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Thursday, August 05, 2021

Thumbs Up and Down: How startups have responded to the Union Budget 2021

Start-up leaders from Pune react to provisions under Union Budget 2021.

Written by Dipanita Nath , Ruchika Goswamy | Pune |
Updated: February 2, 2021 3:27:35 pm
From left: Ashutosh Gawade - Founder of Eadicct, Sunanda Verma Bhatta - Co-founder of Daftar and Akshay Mehrotra, Co-founder and CEO of Early Salary.

Ninad Vengurlekar, Cofounder, Utter App

The single-person company is expected to give a boost to entrepreneurs looking to set up business in India. This policy would ideally work for hi-tech innovators who can now use this policy to build licensing agreements for their innovations in India, without the need for complicated processes of setting up a company. To me, the Rs 1,500 crores dedicated for improving digital payments in India will provide a huge boost to monetisation in the entire startup ecosystem. I hope this fund focuses on enabling digital transactions rather than opening more and more digital payment accounts.

Akshay Mehrotra, co-founder and CEO, Early Salary

While the budget was a consumer sentiment damper yet its focus on Atmanirbhar Bharat and the six pillars of health and wellbeing, capital and infrastructure, inclusive development, reinvigorating human capital, innovation and R&D and minimum government and maximum governance will allow more focus in internal growth and start-up community. With a clear focus on infrastructure, this will help create grass-root jobs and also min wages coming will uplift the core lower-income working population.

Akshay Mehrotra

FDI in insurance increase and setting of Development Finance Institution will help improve financial services business in the country and similarly the higher credit to agriculture will boost the Agri economy. Healthcare shot was much needed and focus is given and similarly, primary education boost with 15000+ schools should help. Lack of additional support in tax saving instruments or tax slabs is a damper to middle-class India which is going through the pain of covid impact.

Sunanda Verma Bhatta, co-founder, Daftar

The pandemic has taken a huge toll on startups. With the slowing down of the economy and lack of funding, the sustainability of startups is a big concern. The provisions like the extension of tax holiday and exemption of capital gains will help to boost the investment in the startups. Lowering the compliance burden, reducing residency requirements, and setting up of seed fund corpus are a welcome move to encourage new startups. However, the existing startups who are struggling to stay afloat and survive don’t have much help coming from the new budget announcement.

Sunanda Verma Bhatta

Joji George, Co-Founder, Gonuts

Budget 2021, though positive, left us wanting some more from a startup and MSMEs perspective. The government’s decision to bring in institutional investors to invest in startups is a positive move and will encourage more investment into the start-up community. Of course, the start-up community need to see and understand the fine print. The Finance Minister has announced, registration of one-person firms with no limit to paid up capital will boost the start-up ecosystem. That helps small entrepreneurs to take the leap.The government has doubled its expenditure allocation towards micro small and medium enterprises to Rs 15,700 crore in FY22. This is an excellent move for companies like us that work with large number of MSMEs. Another boost offered by the government is extension of tax holiday for start-ups by one more year. This will help get startups on their feet as they grapple with cash flow and investment.

Ashutosh Gawade, Founder of tech-start-up Eadicct

Since I have been running a Private Limited One Person Company (OPC), I see a huge benefit for our start up in the coming years as there will not be any tax audit and we will still take benefits of being a Private Limited company. Most of the start ups, once they get traction and have a turn over more than one crores, focus on various compliances and audits which will be removed now. So surely a welcome step.

Ashutosh Gawade

We are working on three domains, mainly e-mobility, healthcare and technology for defence. In all three sectors , the government has increased a budget heavily. MSME budget is more than doubled YOY, Atmanirbhar Bharat was allotted 2.23 lac crores along with defence budget and customs on automobile part import increased. All steps shall collectively pump up localisation. This will also attract investors to take risks and invest more in start-ups like us. Overall happy and optimistic with the 2021 budget. India is heading towards V- shape recovery after a sharp fall due to COVID.

Malhar Katare, Co-founder, PawshBox

The Indian Start-up ecosystem is the third largest in the world. One major factor contributing to this is the various hand-holding measures provided by the government. The government has yet again simplified regulations, which proves helpful for early stage start-ups. Recently a Seed Fund Scheme of ₹945CR was also announced. This will make it easier for start-ups to receive investment.

Malhar Katare

Start-ups have been badly hit during the Covid crisis and so many are fighting to stay afloat. The capital gains exemptions and tax exemptions for another year, for eligible start-ups, will provide the necessary brace required. This support from the government will encourage an increasing number of students and young citizens to get aboard the start-up journey and in turn create more employment and create wealth.

Akshay Poorey, co-founder of DINGG, Queue management start-up.

Akshay Poorey

Finance Minister Nirmala Sitharaman has given a New Year gift to the start-up world and its welcome move by the Government as they are shifting focus towards start-up growth by allowing incorporation of one-person companies, with no restriction in paid-up capital and turnover, help individuals without forcing to find out a co-founder and can incorporate the company alone. They revised the small company definition by raising capital base to two crores, tax holiday extended to March 2022. All this would help the start-up world to stand up faster after the pandemic effect.

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