What can start ups expect from the upcoming budget?

Year 2016 had a kick start with the announcement of Startup India-Stand up India plan by Prime Minister Narendra Modi on January 16, 2016 at Vigyan Bhawan, New Delhi. The event winded up with buckets of boon to those who are a part of Startup Ecosystem. With the declaration of tax heavens, incubation programs, rationalization of service tax rules, and many other rollouts. Entrepreneurs are very hopeful of the upcoming 2016-17 budget unlike past years where there was no hand-holding from the government side.

The Government is expected to not let go off this wave of entrepreneurship waste. The announcement of INR 10,000 crore to promote startups across different verticles has raised hopes and equal questions as to what this fund shall constitute. Though fizzy, but significantly the funds shall be invested in the strengthening of Digital Infrastructure of the country. Incubation programs, development of Innovation parks, easy access capital, are the major need of the hour and it is expected that the budget will constitute significant norms to regulate these functions.

Apart from these, the upcoming budget shall lay down foundation for Tax breaks. It shall include exemption from Capital Gain Tax, and Tax holiday for a period of 3 years, which was promised by Prime Minister at the event. Additionally, tax exemptions on incubation, partnership with academia, investments, and seed funding regulations have been forecasted. 

The bucket list also includes easy entry and exit of Foreign Investors. RBI has allowed the foreign investors to sell their stakes to domestic companies. This will make an easier exit route for foreign venture capital funds. Simple registration and listing norms have made the thought of getting in to entrepreneurship easy. Fast track Patent assistance, better access to power and credit, and high bandwidth, and other promises to be turning in to reality, however shall stand true only when the fine print of the budget document is out. These reforms shall play a major role in India’s account for Global GDP by 2020, against 4% now.