Startups hope for growth in Budget 2024; Tech industry’s Budget asks
The Union Budget will determine the outlook for the startup ecosystem in the Modi 3.0 government. The tech industry hopes the forthcoming Union Budget will simplify rules on the taxation front to ensure ease of business and give a thrust to advanced technologies such as AI.
Hello,
Budgets are a tough balancing act.
The expectations of the Indian startup ecosystem are high as Finance Minister Nirmala Sitharaman is set to present her seventh consecutive Union Budget today—and the first of the Modi 3.0 government.
While startups are looking forward to the launch of new schemes to boost domestic investments, many want the Budget to address other issues like corporate tax, Section 68 of the Income Tax Act, and redomicile taxation regimes.
EV makers are eyeing manufacturing and sales subsidies as well as the third iteration of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme to boost EV adoption. Other emerging sectors like the drone industry have pinned their hopes on the government scaling market opportunities.
Meanwhile, the edtech sector, dealing with funding challenges and the aftermath of BYJU’S’ fall, is hoping for a reduced tax rate on online learning. So do gaming startups, along with more policies to encourage domestic gaming hardware and game production development.
AI is the talk of the town, and many industry experts suggest that more needs to be done beyond the India AI Mission to leverage the new technology.
However, the advent of AI has cast a "huge pall of uncertainty" concerning its impact on workers across all skill levels, the Economic Survey 2023-24 tabled in the Parliament on Monday noted.
It also pegged the GDP growth for the current fiscal year at 6.5-7%, cautioning the dearth of private capital. The survey also highlighted the need to create 78.5 lakh jobs annually in the non-farm sector—much of which would be generated by the renewable energy sector which is expected to attract Rs 30 lakh crore worth of investments by 2030.
Keep an eye on YourStory’s live coverage of the Union Budget here.
In today’s newsletter, we will talk about
- VC and PE’s Budget wishlist
- Tech industry’s Budget asks
- Upcycling plastic waste
Here’s your trivia for today: Which finance minister presented the highest number of Union Budgets in independent India?
Union Budget
VC and PE’s Budget wishlist
The Union Budget will determine the outlook for the startup ecosystem in the Modi 3.0 government.
This year, simplifying taxation, relaxing the norms around identifying what constitutes a startup, and unlocking domestic capital for startups top the list of asks from the venture capital (VC) and private equity (PE) ecosystem in India.
Sector expectations:
- Indian universities should also be allowed to invest as trusts in startups beyond the incubator model, similar to the endowment funds of the US, to open other sources of investments, recommends Padmaja Ruparel, Co-founder of Indian Angel Network.
- A longstanding ask from the ecosystem has been the parity of Long-Term Capital Gains and Short-Term Capital Gains taxes for listed securities and startups, which will aid talent retention at startups by doing away with dual taxation of stocks granted under ESOPs.
- Earlier this month, the DPIIT under the Ministry of Commerce proposed the removal of ‘Angel Tax’ in a submission made to the finance minister.
Pre Budget expectations from the PE and VC industry
Funding Alert
Startup:
Amount: Rs 123.56 Cr
Round: Series A CCPS
Startup:
Amount: $8M
Round: Seed
Startup:
Amount: $1.5M
Round: Seed
Union Budget
Tech industry’s Budget asks
The $250-billion technology industry in India primarily consists of IT services companies and business process management firms, along with R&D-focused organisations.
The industry hopes the forthcoming Union Budget will simplify rules on the taxation front to ensure ease of business and give a thrust to advanced technologies such as AI.
Tax simplification:
- India’s tech industry body NASSCOM recommends improving the tax competitiveness of the transfer pricing regime to boost India’s IT services exports and improve the ease of doing business for global capability centres (GCCs).
- The sector hopes the Union Budget will come out with measures that would encourage further investments in game-changing technologies such as AI and Gen AI.
- It is also crucial to encourage and incentivise both private and public enterprises to invest more in cybersecurity technologies, views Rajarshi Bhattacharyya, Co-founder, ProcessIT Global.
Women Entrepreneurs
Upcycling plastic waste
From making inroads in the clean energy sector with biogas production in villages, Akansha Singh is now expanding her efforts to promote environmental preservation and upcycle single-use plastic through her venture, Swayambhu Innovative Solutions.
Solutions to single-use plastic:
- Swayambhu has formed a group of ragpickers in Haridwar, Rishikesh and Delhi, and appointed an aggregator to collect mostly single-use plastic, such as the kind used to package milk and vegetables.
- The plastic is cleaned and sorted at Material Facilities Centres and processed into durable plastic sheets to manufacture various products, from benches to dustbins.
- Swayambhu provides employment to more than 100 ragpickers and employs 25 people at its factory in Haridwar.
News & updates
- Quick fix: Microsoft has released a free tool to help people recover from the faulty CrowdStrike update that led to one of the biggest IT disasters to date. The tool is designed to enable IT admins to recover from the 'blue screen of death' boot loop that has left 8.5 million Windows machines out of action.
- Basic income: After three years of distributing $1,000 monthly to beneficiaries in Illinois and Texas, OpenResearch, a project backed by Sam Altman, found that recipients spend more to meet their basic needs and assist others, and don't drop out of the workforce—although they work slightly fewer hours.
- Closer look: The Competition Commission of India has reportedly sent nearly 100 queries to Reliance Industries and Walt Disney regarding their $8.5 billion merger of Indian media assets. The questions also include queries related to the details of sports rights, which increases the scrutiny of the deal.
Which finance minister presented the highest number of Union Budgets in independent India?
Answer: Morarji Desai. He presented 10 Budgets, including an Interim Budget.
We would love to hear from you! To let us know what you liked and disliked about our newsletter, please mail [email protected].
If you don’t already get this newsletter in your inbox, sign up here. For past editions of the YourStory Buzz, you can check our Daily Capsule page here.
