The Union budget is being termed as a big boost to the start up ecosystem in India. Various representatives from different startups feel that steps such as setting up an agriculture accelerator fund along with many tax easing efforts and new digital and green initiatives will help in the flourishing of the Indian startup ecosystem.
“With easing capital gain taxation and carry forward of losses on change of shareholding of startups from seven years of incorporation to ten years, the country could become home to many more startups in the coming year. Another important announcement about setting up the Agriculture Accelerator Fund will encourage agri-startups by young entrepreneurs in rural areas. Moreover, bringing out the National Data Governance Policy will unleash innovation and research by startups and academia. The several supportive policies for startups in Budget 2023 by the finance minister will help to scale up the operations to a greater extent,” remarked Dinesh Pratap Singh, Co-Founder, WoodenStreet.
A few other representatives of the startups feel that the budget reiterated the commitment of the government towards building a powerful and prolific startup ecosystem in the country. “The total fund allocated for startups has been close to Rs 1,000 crores. Out of this, Rs 283 crores have been allocated to the seed fund. This is a marked increase from the past budget, when Rs 100 crores were allocated. The government has also embarked on an agritech fund to further support the agritech startups in India. A new data governance policy will also be unveiled which will give an institutional framework to use anonymous data,” said Ridhima Kansal, Director, Rosemoore.
The Startup India initiative implements the Fund of Funds for Startups (FFS) scheme, the Startup India Seed Fund Scheme (SISFS), and the Credit Guarantee Scheme for Startups (CGSS) to provide capital at various stages of a startup's business cycle. “The FM also proposed extending the benefit of carrying forward losses to startups for a period of ten years. The budget measure comes at a time when the startup sector is experiencing a funding winter, with investors only investing about $25 billion in Indian startups in 2022, a 40 per cent decrease from the $42 billion raised across 1,500 plus deals in 2021. The FM's move is notable for the growing entrepreneurial spirit in the country,” observed Deepak Jain, Founder, The Fragrance People.
Experts feel that the biggest highlight of the budget has been the strong focus on going green and sustainable, which augurs well for the planet, the country and the startup ecosystem. They say that there has been a renewed progress over the last 12 months in investing in climate startups, and this trend has been kept alive with focus of the budget on green growth.
“The broad horizontal direction across green fuel, green energy, green farming, green mobility, green buildings, and green equipment is unprecedented if executed well. The schemes announced align well with the net zero target by 2070. With this positive direction we should expect more startups and increased venture capital funding in green startups,” pointed out Vinod Shankar, Co-founder and Partner, Java Capital.
He added that the encouraging behavioural change for carbon footprint reduction is a new paradigm for the people. “This has the potential to change individual and societal behaviour with the Green credit programme, PM-PRANAM and MISHTI,” said Shankar.
