“A chapter that has a Western beginning, will have an Indian ending,” said a smiling Jaitley, during his Budget speech on 29th February 2016, after he proposed his schemes for the MSMEs and startup industry.
Prime Minister Narendra Modi had made it very clear through the ‘Start Up India; Stand Up India’ initiative that the government wants to play the supporting role and that of an enabler. The budget just proved it to be true. This very startup friendly budget, no doubt, has its flaws and these have not gone unnoticed. But this budget has also given startup founders much relief. The efforts to empower SC/ST and women entrepreneurs are on spot and much appreciated all over the country.
We discussed these schemes with Sairee Chahal, co-founder of Shereos and she said, “Budget 2016 has some interesting areas of focus - especially in urban transport, profit tax, employment and employability. Focus on digital literacy; exemptions for poor women, enhanced agriculture focus are positive steps. Overall, it seems like a mild budget with no major signs of reform or deviation. Steady and stable is the keyword, as India continues to grow faster than its peers and also meet some of its key taxation and revenue targets.”
We talked to her about some specific schemes government has for startup and this is what she has to say.
On tax exemption and registration being reduced to one day
The Finance Minister in his Budget speech said to boost economic growth and employment. For that a 100% deduction of profits for 3 out of 5 years for start-ups, during April, 2016 to March 2019, with certain riders will be available. Similarly to promote innovation, a special patent regime with a 10% rate of tax on income from worldwide the exploitation of patents developed and registered in India was proposed.
Where now it takes between 15 and 30 days to register a startup, the time period has been reduced to one day. It would also be interesting to see if all steps ranging from Digital Signatures, Director Identification Numbers (DINs), Name approvals and Certificates of Incorporation can be done in 1 day.
Commenting on the same, Sairee Chahal said, “The budget from a startup owner’s point of view is very pro startups. Having freed startups from paying tax on their profits for three years out of the first five years of existence... From a startups point of view, profit tax exemption for first three years is a good step, though most startups won’t make money in the first three years.”
On spreading Digital Literacy
"Skill India Mission seeks to capitalize on our demographic dividend. Since its launch, the National Skill development mission has created an elaborate skilling ecosystem and imparted training of 76 lakh youth. We want to bring entrepreneurship at the doorstep of youth thorough the Pradan Mantri Kaushal Vikas Yojna and decided to set up 1500 multi skill training institute across the country. I am setting aside an amount of Rs. 1700 crore for this initiative," said the Finance Minister.
He further added that entrepreneurship education and training will be provided in 2200 colleges, 300 schools, 500 ITIs and 50 vocational institutes through massive online courses.