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Startups seek friendly policies, tax incentives
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SME Times News Bureau | 23 Jan, 2022
To further aid small businesses and empower entrepreneurs, the Union
Budget 2022-23 should introduce additional startup-friendly policies and
tax relaxations to enable spending on innovation, ease-of-doing
business and reducing compliance costs, a slew of homegrown startups
said.
New reforms, policy assistance and support mechanisms for
establishing a focused approach in solving unmet financial needs through
technology will significantly benefit the economy, they stressed.
"We've
seen a substantial spike in the adoption of digital payments in the
last one year. I'm hoping that in the upcoming Budget, the government
will think of alternatives to the Zero MDR (merchant discount rate)
policy, as that will help promote e-payments and drive significant
digital adoption among businesses," said Harshil Mathur, CEO and
Co-founder, Razorpay.
In last year's Budget, Finance Minister
Nirmala Sitharaman had announced Rs 1,500 crore to further accelerate
digital payments' growth in the country.
Mathur said that it
would also be desirable for the government to increase contribution to
the Fund of Funds for Startups (FFS).
"Hassle-free loan
disbursements, automation of tax and compliance, paper-less approvals,
and incentives to adopt digital banking practices will also be welcome
changes that can support the growth of MSMEs," he added.
To
incentivise startups, the government had last year extended the
eligibility for claiming tax holidays for startups by a year to March
31, 2022.
It also extended the capital gains exemption for investment in startups by a year to March 31, 2022, to boost funding.
The country has also seen numerous startups incentivising their employees in the past year with buying back ESOPs.
"Deferring
tax payments when exercising the option, plus waiving tax for some ESOP
receipts, will also be a laudable change in the new budget," said
Mathur.
According to Ravish Naresh, CEO and Co-founder,
Khatabook, they are hoping for a progressive Budget, especially aimed at
promoting homegrown startups focused on problem-solving for India.
"New
reforms, policy assistance, and support mechanisms for establishing a
focused approach in solving unmet financial needs through technology
will significantly benefit the economy," Naresh told IANS.
"In
addition, the government's continued focus on enhancing digital
infrastructure in the country will ensure progress towards equality in
digital access in FY22-23," he added.
In the last year's Budget,
the government had said it will facilitate setting up of a world-class
fintech hub in Gujarat International Finance Tec (GIFT) city.
The
government also proposed a portal to collect relevant information on
gig workers to help formulate social security schemes for them.
Vidit
Aatrey, Founder and CEO of homegrown social commerce platform Meesho,
said that a singular focus on augmenting offline MSMEs with online
distribution could be a game-changing economic transformation
opportunity.
"We would like to see the government focus on
policies that will create a level playing field for offline and online
sellers with less than Rs 40 lakh turnover," Aatrey told IANS.
"Simplifying
GST compliance requirements for online sellers will also enable
millions of small businesses to leverage the potential of e-commerce and
contribute to India's growing digital economy," he added.
In
addition to this, the startups hope that the government incentivises
capital formation in the area of logistics and cold chains through
policies and infrastructure development.
Akash Gupta, Co-founder
and CEO, Zypp Electric, said that they are optimistic that the
government will announce new initiatives to encourage local EV
manufacturing, facilitate easy finance and create an innovative EV
ecosystem.
"We urge the government to reduce GST on EV purchases
and rentals from 5 per cent to 2 per cent. A reduced GST would allow
consumers to smoothly shift to EV," Gupta told IANS.
Indian
startups raised a record $24.1 billion in 2021, a two-fold increase over
pre-Covid levels, while $6 billion were raised via public markets with
11 startup IPOs, a Nasscom-Zinnov report said last week.
The
Indian tech startup base continues to witness steady growth, adding over
2,250 startups in 2021, which is 600 more than 2020.
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