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What to expect for startups in the upcoming Budget, check details

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Budget 2023 is just round the corner and it is expected to be extremely ambitious.

Keeping in mind the Government’s Make in India mission, various startup companies have started their operations for which tax exemption under section 80 IAC is also being provided under the Income  Tax Act wherein 100% tax exemption is being given to the startup basis the eligibility. To take this into account they are expecting more tax benefits, exemptions and procedural ease in operations for registration and smooth functioning of their business.

Augmentation in the purview of benefits specific to startups

The eligibility criteria for availing the benefits of the schemes especially for startups are expected to be relaxed so that more of them can avail the benefits of schemes like Startup India Seed Fund Scheme and Startup India Initiative.

Apart from the above schemes, the budget allocation is expected to increase for government guarantee schemes like (Credit Guarantee Trust Fund For Micro & Small Enterprises), CGTMSE, Pradhan Mantri Mudra Yojana (PMMY) and Stand Up India.

Coming to the Pradhan Mantri Mudra Yojana, the amount available for business activities under the three categories under which loans are provided in PMMY i.e. ‘Shishu’, ‘Kishor’ and ‘Tarun’ is expected to be increased.

In view of the coming slowdown as per the reports of various international agencies and research firms including IMF, the major task for the Finance Minister will be to control inflation as well as increase funds and flow to startups so that in future Make in India and digital India’s mission is achieved by the nation.

Job expectancy considering the setting up of new and growth of existing start-ups

Activation of new startups and increase in operational levels of existing ones will be one of the key factors for estimating job creation in 2023

Earlier the job market was all about layoffs in 2022, adjusted to return to office after the COVID-19 pandemic, increased pressure due to inflation and recession fears. The same threat of retrenchment in the sense that large multinational companies and foreign companies are laying off employees will continue to be a challenge for the government.

Views of the foreign venture capitalists and investors

To achieve the goal of investment, increase in cash flow and employment of talented individuals, nations like the US and the UK are looking forward to favorable policies for entry and investment in startups which would act as a bridge for making the nation a 500 Trillion Dollar economy.

According to a top investor US venture capital firms investing in India are expecting the Union Budget 2023 to support the growth and development of the startup ecosystem in the country. According to Arun Kumar, Managing Partner, Celesta Capital, venture capitalists want to cash in on Indian talent and invest in them.

“As a US-based venture capital firm investing in India, we are deeply interested in policies and initiatives that will support the growth and development of the startup ecosystem in the country,” Kumar said. “Indications and allocations in the budget that will spur the development of new enterprises based on innovation and entrepreneurship are particularly welcome,” Kumar said.

“We look forward to seeing in the Budget the Government’s continued commitment to promoting a business-friendly environment that encourages foreign investment and supports the development of new and emerging companies, including those in the deep-tech space “

“Such an aspiration will demand policies that make both imports and exports easier and cost-effective to enhance the efficiency of supply chains, enhancing the competitiveness of Indian manufacturing,” Kumar said.

CA Mohd Hasnain Khan — Financial Advisor

ALSO READ: Budget 2023: Expert explains Income Tax expectations of salaried taxpayers

Aaradhya is working as a Sub-Editor at The Vocal News. She enjoys writing about gadgets and automobiles because she is a tech and automotive fanatic. She has done her bachelors in Journalism and Mass communication from Makhanlal Chaturvedi Rashtriya Patrakarita Vishwavidyalaya. "I write to discover what I know."

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