Budget 2022: Setting the stage for women entrepreneurs

Union Budget 2022 was, perhaps, awaited more keenly than in previous years for several significant reasons. On February 1, Finance Minister Nirmala Sitharaman started her speech with development, enhancement, opportunities, transition, change, and Gati Shakti. 

The National Skill Qualification Framework, which provides support for the job market and enhances skill-building and upskilling, was another important component of the budget.

In fact, productivity enhancement, sunrise opportunities, energy transition, and climate change were some other areas addressed to ensure India’s growing role in the world economy – positioning itself as a global leader.

Budget 2022 comes at an interesting time when the economy is slowly starting to recover and after seeing a decline in the number of women in business. The government's efforts and schemes have helped this number rise perceptibly.

However, there were a few SOPs expected from the Union Budget to support and encourage women entrepreneurs that were not addressed:

Boosting small businesses and the startup ecosystem

For the Indian startup ecosystem, the finance minister announced the extension of the tax holiday up to March 2023. The government also increased ECLGS (Emergency Credit Line Guarantee Scheme) from Rs 50,000 crore to Rs 5 lakh crore, which will help millions of MSMEs impacted by COVID-19 receive additional support.

The interconnectivity of MSME platforms — Udyam, e-Shram, NCS, and Aseem portals — will improve entrepreneurial opportunities and facilitate operability for small and medium businesses.

The budget also extended the capital gains tax exemption on startup investments, encouraging more investment in startups and paving the way for more unicorns in the country. 

By introducing a dedicated fund for the agritech sector, the government will not only regulate but also infuse capital into a much-needed sector of the economy. It is believed to be a move in the right direction. 

The government's efforts and schemes have helped the number of women in business rise noticeably. The budget also aims to convert two lakh Anganwadis into Saksham Anganwadis and launch programmes like Mission Shakti, Mission Vatsala, and Poshan 2.0 to empower and enable women even further.

However, with the emphasis on Nari Shakti, it looks like a missed opportunity on supporting diversity and inclusion.

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What’s falling short?

With more women becoming a part of the workforce and taking up entrepreneurship, companies, MSMEs, and startups require working capital, technology upgradation, and incentives to add more women to the workforce. 

When it comes to extending support to women entrepreneurs in the country, the Union Budget addressed very little, given the hardship faced by women-owned businesses (close to 20 percent).

The provisions of extra tax benefits, subsidies, and interest-free loans would have been a major boost for the entrepreneurial spirit among women-led startups. 

Although startups have contributed a great deal of energy and capital, the path to preferential procurement has not been clearly defined yet. Considering the incredible value startups have created in the past year, with more than 80 unicorns in the country, Budget 2022 could have offered additional support for startups during their acceleration phase.  

It is evident from our experience, including the pandemic, that women entrepreneurs are extremely resilient and would demonstrate their grit, determination, and might on a global stage.

We appreciate the government's conscious efforts to promote entrepreneurship through a range of programmes. However, we hope to see more proactive government support, such as subsidies, GST concessions for women-run businesses, and easier access to capital.

SMEs and Indian entrepreneurs have great potential, and hence, the goal should be to create an equal playing field for women entrepreneurs.