All eyes are now on the upcoming announcement of the full budget by the newly formed NDA government. The Budget 2024 is likely to be tabled in the third week of July, according to media reports.
However, there has been no official announcement regarding the date of the Budget 2024 presentation.
Investors and entrepreneurs in the startup sector are anticipating a more favorable business environment with enhanced regulatory and tax measures for startups.
Given that most startups are facing challenges in raising capital, the upcoming budget might provide incentives for investors to support innovative ideas that show a clear path to profitability, say experts.
“As an early-stage VC fund that originated in India, we feel it's important to incentivise and increase the participation of Indian institutional investors to become significant LPs in local VC funds. This will very much help reduce the time taken by most local funds to raise funds of meaningful size which can then be deployed to catalyse the fast-growing startup ecosystem in the country,” said Shyam Menon, Co-founder & Partner Bharat Innovation Fund.
Menon further added, "As a fund focused on deeptech, we would also like to see increasing investment in fundamental and applied science research in bleeding-edge areas at the leading academic institutions and research labs across the country. This will help create the fertile ground for disruptive tech IP to be created by researchers and academics which can then be commercialised via deep tech startups that can go global from India."
Entrepreneurs are also looking forward for the government to provide infrastructure for to provide basic essential facilities for the startup sector.
“Like China and other developed countries, we expect the government to fund infrastructure that provides all basic facilities to handhold startups during their initial period. Creating startup hubs with state-of-the-art facilities, co-working spaces, and access to essential services can significantly reduce operational costs and provide a nurturing environment for innovation and growth. By democratizing access to resources, we can unlock the potential of a broader talent pool. Government initiatives should focus on providing equal opportunities to all aspiring entrepreneurs, ensuring that innovation is not limited to a select few.,” said Ajay Goyal, Founder and CEO, Erekrut.
Meanwhile, tech industry anticipates a transformative phase that could set new benchmarks for innovation and growth.
"Expectations are high for increased allocations towards digital infrastructure, artificial intelligence, and cybersecurity, aiming to bolster India's position as a global tech hub. Industry leaders are hopeful for incentives to spur investments in startups and emerging technologies, furthering the vision of a digitally empowered society. Streamlined regulatory frameworks and policies promoting ease of doing business are anticipated to foster a thriving entrepreneurial ecosystem, driving sustainable growth and business innovation," said Suchita Vishnoi, co-founder & CMO at GatewAI.
Logistics industry expects the upcoming budget to include making large infrastructural expenditures to improve efficiency, such as building multimodal logistics parks and designated freight corridors.
"For enhanced operations and transparency, embracing cutting-edge technology like AI and IoT needs incentives. Streamlining the GST system and encouraging sustainability by using electric cars and other eco-friendly activities is also essential. Innovation and growth will also be fueled by assistance for SMEs, startups, and skill development as well as by encouraging public-private collaborations and streamlining regulatory procedures. By addressing these issues, the industry will contribute more to India's economic development."
Entrepreneurs are also expecting additional tax incentives to the investors and promoters. “The startup ecosystem in India has entered the next stage. Need more domestic capital to be allocated in this space. Additional tax incentives ( say, the Ist 20% of profit on sale/transfer of holdings will be exempt from tax ) to the investors and promoters will go a long way in this direction. The sector needs domestic capital,” said Brijesh Damodaran Co-Founder & Partner, Auxano Capital.
The budget should prioritise a four-pronged approach: empowering SMEs by bridging the credit gap, investment in cutting-edge technologies, more focus on women-led small businesses and ensuring inclusive growth, says Gurjodhpal Singh, CEO, Tide in India.
“While the Startup India initiative has provided valuable support, a significantly larger dedicated fund is needed to truly propel India's AI and other frontier technology sectors. This ecosystem holds the key to propelling India towards its USD 7 trillion economy target by 2030. Similarly, further investment in Skill India Digital can enhance their workforce's capabilities, as fostering innovation in emerging technology is essential to keep India competitive on the global stage,” Singh added.
