Industry Elated As FM Calls Startups ‘Drivers Of Growth’
Budget 2022 News: FM proposed that 'an expert committee will be set up to examine and suggest appropriate measures' to scale up the existing investment of Rs 5.5 lakh crore in Indian start-ups.
New Delhi: In her Budget 2022 speech, Finance Minister Nirmala Sitharaman called start-ups the ‘drivers of growth of our economy’. This laid special focus on how the present government looks at the investment ecosystem in the country. Also, with the rising popularity of the ‘Start-up culture’ with shows like ‘Shark Tank’, India is set to see a big change in the attitude in coming days, experts believe.
“Start-ups have emerged as drivers of growth for our economy. Over the past few years, the country has seen a manifold increase in successful start-ups. Eligible start-ups established before 31.3.2022 had been provided a tax incentive for three consecutive years out of ten years from incorporation. In view of the Covid pandemic, I propose to extend the period of incorporation of the eligible start-up by one more year, that is, up to 31.03.2023 for providing such tax incentive,” Sitharaman said in her speech.
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She also added that ‘an expert committee will be set up to examine and suggest appropriate measures’ to scale up the existing investment of Rs 5.5 lakh crore in Indian start-ups.
Measures To Boost ‘Rapid, Holistic and Inclusive’ Growth
Talking to india.com, Madhusudan Ekambaram, Co-Founder & CEO, KreditBee and Co-Founder, FACE said, ” Government’s recognition of startups as the drivers of economic growth is heartening. Measures like setting up an expert committee to suggest measures to help attract investment and extension of tax incentives period for startups incorporation by 1 year, will certainly aid in creating a healthy startup ecosystem.”
He also praised the government’s decision to boost digital banking by installing 75 digital bank units in 75 districts across the country. He continued, “Equally encouraging is the Government’s bid to boost digital banking and financial inclusion with initiatives like bringing 100% of 1.5 lakh post offices into the core banking system. In a broader sense, the Finance Ministry has presented a distinctive set of measures in Union Budget 2022-23, with a streamlined focus on rapid, holistic and inclusive economic growth.”
Start-ups Relieved By Extension Of Incorporation
Start-ups have faced considerable problems during the Covid-19 pandemic. The supply chain issues have continued to stifle the growth rate. On this, Gautam Dhar, Managing Director & CEO, Plantas said, “Global supply chains have faced considerable hurdles as a result of the COVID-19 epidemic. Multiple countrywide lockdowns continue to stifle, if not completely halt, the movement of raw materials and finished goods, causing manufacturers to suffer. Local startups have worked hard to stay up with the competition. We are relieved to see that the term of incorporation for startups has been extended by a year to 2023, allowing us to take advantage of tax benefits.”
Dhar also said that the focus on Research and Development is heartening. He added, “As more Indians engage in Atmanirbhar bharat schemes, promoting drone startups and allowing companies an extension to set up production units till 2024 would undoubtedly boost the industry. The allocation of 60% of the R&D funding to Make In India reemphasizes the importance of connecting the growth of new entrepreneurs with the expanding Indian economy.”
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