New Delhi: In the much-awaited Union Budget, Finance Minister Arun Jaitley tried to do a balancing act between the imperatives of reducing the fiscal deficit and the need to increase public investment to kick-start investment cycle. Acknowledging the need to increase public investment in infrastructure, the Budget proposed to increase public investment is proposed in road and railways. Tax free infrastructure bonds in rail, roads and irrigation has also been proposed as has a national investment infrastructure fund.
While seeking to spark an investment-led boom, the budget was short on structural reforms, with the government leaving major welfare schemes untouched. However, the finance minister also announced several policies that might be seen as pro-poor, such as an expanded insurance net.
Here are some reactions from the startups over the Budget:
Raju Vanapala, Founder and CEO, LearnSocial.com
"This time, the Finance Minister has given special attention to the IT and ITes sector. The announcement of Rs 1000 crore for promotion of start-ups is a highly positive move. We feel that the new government has presented a progressive budget, which will help in creating an investor-friendly environment and attract more foreign and domestic investment in the IT sector. As we all know, a boom in the IT Industry with advanced technology leads to direct growth of the economy. Hence, the government has laid a special focus on this space. The new mechanism known as Self Employment and Talent Utilisation (SETU) will be a techno-financial incubation and facilitation programme to support all aspects of start-up business and other self employment activities particularly in technology-driven areas. This too will open more avenues in the sector and be a veritable shot in the arm."
Amit Bansal, CEO, HealpingDoc.com
The increased healthcare budget allocation is step in the right direction but the amount is still far too less to built an effective and credible public healthcare system in India. The good news is that healthcare has started to get the due attention.
The increase in tax exemption limit for health insurance will have significant impact on the penetration of health insurance in the country. This would help corporates to offer a wider range of health packages, and would go further to reduce out-of-pocket health spending.
Sanjoe Jose, CEO, Talview.com on 1000 cr fund allocation for startups for your perusal
“The budget allocation for startups should be used to promote startups in Tier 2 cities and beyond. This can lead to significant generation of quality employment at par with city counterparts for youngsters in these regions. Areas to be focused should be technology, commerce and education/training”.
Diwakar Chittora, CEO, Intellipaat.com
"It is good to see a big step from Modi government towards boosting startups. It indicates very clearly Indian government wants to build healthy environment for startups while is prevailing in US and Singapore.
If we are look at this allocation in details there is lack of clarity how these funds will be allocated, what is the duration for this will be available , what is the procedure to get the funds and what kind of startups are eligible and what is the slab of funding.
There are still some cases where government is doing this work but it's of no use for many. To give an example, we recently spoke to STPI Jaipur they run a program whose objective is to boost startups under name of Startup Oasis (http://www.startupoasis.in/) which is in joint venture by RIICO and we approached them for using their facility for our office. They said we are not startup as our company size is 20 people and they denied providing us their facility. They have a facility of siting capacity of atleast 30 – 40 people free from last 6-8 months but still they are not interested in giving them to us.
Big problem here is to address even though government allocates budget but there is no clarity how to utilize, who can utilize, who is the right authority to take decision and what is the definition of startup?"
Ashutosh Modi, Executive Director, EntrancePrime.com
A brilliant, well thought budget for all sections of society and businesses. Measures targeted on black money are very bold and long due. My top picks from the budget - electrification of 20,000 villages, digital India initiative to connect villages with technology, introduction of new IITs, IIMs and other premier institutes of higher learning, ensuring a senior secondary school within 5 KMs reach for every child, 1000 Crores budget for promoting technology startups, reduction of tax for royalty fees on technology services, initiatives like Nayi Manzil & Pradhanmantri Vidya Laxmi Scheme to promote education & skill development in India, Reduction of corporate tax by 5% over 4 years.
However, execution and enforcement plan for influx of larger funds in schemes like MNREGA will be interesting to read. As expected, increase in service tax to make way for GST will be hard of Indian pockets. We were expecting a reduction in ROI for Education loans, however, some of it is taken care of with Pradhanmatri Vidya Laxmi Scheme.
Looks like an immensely progressive budget on face value, as an Ed-Tech company we see some really good opportunities coming out of this budget, look forward to details and execution plan.
Ramut Sethi, Founder and chief mentor Career Co-
"FDI would be favorable for us as it will generate job opportunities and help people to find their career. But we are not happy with 14% tax on companies..And also, the amount allocated for startups is too less".
Abhinav Choudhary, Co-Founder, Smartprix.com
"Budget 2015-16 may prove to be A Game changer for tech startups in India. According to Economic Survey 2014-15 Indian Tech startup landscape to be in the mode of hyper-growth. In line with the growth, allocation of 2000cr for startups will definitely be seen as a positive sign from Govt.
FM announcement of reducing corporate tax from 30% to 25% in the next 4 years will increase the expenditure power on marketing and technology of Smartprix.com
– An online comparison shopping website and creation of more jobs in the technology sector is expected in the upcoming years. Reduction in the rate of income tax on royalty and fees for technical services from 25% to 10% is a welcome move".