Budget 2019 expectations for startups

By Srikanth
14 Min Read
Budget 2019 expectations for startups 1

It is essential that Budget 2019 should not hurt the ecosystem of the startup at the same time it should boost the startup community. The startup community is expecting some conducive policies that can help to remove the extra taxes that are eating into their profitability and growth potential.


In the digital growing world where daily new innovations are taking place. These innovations are not only done by larger companies but also by the new startups. Nowadays, startups are changing the economy of the world with their innovative creations.

Industry Experts Expectation from Budget 2019

Anil Valluri, President of NetApp India & SAARC

“The re-election of this government ensures continuity of the Government’s compelling vision for India to boost the economy and put India on the technology superhighway by 2030. Through the Union Budget2019, it would be key for the Government to put the spotlight back on its flagship initiatives like Digital India enabling digital infrastructure as a utility to every citizen, governance and services on demand, and digital empowerment of citizens. With the help of technology, the government should focus on catalyzing the smart city programme, to become growth engines for the country’s economy. We definitely look forward to see the government fortify the investments in the Artificial Intelligence sector as indicated in the interim budget, so that the benefits of AI technology can reach the masses. Priority should be laid on delivering this in the short, medium as well as long term – in order to shape the architecture of our society into a global one.”

Sudhindra Holla, Director, Axis Communications, India and SAARC commenting on the Budget 2019 have quoted: 

We believe that with the re-election of NDA government will ensure the continuity of its vision 2030 and continue the momentum on infrastructural development of highways, ports, transportation and rural connectivity. We expect more investment in Geospatial and Defence sectors, envisioning India to become the launch pad for satellites as part of Vision 2030. We look forward to seeing the Government fortify investments in the defence and border security for protecting our soldiers who are the pride and honour of the nation. Furthermore, with its flagship initiatives of Smart City and Digital India the focus on internet penetration in rural areas would help democratize AI for citizens. Priority should be laid on delivering these to augur the economy by providing a growth impetus that lays down a vision for the next 10 years.”

Gotama Gowda,  co-founder, CEO, OpenApp

“Modi 2.0 has created a lot of expectations. Although the first term was a bit of a rollercoaster, both demonetisation and GST were strong reasons behind the creation of some Unicorns in the fintech and logistics tech space. The ambitious BharatNet took a back seat in the first inning but the hope is for the new budget to make way for it to be completed this time around.

Tier I, tier II, tier III connectivity along with enhanced network capability should enable higher forms of security and surveillance. As of today, it is a broken system and the perfect network will allow for that to scale. Overall, surveillance and security will be the biggest gainer once BharatNet is a big hit, provided connectivity is given higher prominence in the budget. The govt needs to push for better infrastructure, faster rural India connectivity as the next growth wave is expected to come in from tier II and tier III cities.

That kind of infrastructure & connectivity will definitely give rise to a wave of tech stars, unlike the world has ever seen before. The startup India movement by the government provided a platform for aspiring entrepreneurs and has been a phenomenal journey for startups and angel investors alike since 2016.

This industry has seen exceptional growth so far, however, it has been coming in at a premium. Tax implication on capital infusion itself should be avoided. If the govt. continues taxing startups on their growth capital it is difficult for startups to thrive. Alternatively, the govt. can anyway tax profits from secondary sale of shares that will help startups continue to attract funds.”

Pravin Agarwala, Co-founder CEO, BetterPlace

The FM Sitharaman is known to take up challenges and deliver on it. In this new avatar, we expect the FM to address many concerns, solving which can accelerate the growth of startups in India. Since, we work in the blue collar space, our goal is help people migrate from informal to formal economy. In this respect, 3 things comes to mind,

Allocate BUdget for employment driven vocational centres: Govt should look at PPP model as a means to attract investment in setting up of world class vocational centres where youth can train and be job ready. These centres should be employment driven rather certification focused. The reason many trained people find it difficult to land a job matching their skill set is because their training is not in line with the changing industry demand. We believe the govt should allocate Budget for building such centres to increase employment opportunities. 

Policy support for Nano entrepreneurs: The PM on multiple occasions has said that even a grocery store person employing 3 people is a job creator. All of us know such nano entrepreneurs are a route to create local job opportunities as it is not possible for everyone to migrate to big cities in search of jobs. Thus, policy framework should be designed to incentivise and encourage more nano entrepreneurs to start up. Simplify the company registration process and give them tax benefits for every job they create. Such initiatives will encourage more local job opportunities as migration from villages to big cities is not a long term solution for job seekers. 

Digitization of data: Our data tells us that there are 21 lakh jobs up for grabs in the next 12 months. Having a data pipeline gives visibility and ability to plan better. The govt has access to a massive data when it comes to jobs but the job seekers don’t know where are those jobs and how to apply. With the help of govt body like NSDC, employment opportunities data should be digitized so that correct information can reach the job seekers and more people will find themselves employed. I think this should be made focus for the next 2 years. 

Bhaskar Majumdar, Managing Partner, Unicorn India Ventures

Indian Startups have come a long way over the last decade. An important partner in the growth of the ecosystem is the Indian Govt which has from time to time announced initiatives for helping startups grow fast or even shown clear preference to work with them. This Budget is an important one because it comes at a time when startups are raring to go but some policy decisions are slowing down their growth.

For starters, we expect the FM to abolish Angel Tax and reduce GST on technology goods from 18 percent to 10 percent. In 2016, the Govt announced Rs 10,000 crore FOF for the startups. We would like to see full deployment of FOF because it will empower early stage VC Funds like ours to invest more in the upcoming startup ideas. Many state govts and even the Central Govt has shown clear preference to work with startups on a no. of projects. We believe that if corporates and private enterprises are incentivised, it will open more doors of opportunity for the startups.

Earlier, it was not easy for any innovator to initiate their own startup due to some policies and financial support. But, now not only in developed countries such as USA, Canada, UK, and many others has encouraged them but also build the new policies for their initial funds.

Apparently, India has also started the Startup India Initiative which helps the innovators to build and finance their startup to help the people. This has increased the number of new innovations in India where people are now focusing on entrepreneurship. Budget 2019 will be an important consideration for the startup community in India. Future growth and a larger amount of innovation in India are not in the hands of the larger companies but it resides in the startups.

The startup community in India is growing for the last few years. The Startup India Initiative was started by the Honorable Prime Minister Narendra Modi. After that, many startups are initiated by the government to encourage entrepreneurship and employment to the people.

After their first tenure, in the second one, they are focusing on some important factors in the budget for the startups and goals to initiate 50,000 startups by the year 2024. The NDA government first Union budget will be out on the 5 July 2019. The Government focuses on the simplifying and lowering the tax rate for the innovation and startup. This will improve more opportunities for starting a new startup in India. Startup community of India is expecting some regulation to be ease.

Some people are willing to initiate their startup but they are not getting the initial funding enough they are also expecting some policies on this matter. The re-elected government have encouraged the startup community to build more startups and entrepreneurship.

Many people have also given their vision on the work. The co-founder of Rezo.AI and the Chief Data Scientist Rashi Gupta request the central government to ease the regulatory compliance procedure, make initial stage and growth capital more easily accessible for newly innovation startups.

Some taxes can cause heartburn to the startup ecosystem. The government should remove the policies and regulation that are outdated and harm the startup community. These can help many innovations to grow their startup by making some regulation and procedure ease.

Anything which will harm the startup and innovation community can hamper India’s future growth. So, the policies should be made accordingly. The compliance becomes time-consuming and costly sometimes, therefore, there should be some reduction in the regulations. The people are expecting a single window clearance from the government so that the time and cost can be saved at the same time by the innovators.

Honorable Prime Minister Narendra Modi in BJP’s pronouncement said that there will be new scheme will be introduced which will provide credit up to 50 lakhs to entrepreneurs and guaranteed credit of 50% of the loan amount for female entrepreneurs and 25% of the loan amount for male entrepreneurs.

The NDA government would create a ‘Seed Startup Fund’ of Rs 20,000 crore for the initial funding of startups. The government will be also encouraging the startups to have a playing field with other larger companies. There will the listed companies and the startup will be competing with the other larger companies for the government tenders and projects.

All in all, the budget 2019 will be beneficial for startups and innovations. Innovators are expecting the vision to make some regulations ease for them which helps in the growth of their startups.everyone is hoping that the new policies and Budget 2019 which will be announced for the startup community will help to raise the startup ecosystem.

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