The first budget of Modi 2.0 government will be presented today by Finance Minister Nirmala Sitharaman. In a bid to rev up the economy, the government might enhance the Start-Up fund in the Budget 2019-20.
Finance Minister Nirmala Sitharaman is expected to make favourable announcements for the enhancement of the fund to Rs 20,000 crore, some highly-placed sources said.
The Start-up India programme had created the 'Fund of Funds for Startups (FFS)' with a corpus of Rs 10,000 crore to provide support for Start-ups, over a period of XIV and XV Finance commission cycles.
In June 2016, the Union Cabinet had approved the setting up of the fund, which is managed by Small Industries Bank of India (SIDBI).
The fund also contributes to the corpus of Alternate Investment funds (AIFs) for investing in equity and equity-linked instruments of various start-ups.
The importance of the segment was also highlighted in the Economic Survey which was presented on Thursday.
It recommended that the government rationalise the tax policy and its implementation for start-ups to foster innovative investments in the Indian economy.
According to the survey, capital gains tax can have significant economic consequences for individual investors in terms of its lock-in effects and associated deterring incentives to use capital gains into riskier investments.
A Startup India status report for 2018 says the Startup India hub, set up to “resolve queries and provide handholding support” to startups, claims to have handled about 1.14 lakh queries.
Nearly 2.3 lakh applications were received for an interactive online learning and development module.
Other than this, more than 5000 schools have been identified to set up tinkering labs under the Atal Innovation Mission. A total of ₹54 crore has been disbursed to 22 institutes to set up incubation centres.
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Meanwhile, the government too is setting up 8 research parks for the promotion of industry-academia partnership, which will cost Rs 600 crore.
As many as 4,257 startups have benefited under the Startups Intellectual Property Protection Scheme, availing rebates on patent and trademark filing fees.
One of the key points of concern for the government should be the shortage of employment opportunities. The country is at an all-time low as far as the jobs are concerned.
The government has been on the target as it has failed terribly in providing enough jobs. Therefore, the government might take some major steps by focussing more on the labour intensive industries, which will create more jobs in the country.
According to a recent NASSCOM-Zinnov report, India has emerged as the third biggest startup hub in the world and received total funding of $4.3 billion in 2018. Indian startups have created over 40,000 jobs during the same period and many are also expanding into foreign markets.
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