While a many startups are cheering on the union budget announced by Finance Minister Arun Jaitley for the year 2016-2017. A few startup beg to differ from them, as they feel a bit disappointed from ‘StartupIndia’ government in this union budget 2016-17. Read more to find what startups has to suggest:
Disappointments on indirect taxation
“The B2C Housing Construction is the second largest employment generator in the country after agriculture, and contributes 8% to the GDP. The $150 bn sector remains marred with issues of supply chain leakages, wastages, shortage of skilled and semi-skilled workforce, tax evasion etc. Surprisingly, despite these ‘opportunities’, it is the most neglected sector in terms of emerging entrepreneurs trying to solve these problems for the manufacturers and consumers. The Union Budget met several expectations in terms of making housing more affordable to a vast segment by Exemptions on housing loan interest for first time home buyers, exemption from service tax on construction of affordable houses up to 60 square meters, and exemption in excise duty to Ready Mix Concrete. The enhanced investment in infrastructure will help us in reaching to wider consumer base in housing which is unserviceable today. We are happy that the FM went took a step further in the direction shown at startupindia and announced Tax holiday for startups for setting up the business. There were some disappointments as well, particularly of indirect taxation. Our sector has to grapple with various taxes like VAT/WCT, CST, excise, and service taxes. A uniform approach for tax laws and regulatory policies would have helped. GST implementation should be taken up in a time bound manner,” said Vineet Singh, Co-founder & CEO of Buildzar.
Lacks simplicity quotient
“There are all the right key words, in the Finance Minister’s 9 Point agenda in this budget. Governance and Ease of Doing Business, Education and Skills, Infrastructure, Financial Sector and Tax reforms reflect dedication towards a pro Technology, Infra and Trade oriented year ahead. The budget intends to build robustly Agriculture and Farmers Welfare, Social Sector and Rural employment to further bridge the gap between Bharat and India. The Budget however lacks on simplicity quotient by initiating varied cesses this year unlike last year. Cess and surcharge on clean energy, for Infra and Agri,and even in Corporate tax shall prove to be raising complexities and hindrance overall,” said Dinesh Agarwal, Founder and CEO, IndiaMART.
MOOCs for entrepreneurs from remote areas
“100% deduction on profits for startups for 3 years will not help them much as not all the startups earn profits initially. Entrepreneurship, Education, training to be provided through Massive Open Online Courses will help the aspiring entrepreneurs from remote areas, who don’t get sufficient knowledge and guidance. Many sunrise industries including tourism and hospitality were expecting sector specific announcement in this budget,” said Prasoon Gupta, Founder and Director, Sattviko.
R&D credits and lower costs for innovations
“This budget is far from the reforms expected. In the startup ecosystem, entrepreneurs and emerging businesses were hoping for some exciting announcement to encourage entrepreneurism and innovations. However, the silver lining was the announcement for women and SC/ST entrepreneur with Rs. 500 crore allotments. As an entrepreneur, I was hoping that govt will include following topics: Capital for entrepreneurs should be more accessible and cheaper; Some tax benefits for start-up in terms of capital gain and dividend taxes; and Offering R&D credits and lower costs for innovations,” said Sandeep Agrawal, Founder & CEO, Droom.
Ease of doing business as a startup
Anish Basu Roy, Co-founder & Chief Enabling Officer, Shotang said “I think the various tax holidays and exemptions announced today for startups are a step in the right direction. However, clarity is still awaited on the amendments to the Companies Act which are much needed. Ease of doing business as a startup in India needs to go up considerably, especially in areas such as statutory compliances, raising capital and accounts & audit.”
