The government’s recently announced Startup India campaign has been welcomed by the start-up community as something that will further energize and simplify the incubation of new companies.
Among some of the key announcements made by the government included the setting up of a Rs 10,000 crore fund (over a period of 4 years) for start-ups, the launch of a new app and portal which will be the single-point of contact for all regulatory needs, simplification in regulatory requirements, an easier and more transparent way to file patents, among others.
“Increased access to funding was a key expectation from this plan and the Rs 10,000 crore corpus is likely to be a huge support for startups. The energy at the Startup India event was amazing and it was truly inspiring that the Prime Minister, multiple senior ministers, the most successful Indian entrepreneurs had all congregated in one place with a resolve to further develop the startup ecosystem in India. We now hope the Government will be able to implement the Action Plan at the earliest possible,” commented Rohan Bhargava, Co-founder of CashKaro.com .
Radhika Aggarwal, Co-founder & CBO, Shopclues, was also upbeat about the initiative, calling it the act of a “disruptive start up”. “The policies around cleaning the license raj will be a huge booster for Startup community while both setting up and dissolving a company. Other initiatives such as tax benefits, easy IPR regulations, and government academia will go a long way in making India’s start up ecosystem super successful,” she said.
Kulpreet Kaur, Co-founder of Shop Pirate Coupons, opined that the time has come for India to start creating technology products at home that can be marketed globally. She said that initiatives like Start-up India will go a long way in filling up this void.
“Its appreciable that the major concern of B2B business which is 10 per cent TDS and 14.5 per cent ST, have been noticed and government saying they will rationalize the same. It’s good to see that certain provisions are made where there are funds allocations for women entrepreneur. Ecosystem is getting changed and allowing more women to work, which is a highlight of Start-Up India Initiative. Hoping the budget session will further revolutionize the startups in India. Now the only concern will be ‘Sell it India’ that is a challenge that needs to be addressed next,” she added.
Gokul Chaudhri, Leader (Direct Tax) at BMR & Associates LLP, suggested the government should have a dedicated taxpayer services wing in the tax deparment working with start-ups, which would include guidance and assistance for tax compliance, amnesty from any inadvertent lapses, annual self-assessment tax payment instead of advance tax and the like.
“Certain onerous sections of compliance could be diluted or made not applicable for the first 24 months, unless the taxpayer is abusive in his behavior. The tax department has a Large Taxpayer Unit (LTU) concept for significant taxpayers. Similarly, a STU could be created in major cities as start-up taxpayer unit which held a new taxpayers take the baby steps into the world of taxes,” he said.
“This initiative of PM Modi is the right step in making the environment friendlier for entrepreneurs and thus encouraging them to start up. We will wait for the fine print to understand exactly what the next steps will be. However, I can only say that outcome will be in the positive direction and we are very excited,” said Raghav Chandra, Co-founder of Urbanclap.
Meanwhile, Prashant Rai, Founder and CEO of OneTimeJobs.com, pointed out that there has been no word on taxation on VC spending which still remains a roadblock.
“The true test of the government will now lie in how the policies are unfurled in the future to cut down red tape and ‘escape the License Raj’, as pointed out by Mr. Jaitley in his speech. Apart from this, it would take further efforts on the part of all the stakeholders – the government, the investors, entrepreneurs and the customers – to truly create a smooth ecosystem,” opined Dinesh Goel, Co-Founder & CEO, AasaanJobs.
Dinesh Agarwal, Founder and CEO at IndiaMart.Com, welcomed the PM’s action plan and called for the policies to be applicable to all startups, including MSME’s in manufacturing, trading, retailing and services sector. He also said that the definitition of a startup must be broadened to include all new businesses generating employment in any sector.
Anurag Jain, Co-founder & COO, Girnar Soft opined, “From a policy standpoing there are some welcome changes. Relaxation on Capital Gains for funds is the biggest, including exemption from capital gains when one has the ability to raise capital over fair market value. However, the fine prints are yet to be seen on this. Protection of IP in India has always been a issue, and new policy on patents can help protect various innovations that the country produces. However, the IT exemption might not help the startups too much as during build up phase most startups either lose money or make very little profits.”