Expectations Of Startups From Budget 2023 One of the most important expectations of the startups is to increase the GST exemption slab for them from the current 40 lakhs to 10 crores
By Manish Gupta •
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
In the last few years, India has emerged as one of the world's most preferred destinations for startups. From less than 500 startups in 2016, the number has touched 85000+ today. The government of India has been striving to create a business environment that is conducive to the entrepreneurial spirit. The startups have repaid the faith shown by the government- contributing 2.5-3 per cent currently to the national GDP and are expected to contribute more than 4 per cent to the GDP in the next 3 to 5 years. Startups have also created more than 7.5 lakh jobs in the past few years.
Tax reforms
One of the most important expectations of the startups is to increase the GST exemption slab for them from the current 40 lakhs to 10 crores. The sector also expects the government to reduce the minimum alternate tax (MAT) from 15 per cent to 9 per cent. This will enable the startups to have more working capital in hand for day-to-day requirements. The sector also expects the government to introduce a single window clearance mechanism for startups to claim tax incentives.
Another expectation is on the personal income tax front. The startups expect the government to revise the personal income tax slabs and make the no income tax for income up to INR 5 lakhs and move the subsequent income tax slabs further up. This will put more dispensable income in the hands of people and promote spending. This will be beneficial for the entire economy including the startups.
ESOPs reform
For any organization, the key to success is a talented and stable team. Startups often face the problem of finding the right talent and if found, retaining it. ESOPs can be instrumental in attracting and retaining talent from the market. However, the taxation on the ESOPs often makes them unattractive to the employees. In this budget, startups expect the government to pay strong attention to ESOPs reforms. This will prove to be an important step towards bringing stability to the sector.
Incentives for skill development
Skill development is the key to the growth and development of the economy. The investments made by any organization in skill development not only bring long-term returns for that particular organization but also for the entire economy. Therefore, startups expect the government to incentivize the startups investing in skill development.
Startups, over the years, have been instrumental in serving millions of people living on the margin. Basic facilities like healthcare, education, hygiene, and financial services have been brought to millions by the efforts of startups. Many startups in fields like environment conservation, waste management, resource optimisation, etc. expect the government to reward them for their social efforts. These rewards could be in the form of tax incentives, tax holidays, preference in government contracts, etc.
Stability in policies: "A policy a day, keeps the investor away"
Although there are several expectations for the startup sector from the upcoming budget, one of the most important expectations is to not have any drastic policy changes for the sector. The outlook of the startup sector in India has been fairly positive in the past few years and the sector would like to keep it that way in the future as well. Stability and the predictability of government policies have helped the companies, as well as the investors, prepare their strategies and make informed decisions. The startup sector would expect the budget for 2023 to continue with stability in the policies.
