Budget Reaction – Startup Sector – WoodenStreet, SpaceMantra, Rosemoore & More
Dinesh Pratap Singh, Co-Founder, WoodenStreet
With easing capital gain taxation and carry forward of losses on change of shareholding of start-ups from seven years of incorporation to ten years, the country could become home to many more startups in the coming year.
Another important announcement about setting up the Agriculture Accelerator Fund will encourage agri-startups by young entrepreneurs in rural areas. Moreover, bringing out the National Data Governance Policy will unleash innovation and research by start-ups and academia. The several supportive policies for startups in Budget 2023 by the Finance Minister will help to scale up the operations to a greater extent and create a boom for the startup ecosystem across the country.
Ridhima Kansal, Director, Rosemoore
The Union Budget this year has a slew of incentives towards the start-up ecosystem, which highlights GOI’s unwavering commitment towards building a powerful & prolific start-up ecosystem in the country. The total fund allocated for start-ups has been close to 1000 Crores. Out of this, 283 Crores have been allocated to the seed fund. This is a marked increase from the past budget when INR 100 Crores were allocated. GOI has also embarked on an agritech fund to further support, agritech start-ups in India. A new Data governance policy will also be unveiled which will give an institutional framework to use anonymous data. These are all laudable steps.
Delphin Varghese, Co-Founder & Chief Business Officer, Adcounty Media
In the Union Budget 2023-24, Finance Minister Nirmala Sitharaman Entrepreneurship acknowledged the importance of startups for the country’s economic development. In her Budget speech, she mentioned that India is now the third largest startup ecosystem globally, and our startups rank second in innovation quality among middle-income countries worldwide. In this budget, she proposed to extend the date of incorporation for income tax benefits to startups from 31.03.23 to 31.3.24. If all of the company’s owners continue to own the shares, the requirement of continuity of at least 51% shareholding is waived for qualifying start-ups for setting off carried forward losses. Mrs Sitharaman extended the time frame of this relaxation from the current seven years to losses sustained within ten years if the startup’s incorporation. She also announced an Agriculture accelerator fund that will be set up to encourage agri-startups by young entrepreneurs in the country.
Nidhi Aggarwal, Founder, Spacemantra
Until now, the tax break was only available to startups founded in March 2023. FM has extended the date of incorporation for new businesses to take advantage of income tax benefits until March 31, 2024. The finance minister also proposed extending the benefit of carry forward of startup losses on change of share holding to 10 years of incorporation from the current 7 years. This will boost the country’s emergency startup and help it achieve its five trillion dollar vision.
Dr. Deepak Jain, Founder, of The Fragrance People
The government has taken a number of steps to encourage the growth of startups in the country. The Startup India initiative implements the Fund of Funds for Startups (FFS) scheme, the Startup India Seed Fund Scheme (SISFS), and the Credit Guarantee Scheme for Startups (CGSS) to provide capital at various stages of a startup’s business cycle. The FM also proposed extending the benefit of carrying forward losses to startups for a period of ten years. The budget measure comes at a time when the startup sector is experiencing a funding winter, with investors only investing about $25 billion in Indian startups in 2022, a 40% decrease from the $42 billion raised across 1,500+ deals in 2021. FM’s move is notable for the growing entrepreneurial spirit in the country.
Sahil Arya, Co-Founder & Director, Fat Tiger
The government will release a National Data Governance Policy to encourage startup performance and to unleash startup innovation and research in their respective fields. This allows access to anonymized data. This action is intended to promote the Startup India initiative, which was launched in 2016 with the goal of creating a strong ecosystem for nurturing innovation and encouraging private investment in the startup ecosystem.