM acknowledge the significant role startups play in the economy was very heartening. Overall, the budget was well intentioned to help Indian startups operate and grow. Initiatives around digital infrastructure for agriculture, the national data governance policy and digital skilling are exciting areas for start-ups to track. We believe the implementation of these policy initiatives will be done inclusively and in-consultation with the startup and investor community, leading to several game changers in this space.
One area that startups will now need to keep in mind is the introduction of angel taxation for investments by non-resident investors
“One area that startups will now need to keep in mind is the introduction of angel taxation for investments by non-resident investors. While the intent is appreciated, the rules as prescribed could unintentionally impact genuine cases such as convertible rounds. On wish lists including easing ESOP taxation, rationalizing capital gains tax rates for unlisted shares etc., there remains optimism that these areas will be dealt with in due course as tax rules continue to evolve. Overall, it is very encouraging that this budget reverberates with positive signals for the Indian economy at large.”
Arunabh Sinha, Founder, UClean
“The budget has focussed on the startup and MSME sector. The budget has come out with high hopes for startups meeting their expectations for favorable government policies, access to funding and resources, and a supportive ecosystem for innovation and growth. Additionally, announcements in the budget with regards to the MSME sector will offer a conducive business environment with stable economic policies and a skilled workforce to help drive innovation and growth. Some of the key announcements in the budget i.e. access to credit and various tax benefits will impetus the growth of this sector.
With PAN becoming the single identifier, the amount of complex paperwork required at state and central level would be redundant and startups/investors alike will be able to focus more on execution rather than waste precious time on compliances
“FM Sitharaman highlighted a number of initiatives to support the startup ecosystem in India. Fund of Funds for Startups (FFS) scheme, Startup India Seed Fund Scheme (SISFS), and Credit Guarantee Scheme for Startups (CGSS) are launched as a part of the Startup India initiative to offer funding at different phases of a startup’s business cycle. The carry forward of losses to set off against future profits for 10 years (against the previous 7) is going to be a big boost for startups who are planning for future IPOs and other activities. Reduction of 39,000+ compliances would only promote ease of doing business which will encourage more youngsters to take the startup route.
“With PAN becoming the single identifier, the amount of complex paperwork required at state and central level would be redundant and startups/investors alike will be able to focus more on execution rather than waste precious time on compliances. The Startup India Seed Fund Scheme received an allocation from the government of Rs 283.5 crore, which was more than the budget’s prior Revised Estimates of roughly Rs 100 crore. The Fund of Funds for Startups received a budget allocation of Rs 1,000 crore.”
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