Aravind SundaramWell, it is not only the industry stalwarts who welcomed the budget, but startup entrepreneurs too welcome it. Here are some of the Founders and CEOs from path breaking startups who are sharing their reactions.
Dr Ajay Data, Founder & CEO, VideoMeet
The announcement by the Honorable Finance Minister regarding the startups was much required at the moment and will help the fledgling startups with meager resources to continue with their business operations without worrying about the compliance with complex taxes. The announcement comes soon after Prime Minister announced setting up of Rs 10,000 crore fund for seed funding of startups.
These moves by the government make the intent of government clear that it wants to promote entrepreneurship and help the enthusiastic young entrepreneurs in the country.The setting up of separate administration structure to promote ease of doing business is a laudable move by the FM. Also, as predicted startups were given importance under this budget and the industry is poised to be greatly benefited with the Tax holiday extended by another year till 31 March, 2022.
Vamsi Krishna, CEO & Co-founder, Vedantu
The National Education Policy has been a strategic move towards guiding the development of India’s education. To strengthen the policy further, this Union Budget is focusing on initiatives like National Digital Educational Architecture (NDEA) which will provide a diverse education eco-system for the development of digital infrastructure, educational planning, governance and administrative activities. The complete shift from using assessments to not only judge the cognitive levels of the learner but also using it as an opportunity to identify the unique strengths and the potential, is a student centric approach which will lead to the holistic development of a child and provide them a greater edge, globally. Further, I would like to see more investments & budget allocation to go into the education sector to enhance it with more trending technologies which will make education accessible to students in the farthest corners of the country.
Prateek Rathee, Founder and CEO, Homezop
Union Budget 2021 has brought many hopes with it especially for startups and MSMEs. The big boom for the sector is the step to incorporate one person company without any restriction on paid-up limit with no restriction in paid-up capital and turnover to incentivize innovation in startups, as well as an updating the definition of small companies under Companies Act, 2013 by raising the capital base to Rs 2 crore from the current limit of Rs 50 lakh. This will hugely impact the small business enterprises in India in a positive way as it will increase the numbers of startups and MSMEs and also boost the entrepreneurship spirit in the country.
The Budget also decriminalized limited liability partnerships, with the flexibility to convert a company to any form of management which will benefit more than two lakh companies in easing the legal compliance requirement. Finance Minister also announced to increase the number of entrepreneurs in India by reducing the residency limit for any Indian to 120 days from 3 years.
Farooq Adam, Co-Founder, Fynd
The union budget of the year 2021-22 is the most crucial Budget of India in recent years. With government focus on reviving the economy and lessen the burden. They have given a good push to Infra Development which will help in India’s overall development, leading to more employment, improve supply chain and logistics. There were expectations that the government would broaden some tax advantages through Budget but there was no change in tax slabs. Overall glad no surprises on personal income tax. As far as the start-up industry is concerned, we welcome the policies introduced by FM but they are not path breaking.
Archit Jayaswal, Co-founder & CFO of Virohan
The budget of 35000 Crore for Covid Vaccinations is much needed – While India has a large requirement that will be served by both domestic manufacturing and import. It will be great to see the government invest in the entire chain of logistics for rolling out the Covid Vaccines – from manufacturing to distribution in a controlled manner, and actual last mile inoculation. We will be happy to work with the government in training people to ensure that last mile inoculation in the coming period is done by properly trained workforce. Virohan’s hybrid tech stack that includes offline touchpoints makes it very well placed to work with the different agencies to train the manpower and help deliver these vaccines to our population at scale.
Amit Das, Co-founder and CEO of Think360.ai
As a young company, we always want more and expect less from a budget; There are quite a few interesting bits here though – the increased capital expenditure should drive second order growth in various other industries as well. The 1500 Cr scheme to promote digital payments, the first “digital census”, faceless dispute resolution mechanisms for greater efficiency, relaxation of norms for OPCs.
I think its good that we are not too focused on fiscal deficit targets this year, given the kind of crisis 2020 was. Couple of places where I would have liked to see more schemes – healthcare corpus, and more credit schemes beyond agriculture. A specific call out or scheme for the AI industry and the role it would play in establishing our global dominance would have been a welcome step.
Balachander Sekhar, CEO & Co-Founder, RenewBuy.com
By focusing on healthcare by launching Atmanirbhar Swasth Bharat Yojna, the government has taken a welcoming step for strengthening the health infrastructure of the country. Announcement of INR 35,000 crore for COVID-19 vaccines will show a ray of hope and push the country towards a V shaped economy. This brings health insurance in prime focus, as it is critical for every medical emergency and is a backbone for making medical facilities accessible and affordable to the Tier 2 & 3 cities.
Suman Matcha, Chief Executive Officer, Online Adaptive Knowledge System (OAKS)
According to Mrs.Nirmala Sitharaman agenda on education budget, it is perceptible that innovative technology has to be the protagonist either to adapt skill based learning by leaving behind the old school roting rituals or colluding with UAE & Japan to imbibe the 21st century skills by yawing from existing uni directional assessment. Catering the assistance to 271 M students in K12 or the Digital native / mobile first NHB segment, ED TECH solutions play a catalyst role in prospering implementation of NEP 2020 objectives, replicating the role, tech has played during the pandemic scenario where students could over go the hindrances of closed schools.
Tanuja Gomes Co-CEO, Co-Founder, Furtados School of Music
Education sector is being reshaped with the budget 2021 allocation for the sector. As we move in 2021, we are bound to witness a significant transition in the learning process which will move from the mundane and rote learning to an engaging experience altogether. National Professional Standards for Teachers- NPST will help the teachers to upskill themselves and reinvent a new way of teaching.
The National Digital Educational Architecture (NDEAR) will help in establishing a diverse education ecosystem that will in turn develop the digital infrastructure ensuring the autonomy of all stakeholders, especially States and UTs. Using the assessment to judge the student on the basis of their talent and skills will help students to understand their areas of strengths that can be leveraged in future to make the optimal career choice.
However, the moves from Budget 2021-2022 are likely to be incremental in sectors across rather than a big push to education. The National Education Policy needed an execution plan, while 15,000 schools to be qualitatively strengthened is a great start. This will also pave way for future school; a brief plan to further attract foreign or domestic investments in Edtech would have helped, however the budget did not capture a significant change in education infrastructure, regulations and financial outlay. Overall this will help us to continue the amazing growth we have witnessed.
Praveen Kumar Gupta, Co-founder, Planet Organic
The Budget 2021 has really pushed for a stronger and improved Aatmanirbhar Bharat. The government’s focus on increasing the purchasing power of the farmers will encourage more farmers to adopt organic farming. As Organic farming products generate more outflow as compared to traditional farming methods. We at Planet Organic believe that Organic farming is the future of agriculture.
The government’s proposal for allocation of funds for MSME sectors, reduction of marginal money requirement and extension of tax holiday for start-ups is a great initiative and will be helpful for every single startup.
Rajat Jadhav, Co-founder, Bold Care
The budget has rightfully taken into account the health of the scathed startup ecosystem in India and has simultaneously acknowledged their potential to change the face of the Indian economy. The extension of the tax holiday by a year is a welcome move that will provide relief and have a positive effect on the start-up sector. The increased focus on capital infusion and ‘Make in India’ initiatives will encourage start-ups to innovate and expand their folds in a non-strenuous and nurturing environment.
Paid-up capital for enterprises with a turnover of upto Rs. 2.5 crores will inspire newer investors in the start-up space while the focus on FDI will help existing players to transform themselves into global case studies. Also, the increased impetus given to skill development and R&D will enhance the investment climate and spur growth leading the path for start up’s of today to emerge as MNCs of tomorrow. Additionally, the technology-driven measures along with simplification of the GST structure will add a new dimension to the long term development of this sector.
With a connectivity focused approach and a digital transaction inclined culture, the union budget has made it easier for startups to deepen their hold over the geographies of the country. Also, ease of business will help startups maneuver the marketplace and flourish in a competitive economy.
Ram Iyer, Founder and CEO, Vayana Network
This is a great budget with a lot of growth boosting measures. In the backdrop of the pandemic and resultant fiscal situation, the government has done a great balancing act. There are a number of steps announced to boost capex and infra; and manufacturing which will create huge trickle down benefits for the economy at large. To achieve this within tight fiscal deficit targets and without impacting the tax rates will be a herculean achievement.
The key positives for businesses include –
1. Creation of a huge DFI to fund India’s infra ambitions over the next 3-5 years
2. Vehicle scrapping policy will give a boost to the Auto sector in coming years
3. Launch of multiple infra and capex projects will give boost to manufacturing, steel and cement sectors
4. Further allocations for PLI in manufacturing is a great step to place India firmly in the global Supply Chain ecosystem in core sectors like Electronics
5. Smaller businesses will see more ease of doing businesses due to relaxation of audit & GST norms
6. Divestments of some PSUs and higher FDI limits in insurance will lead to entry of global players with deeper commitment to India and also boost innovation.
Harsh Pokharna, Co-Founder & CEO, OkCredit
OkCredit welcomes the budget proposals of 2021-22 which rightly focuses on small and medium businesses (SMBs), health, agriculture, and infrastructure sector to achieve inclusive growth and boost economic activity impacted by Covid-19. The continued focus on enhancing the ease of doing business for MSMEs with several measures such as extension in tax holiday and exemption on capital gains for startups by a year, separate NCLT framework for faster resolution of bad debts of MSMEs, increase in the maximum threshold of paid-up capital and maximum turnover of small companies, custom duty rate change for creating a level playing field for MSMEs and domestic manufacturers augur well for the economy.
The decision to allocate Rs 1,500 crore for promoting a digital mode of payment and enhancement of tax audit limit for those companies having less than 5% cash transactions to promote digital economy are very logical and will boost the formal economy. The decision to enable non-resident individuals with the entrepreneurial potential to set up One Person Companies (OPC) with no paid-up capital and turnover restrictions are the other salient features of the budget and will help in the creation of startups.
Ahuja, Founder & MD of Big Boy Toyz
The much anticipated budget has put out a fruitful manifesto for the automobile sector with an approximate amount of INR 57,000 crores being allocated for auto and auto components and 1.08 lakh crore to MORTH. A remarkable expenditure has been assigned for roads & it’s infrastructure.
Other than this, Voluntary scrappage policy seems like an exceptional step, where the customers will be able to get their vehicles tested & use it for an additional 5 years ensuring maximum customer satisfaction & an increase in sales. An upsurge in Research & Development as quoted by our honorable Finance Minister, looks promising for the automotive sector. Also, a 15% increase in customs duty for some auto parts along with the PLI scheme seems like something which will go a long way towards building an independent nation.
Overall, a relief in tax slabs, adequate allocation of funds into every sector & introduction of new schemes come as a ray of hope after a difficult year. We at Big Boy Toyz look forward to complying with all the government regulations and starting out again in full swing!
Chahatt Khanna , Director of AMMARZO
The textile industry, which is among the largest-hit sectors due to COVID-19 has urged the government to implement a constant GST for apparel industry and to abolish anti-dumping duties on viscose staple fibre (VSF) in the upcoming budget.
This indeed is a superb news for us since because of the Covid-19, the textile & the fashion industry has suffered a lot. During the global pandemic, like any other fashion brands, Ammarzo has suffered as well, but we were strong enough to keep it going all through out the pandemic. Now the new budget is definitely going to make the work more easy and better for us!
It is definitely a cherry on the cake knowing that the textile ministry has proposed to develop seven Mega Integrated Textile Region and Apparel parks to double the industry size to $300 billion by 2025-26. On top of that it’s more exciting to know that the mega textile parks will have consolidated facilities and quick turnaround time for minimizing transportation losses.
Hemanth Chandra, Founder & CEO of Pickkup
A focus on economic revival and healthcare have been the twin focuses of this budget, as expected which is welcome given the needs of the time. We welcome the commitment to infuse significant funds into capital infrastructure, projects such as urban infrastructure, public transport systems that will not only improve ease of living but also generate much-needed economic activity and jobs. The 137 % surge in healthcare budget is another highly welcome initiative given the fact that COVID 19 has dented major healthcare goals and created the need to strengthen public healthcare and critical care support for millions of people. Through its increase in spending, clear disinvestment targets and digital push, the budget has laid a strong commitment on economic revival, despite an increasing fiscal deficit. The focus on sectors such as roads and urban infrastructure, real estate and affordable housing, will also help propel growth in other sectors.
From a startup viewpoint we welcome the announcements that simplify and ease tax compliance and improve the investor environment in the country. An additional year of tax holiday for startups was much-needed. Similarly reducing tax and compliance burden on senior citizens, removal of double taxation for NRIs, and reduction in period of tax assessments that can be reopened is highly welcome. Allowing one-person companies is another significant step towards improving the startup ecosystem.Overall, it is a pro-investor budget focused on economic revival. However, we would have liked to see a greater rationalization of GST structure as well as easing of the compliance burden of GST as this has been a major pain area for small businesses.
Mohammad Tareeq, CEO, Valasys Media
Given the needs of the time, the budget has focused (and rightly so) on boosting healthcare and inducing an economic revival in the economy. Being the first post COVID budget, the industry was essentially looking at announcements that will help create an investor friendly environment, support the startup ecosystem, improve ease of doing business and generate much-needed jobs.
Through an extensive push to capital expenditure spending for urban infrastructural projects and measures for affordable housing, the Finance Minister has tried to unleash much-needed economic activity particularly in sectors that will propel other sectors to grow.Importantly, the budget also furthers the government’s push towards a digital economy by consolidating measures that boost digital payments, digital ways of doing business as well as digital modes of dispute resolution etc. This is highly welcome given the changing nature of the economy in a post COVID world.
Overall, the budget also focuses on a series of measures that will improve the startup ecosystem and create an investor friendly environment. Steps that help ease tax compliance, reduction for time period to re-open tax assessments, enabling investors to set up One Person Companies and one-year extension of tax holiday for startups are welcome steps that will help improve the overall business environment in the country.However, we would have also liked to see a greater rationalization of GST structure and compliance process which is much-needed to improve the ease of doing business in India.
Dr. Nikhil Sikri, CEO & Co-Founder, Zolostays
At the highest level, FM has announced a major central health scheme, income tax rebates and said the government is focussed on farmer welfare. There are a couple of things that have gone right with the budget but the biggest positive is that there are no big negatives. There is no additional tax burden which a lot of people were afraid of before the budget. We got spared of taxes on the ultra-rich, Covid cess (which almost felt like a certainty before budget) or any tinkering with long term capital gains tax.
There has been the announcement of several measures to simplify business challenges, including changes to the administration of direct taxes while increasing compliance. Affordable Housing Projects have gotten the tax rebates extended for a year to Mar 2022 which might take us one step closer to not only PM’s dream of ‘Housing for All’ but also Zolo’s mission for “Beautiful living for All”.
Dr. Gaurav Hirey, Founder & CEO, GoEvals
The focus of India’s 2021 Union budget is clearly on economic development, infrastructure & health and wellness. The biggest need is to push consumer spending and I think this budget should achieve a good level of success if it is implemented in its true spirit. Initiatives like increasing the amount of spending in health & wellbeing which was long overdue will definitely help. As will building of road infrastructure, boosting the textile industry & creating more ports among others. Given the extreme circumstances faced due to the pandemic the budget comes across as balanced and practical.
However, from a start-up ecosystem perspective I am not sure what this budget is really offering to start-ups. Extension on the tax holiday by a year & reducing margin requirements are not significant and start-ups are not getting the importance that they surely deserve. There is no concrete proposal on easing the process for doing business nor on ground real support in terms of finance & education of start-ups which continues to be a major issue. End of day how this budget will translate into real help for struggling start-ups given what they have faced in the past year is a big question and I believe this is a lost opportunity in this area.
Anish Mulani, Director; India CEO – Wave
It is encouraging to see the government’s support for the start-up sector in this Budget. By extending the Tax holiday for start ups for one year; government has given the much needed breather to the existing startup ecosystem which got choked during the COVID time.
The continued extension of the Stand-Up India programs by the government until will ensure that start-ups all across the country will receive funds to accomplish their goals and dreams. Focus on digitization is clear, which is good for the industry. Overall, it feels great to see that the government is making more room to nourish startups in India.
Mahesh Basavanna, Founder & Director, KIRU by OrgTree
Healthcare and nutrition get attention in this budget which is good especially post COVID. Wellness & Health have to be the overall priority. The increased capital through DFI ( Development Financial Institutions) will hopefully help develop economic corridors that will benefit all sectors. Though I expected incentives for modernization of agriculture sector and also setting up special economic corridors with incentives in the rural sector for overall development which was missing. The reduction of margin money requirement from 25% to 15% for startups could prove beneficial.
Yogesh Agarwal, Founder, Onsurity
This budget has embarked a new India for the startups, SME, healthcare, and insurance sector.
1. The announced PM Atmanirbhar Swastha Bharat Scheme is a landmark as it is truly Atmanirbhar where the government focus is to create more healthcare infrastructure rather than financial protection. The increase in healthcare spending would mean that the infrastructure would be available for affordable healthcare on which Startups can create micro risk products for the SME and MSME. It would also mean better healthcare for Bharat and make it more ready and healthy!
2. Had seen for the first time on the consideration of the nutrition. This means that Bharat will start having more awareness on the healthy lifestyle.
3. The increase in FDI in the insurance sector from 49% to 74% is an announcement which the insurance sector was waiting for the last 2 years. This will now bring more investment and infrastructure in the insurance space and will help insurance companies to increase the insurance penetration. It will make it easier for more professionals to insurance manufacturing business.
4. The disinvestment in 1 of the general insurance company which will bring more expertise in the Public Sector Companies and would enable them to focus on creating more innovative and risk products.
5. The increase in the revision of the Paid Up capital for Small Companies is again a welcome move for MSME and SME which would lead to the further formalization of the sector.
This is not stopping. We have more such reactions coming further. Be ready to read from more industry stalwarts and young turks.
Aravind Sundaram
Guest Author