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Budget Announcement round the corner in few days … Below are the few startup founder expectations from budget 2020
Right now, most of our customers are in a hunker-down mode not willing to take long term bets especially in discretionary spend areas like cybersecurity. As an entrepreneur, we would be watching keenly on confidence-building measures that the government comes out with for improving the business sentiment, which should hopefully trigger the increased spend cycle.Pankit Desai, Co-founder and CEO, Sequretek
The National Skill Development Mission aims to train a workforce of over 700 million over the next 5 to 7 years. However, the country doesn’t have the learning infrastructure to handle this type of volume. As such, adaptable and inclusive learning platforms become critical to delivering against this promise. The government could offer a tax break to private organizations that are creating products and services that help millions become more skilled and therefore contribute to the country’s growth.Kavita Mehta, Founder, Caymus Technology Ventures
IT has been a major contributor to the Indian economy for over 2 decades now. However, the industry itself is undergoing a tectonic shift from service-based to product-based SaaS companies. The market opportunity for SaaS stands north of a trillion-dollar and India is well poised to emerge as the leader. It is hence imperative for the government to ensure the formation of policies that enable the software product based companies to flourish and compete with the global giants. Netcore is committed to contributing to the economy and collaborating with the government in multiple ways. As such the government needs to facilitate indigenous founders through funds and tax relaxations to decrease the excessive reliance on venture capital funds. The government can also look at funding product focussed research to build India’s competency and leverage in the long run in the SaaS space.Kalpit Jain, CEO, Netcore Solutions
‘There is a need for Tax Parity between listed and unlisted startup capital gains tax, especially for unlisted entity since, investors are always looking for a long term investment into Startups, there are always uncertainties. An equal treatment with listed entities at par will be a game changer for the industry.Anil Joshi : Founder & Managing Partner, Unicorn India Ventures
In addition, ESOP taxation challenges should also be addressed taking into account ESOP exercises where liquidity is not guaranteed but tax liability comes instantly. This is a very uncertain scenario especially when it’s an unlisted entity. The employees are liable to pay tax, considering the fact that at the time of liquidation it can be zero. When employees exercise liquidity that time it should be taxable and a fair chance to employees should be given’
“At the outset, we would like to commend the Government for the several initiatives it has so far taken to encourage and develop the Start-up ecosystem. As a three-year-old start-up, Excess2sell.com’s phenomenal growth can be attributed to the Govt.’s efforts in consolidating GST with technology, ease of doing business, taxation on start-ups and various policy initiatives. It has allowed and encouraged first-generation entrepreneurs like us to take risks and be part of a developing ecosystem for Indians who always wanted to do something on their own. We look forward to Union Budget 2020 with more focus on reforms, ease of doing business, system cleansing and easing up liquidity for honest tax-payers to spend. With the kind of thrust on technology build-up, easy tax policies and over-all opportunities, our enterprise which focuses on the B2B segment is poised to grow at an even faster rate,Mr Rajan Sharma, Founder & CEO, excess2sell.com
“MSME sector has been the backbone of the Indian economy with over ~30-40% contribution to GDP despite social, logistical and, resource-based challenges. The Indian businessman has battled the woes of Demonetization, GST implementation, Banking Crisis and Credit crunch, etc. in the past 5 years and pessimism around the system is under-represented, if at all.
The Budget 2020 should make efforts to empower the growth of MSMEs by providing them access to required credit with the help of supporting financial institutions with encouragement on data, credit guarantee, and easy documentation for availing finance along with expanding prospects of business across Sectors. Incentivization on using digital adoption by MSMEs will also be a stronger requirement while easing compliance around the same.”Manish Lunia – Co Founder of FlexiLoans.com
The government realizes the importance of new technologies like Artificial Intelligence and Machine Learning. I expect to see decisions to fuel the growth of these technologies in several domains. For example, there are a lot of start-ups doing work on use of non-traditional data sources to build better lending solutions and enabling lending to customers with little or no-access to loans. Any reforms to support and enable these start-ups can have a huge long term impact and can further differentiate India’s Banking / FinTech Industry.Mr. Kunal Jain, Founder & CEO, Analytics Vidhya
India’s economic growth has been sluggish over the last few years and the impact has been concerning. Despite India being the third largest start-up nation in the world, many ideas crumble before they flourish owing to lack of supporting infrastructure, funding, profitability, skill gaps and ecosystem hurdles. Demolishing angel tax and reducing corporate tax were commendable initiatives in reviving start-up sentiments, however, a lot more needs to be done to empower them further.
From a start-up ecosystem perspective, there is a need to promote priority lending and improve contract enforcement to aid ease of doing business. As per World Bank reports, solving commercial dispute in India takes 1,445 days, which is almost three times more than the average seen by the Organisation for Economic Co-operation and Development. Further, starting or closing a business is still a cumbersome process in our country.
From the sector perspective, government has introduced many policy level interventions in the past 2-3 years to boost the real estate sector which has a direct impact on the home designing segment. However, revival requires much more effort. There is a need to reconsider the personal tax bracket to give more liquidity to consumers, as well as better benefits under section 80C to encourage investment in real estate and home interiors segment. Furthermore, the Home interiors segment falls under 18% GST slab and we propose the government to consider this segment under 12% GST slab since interiors is no longer a ‘good to have’ item anymore. This will further increase savings for the end consumers.
Likewise, paper is crucial for making products like laminates and import duties on paper and other input materials is a concern for the home design and décor segment. To encourage ‘Make-in-India’ adoptation there is a need to contain the cost of getting quality materials from the Indian manufacturers. Until then the import duties should be re-considered.
The home decor and interiors industry in India is poised to grow and it has moved from being the sole preserve of the rich. The concept of interior designing has made rapid inroads into the booming urban Indian middle class over the last five years. This has also coincided with the share of organized retail in this space doubling from 5% to 10% in the same period. For a $20BN market with an 8% CAGR, this is significant even as these are still early days. This sector has much to do, and a lot to grow.Tanuj Choudhry, Chief Business Officer, HomeLane