Union Budget 19-20: Unleashing The Indian Entrepreneurial Spirit
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The Union Budget 2019 clearly established the roadmap envisaged by our Government – setting India on the course to become a $5 trillion economy by 2024. What was really heartening to witness was how the honourable finance minister made it quite clear that startups and entrepreneurs will be playing a crucial role in making this a success; by introducing a slew of incentives for startups in India.
Making Business Easy for Entrepreneurs
For any entrepreneur, the resolution of angel tax is a big advantage. Whether they raised capital from angels or other investors, the subsequent relief in terms of capital gains, valuation and taxation are huge. Not only would this pave way for more capital infusion but also clear any uncertainty for companies that have raised millions in funds.
Other incentives such as a TV programme for startups - our very own ‘Shark Tank’ focused on matching startups with venture capitalists, organising an annual global investors' meet, simplified KYC norms for foreign portfolio investors and, easing the pressure from tax authorities all show the deep commitment by the Government in making India a hub of entrepreneurial innovation.
What Next? Need For a Clear Policy
Though the provisions are welcome, what is now needed is a clear policy or regulation that encompasses the overall startup sector in India (irrespective of the industry). In the last five years, there have been quite a few measures introduced but there is a lack of cohesiveness on a national level. Startup India began with tremendous fanfare but, the results of the first wave have not been as expected. In the next 5 years, it will be great if we have a blueprint like Israel – be it starting 1000 new companies with adequate funding, scaling to a crore-rupee of revenue and aspirations to build a profitable business by 2024.
Time to Build a Digital India
The promise of building a $5 trillion economy cannot be achieved without successful digitization of the entire country, down to the last mile. Though the budget touched upon the skill gap in India, with a promise to train 10 million youth in areas of Artificial Intelligence, Big Data and Robotics, there is a lot more to be done in the field of technology adoption. For instance, the tax exemption for manufacturers of silicon chips, solar components, and computer servers is likely to attract global and Indian companies to manufacture locally. Not only will it create job opportunities; combined with lessening labour and material costs, it will also provide an opportunity for India to become a computing superpower. Not to mention, incentivizing manufacture of critical IT components indigenously will help strengthen national cybersecurity over several decades.
In the next five years, policy and budgetary focus need to be on maximizing tech adoption - transforming education, healthcare, manufacturing and data management, all inside an environment of robust cybersecurity. Starting with investments in research and academia that creates more institutions with the calibre of Cambridge, Stanford or older IITs. The formation of the National Research Foundation (NRF) is a good start. In addition, continued focus on cutting-edge technologies, design thinking, information security, etc. should be encouraged in all institutions of higher learning.
In the coming times, India needs a concentrated effort to build an ecosystem delivering a steady stream of entrepreneurs and job creators in all sectors.