The Indian Finance Minister Arun Jaitley did not address the concerns of India’s startup sector in Budget 2018 including crowdfunding of ventures and removal of angel tax. However, e-commerce startups say that the move to increase outlays for agriculture sector and reduction in tax for SMEs will boost job creation which in turn may benefit them in the long term.
"Core infrastructure investment is the foundation of a good economy - roads, healthcare, education, railways etc. We are glad this has been a focus area for the government, but more can be done here. Secondly, regulatory ease is critical to grow the economy - demonetisation, GST, bankruptcy laws, a target of INR 80k Cr. In the budget for disinvestment, and more focus on ease of doing business, means a plethora of MSMEs will come into the formal sector,” says Abhiraj Bhal, co-founder, UrbanClap.
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The finance minister in his speech said that he will take additional measures to strengthen the environment for the growth of Venture Capital Funds and successful operation of alternative investment funds in India. However, he did not elaborate on it further. It is expected that the government.
“The Union Budget 2018 is both populist as well as pragmatic. It focuses on growing the promising rural economy and extending digitalization to rural citizens which can yield great results in the form of increased household rural consumption, and thereby providing internet driven businesses with a great potential market opportunity to tap,” said Mitesh Shah, Head of Finance, BookMyShow.
The government has extended the benefit of the reduced rate of 25% corporate tax to companies who have reported a turnover of up to Rs 250 crore in the financial year 2016-17. This is expected to benefit almost 99% of companies filing their tax returns in India, the finance minister said.
“The allocation of Rs 3 lakh crore for lending under Mudra will definitely boost the sector financially and help the MSME’s grow their businesses more efficiently. Further, reduction of the corporate tax to 25% for small companies will bring relief. The government has also proposed revamping the system of sanctioning of loans to SMEs by linking it with GSTN. This will immensely help MSMEs with better management of working capital,” said R. Narayan, CEO Power2SME.
"With a focus on technology, the Finance Minister has provided great support to the digital industry. The government's decision to create 5 lakh WiFi hotspots in rural India will enable broadband access to those with no or little access to the realm of the internet. This will help grow the digital commerce industry," said Sanjay Sethi, Co-Founder & CEO, ShopClues.
Mr Jaitley has also doubled the allocation on Digital India programme to Rs 3,073 crore in 2018-19. Under this, the Department of Science & Technology will launch a Mission on Cyber Physical Systems to support establishment of centres of excellence.
"We commend the focus on growing the digital footprint, providing better physical infrastructure, and improving not just the ease of doing business but also ease of living in the country. The enhancement of digital infrastructure with more broadband access in rural parts, unique ID to companies, record allocation to building national highways and railways, and multi-fold increase in airports will go a long way in broad-basing growth in the economy,” said Kunal Bahl, Co-founder & CEO, Snapdeal.
However the issue of cryptocurrency remained a dampener and a few exchanges were seen clarifying their stance.
"The government has said that they want to eliminate use of crypto assets in illegitimate financial activities and we align with the government on their point of view. The statement essentially leans more towards the need for having robust regulations,” clarified Rahul Raj, Co-Founder, Koinex, a cryptocurrency exchange.
“The global market continues to thrive for the crypto enthusiasts, and while the talk of the town has been cryptocurrency, the bigger innovation is blockchain technology. India is poised to catapult on this technology and we at Koinex aim to make India the hotbed for blockchain technology,” he said.
The Government reiterated its stance on Thursday saying that it does not consider crypto-currencies legal tender or coin and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system.
“The Government will explore use of block chain technology proactively for ushering in digital economy,” said Indian Finance Minister Arun Jaitley.
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