Home to more than 61400 startups and 14,000 startups recognised alone in 2021 by the Department for Promotion of Industry and Internal Trade (DPIIT), India stands right next to US and China to become the world’s third-largest startup hub. As technology and internet access becomes available to the masses, more businesses and startups are birthing intending to disrupt conventional practices and make our lives simpler. The past two years of the pandemic have laid a rough patch for the homegrown businesses and startups, and to make these businesses afloat the government had announced a slew of measures to support them. The parliamentary standing committee’s announcement of the stimulus package to revive the startup industry fell inadequate as the measures adopted were more of loan offering that proved to be beneficial for the long term and did not contribute to improving the cash flow for immediate relief. The second covid wave has left the startup industry bleeding, therefore, the industry from the current budget is expecting startup-friendly policies, tax relaxations to enable spending on innovation and ease of doing business. Here is a list of expectations that the young Indian startups want from the union budget 2022.
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14,000 startups were recognised in 2021 by the Department for Promotion of Industry and Internal Trade (DPIIT).
Expectation of young entrepreneurs from the union budget 2022
Here are some of them
Alternative MDR or Reintroduce MDR: To democratise digital payment for the masses, the government has abolished MDR which is a fee for fintech and banks for using their platforms for the transaction. But, this is seeming a hard pill to swallow for entrepreneurs, since the abolishment is said to hurt the revenues of homegrown payment service providers. It either expects the union budget to reintroduce MDR or bring an alternative to it.
Easy and fast processes: Startup founders are expecting hassle-free loan disbursements, automation of tax and compliance, paperless approvals, and incentives to adopt digital banking practices.
Alleviate taxes: For startups and businesses in the manufacturing space, many businesses face weekly power shutdowns. With the price of diesel shooting cost of energy consumption is becoming expensive thereby, increasing the cost of manufacturing. The entrepreneurs are expecting the government to relook at the state level and central taxes.
Simplifying GST compliance: Startups want GST compliance to be hassle-free and more simplified which will enable more online sellers and small businesses to leverage the potential of e-commerce and contribute to India’s digital economy.
EV startups want tax reduction: As the government is increasingly emphasising electric vehicles and building green energy solutions. The EV startup founders are optimistic that the government will announce new initiatives to encourage local EV manufacturing, facilitate easy finance, and develop an innovative EV ecosystem. For consumers to smoothly adapt to EV, the startups want the GST of 5 percent applied on EV to be reduced to 2 percent.
The above are the expectations that India’s startup ecosystem is expecting from the union budget 2022. Simplifying the compliances and relaxation of taxes and reducing the tax slab etc, will create a conducive environment for doing business for startups.
