Here is what India's Startup CEOs feel about Budget 2017-18

Moneycontrol Bureau

Reeling under the impact of demonetisation, most India's startup CEOs have welcomed Budget 2017. No announcements on easier norms for exits and quarterly compliance remained a dampener. The Budget 2017-18 announced a push to cashless transactions and reduction in tax rate for SMEs with an annual turnover of less than Rs 50 crore. Here is what India's startup CEOs feel about Budget 2017-18.

Bipin Preet Singh, Founder & CEO, MobiKwik

Upgrading digital infrastructure to support cashless transactions in rural and semi urban areas will encourage more merchants and consumers to transact on non-cash and online platforms. However, we feel that the government must have also considered promoting startups in the digital payments and digital security areas. Secure digital transactions is the only way to sustain India's habit of cashless payments.

Reduction in the corporate tax for Medium and Small Scale Enterprises (MSMEs) to 25% will also go a long way in attracting more investment in the country. Overall the Budget proposals look to boost consumption.

Kunal Bahl, Co-founder & CEO, Snapdeal

We commend the focus on growing the digital footprint in the country —  enhancing digital infrastructure, capping cash transactions, reducing cash donations, using Aadhaar Pay to enable more digital payments are significant measures. Initiatives make an impact when there is continued attention and the announcement of today builds on the demonetization efforts of last few weeks. We also welcome the emphasis on skill development and technical education - this will enable India to successfully harness the demographic dividend.

Kenny Ye, GM-Overseas Business, Alibaba Mobile Business Group

Union Budget 2017-18 is a big relief for the common masses – from reduction in personal income tax to sops for affordable housing- the Finance Minister has announced various measures to benefit farmers and weaker sections of the society. On the corporate side, abolishing of FIPB is a bold step and further liberalization of FDI policy will cheer foreign investors.

While last year’s auctions removed spectrum scarcity in the country, expansion of Bharat Net project will ensure high-speed broadband to 1.5 lakh gram panchayats via Wifi. With increasing smartphone penetration and push for high-speed broadband connectivity in rural areas, a massive digital revolution is imminent in India. Lastly, reduction of corporate tax for MSMEs is a welcome step but larger Indian conglomerates looking to compete with global peers will continue to find the tax rate challenging.

Vijay Shekhar Sharma, Founder & CEO - Paytm

"It is a digital economy budget.Every person from a small shops to consumers are pushed towards the digital economy. Tax benefits, incentives to use digital payments and extending loans based on a digital footprint will create a larger merchant ecosystem for digital payments. Incentives for labour intensive sectors including housing, farming and dairy will help SMEs to create new jobs. Finally, the income tax rate changes will encourage more people to report their incomes and create a larger tax net for the country. Overall, it is a great budget that will encourage people to move to the formal economy and derive benefits."

Archit Gupta, CEO and Founder, ClearTax

The government has proposed to abolish FIPB. This is a significant move for startups eco-system. The government has proposed automatic FDI approval route. This is also a move towards ease of business - as obtaining FIPB approvals involved time and effort. This is an excellent move for removal of lengthy and time consuming approval processes. We are awaiting further details on this.

Radhika Aggarwal, Co founder, Shopclues.com

“FM have delivered on many of their promises on digitization, push towards formal economy, reduction of Black Money, land reforms, startups, infrastructure development, rural employment & women empowerment. Specifically, what stands out are Bharat Net funding of Rs 10K cr, SMES corporate tax rate cut from effectively 33% to 25%, the abolition of FIPB, increased participation of women in MNREGA etc. All these and more announcements, in my opinion, are steps in the right direction setting up smaller & medium business to participate more vigorously in the digital & formal economy."

Manu Agarwal, Founder and CEO, Naaptol

The Government has planned to take digitisation of transactions to the grass-root level and believe it is a good step towards a stronger economy. The convenience of digital payments will instigate the consumers to spend more and I believe it is positive sign for us.

Devendra Rane, CTO & Co-founder, Coverfox

"With this Budget, the Finance Minister has rolled out measures that will indirectly but effectively contribute towards a Digital India. Aadhar-enabled payment system (Aadhar Pay), Aadhaar based health cards for senior citizens, web-based platform for defense pensioners and schemes to promote BHIM app are all moving in that direction. A digitally involved India will be more open to cashless transactions, which is welcoming news for the FinTech ecosystem."

Saurabh Kochhar, CEO, Foodpanda India

Finance Minister, Arun Jaitley has crafted an effective and a balanced budget aimed at an all-inclusive growth. With increased focus on digitalization of economy and to regulate electronic payments, a payment regulatory board in RBI has been proposed in the budget 2017.  This move will definitely benefit the business of online players in the industry and will ensure smooth transition from a cash based economy to a cashless economy. The government has also announced a mission to be set up with a target of 2500 crores digital transactions for FY 2017-18 through UPI, USSD, Aadhar Pay, IMPS, and debit cards which is a boost to initiatives like Digital India.

Abhesh Verma, COO, nexGTv

I welcome the budget and appreciate the clear commitment shown by the Government towards fueling the growth of digital adaptation by focusing on underlying infrastructure. This is reflected in the availability of more spectrums and 10k crore worth of budget allocation for fiber optic laying beyond the already laid 1.5 lakh km. The availability of bandwidth will help Indians adapt to the digital lifestyle and thus, will help in the growth of the entire ecosystem. Additionally, the rebate in tax for people, especially the ones at the bottom of the pyramid will increase their in-hand disposable income a part which will also be spent on mobility, data, and entertainment, further working for the benefit of the OTT players.

Tiny gifts but no bombshells

Amit Bhor, Co-founder and CEO, Walnut

"The Budget announcements are a good news for fintech companies. By promoting BHIM, UPI, Aadhar and other digital payments, the Government has facilitated customer adoption of cashless payments for Indians, which would drive the growth of the fintech sector. Another interesting announcement is the setup of a separate payments regulatory board based on the Watal committee report. This will open up further opportunities for the payment ecosystem.’

Mayank Bhangadia, CEO and Cofounder Roposo

"The government's move to enable startups, incorporated after 31 March 2016, avail of a three-year tax holiday in their first seven years is quite commendable. We also welcome the new relaxations provided in terms of carrying forward the losses. However, the 5% corporate tax reduction is not relevant to most startups that have not yet begun generating as much revenue. Government should now start thinking about how to reduce startups' real cost in the early years. In my opinion, income tax slabs should be made completely flat. Tax rates should not increase with increasing income."

Sandeep Aggarwal, Founder, ShopClues and Droom

The government has mentioned everything right from reducing fiscal deficit gap to cleaner GDP growth, expansionary nature of monetary policies to reducing the tax for income bracket of Rs 5 lakh. Profit linked-deductions for start-ups getting reduced to 3 years out of 7 years is a big relief for the startup ecosystem. Until, last year government had given three year tax holiday and MAT (Minimum Alternative Tax) which was going to expire by 2019 and now has been extended to 7 years. However, there are a lot of things I was hoping 2017 Union Budget to touch upon for example policies to ensure that capital is easily accessible to entrepreneurs, repatriation of money coming to India, R&D credit, no capital gain for any kind of start-up sale or exit and to make foreign listing for any Indian company straightforward.

Ajith Mohan Karimpana, CEO and Founder, Furlenco

The government refrained from bringing in any pathbreaking changes on direct  taxes. Most of the proposals of personal and corporate tax have marginal impact for the tax payers. Specifically coming to the extension of tax break for startups to 7 years, this change was definitely required as there are very few startups that actually generate profits in first 5 years of their existence; reduction in corporate tax rate for entities with turnover less than Rs.50 Cr may not be of much use for new age startups that take 5-7 years and much larger turnover base to turn profitable. Overall on a scale of 10 we would rate the budget 6.5.

Pradeep Dadha, CEO and Founder of Netmeds.com

We welcome the move of Government for amending the drug rules to allow reasonable medicines reaching out to masses in a better way. The amendments in Drugs and Cosmetics Act will improve the way Pharma sectors is serving people in the country. Additionally, we welcome Governments' initiative of 'Aadhar based health record for seniors citizens of our country to provide them with healthcare facilities hassle free. Also, the decreased tax slab for the companies in MSME sector will benefit the entrepreneurs and the companies as now the focus will be more on the expansion of their services.

Samar Singla, CEO,Founder, Jugnoo

Contrary to few conjectures doing rounds in the market, Budget 2017 brought with it tiny individual gift packages but not many bombshells. However the overall good news is that the government is focusing on the country's fiscal discipline and management. Further, considering the decline in entry of new players in the startup world and sustainable growth of existing ones, the budget was expected to benefit this sector further, to help scale up and by offering exemptions from Income tax, which the budget has successfully delivered. Given the growth prospects, MAT exemption for startups could have been a plus point but the government chose to skip this one. Looking forward for the detailed annexures to the budget for deeper analysis.