Budget 2024: Startups seek removal of angel tax, incentives on investments
Budget 2024: The first budget of the BJP-led government NDA in its fresh term would be significant with Prime Minister Narendra Modi having stated earlier that the third term will be used to write new chapters of bold decisions. The budget is set to be presented on July 23.
Budget 2024: Startups in India are eagerly anticipating significant measures from the upcoming Union Budget. Early-stage startups are advocating for the elimination of angel taxes, while health tech startups are hopeful for enhanced funding allocations specifically targeted at their sector.
Startups serve as vital drivers of economic growth, contributing significantly by generating new jobs, innovations, and services. According to data from December 2023, the Department for Promotion of Industry and Internal Trade (DPIIT) had identified 1,17,254 startups. These startups have collectively created more than 12.42 lakh direct jobs, highlighting their substantial impact on the economy.
Here's what Startups seek from Budeget this year
Vinod K Singh, Co-Founder and CTO of Concirrus, expressed his expectations from the budget and said that eliminating the 'angel tax' will enhance capital formation and attract vital investments. "As the Union Budget 2024-25 approaches, we hope the government will address the pressing issue of the 'angel tax.' Eliminating this tax will enhance capital formation and attract vital investments. Streamlining the duty structure and reducing high tariffs on electronic inputs are also crucial to bolstering the startup ecosystem and driving innovation. Expanding the Fund of Funds and introducing low-interest loans would be beneficial."
Rajiv Lamba, co-founder and CEO of the AI-enabled customer feedback platform Surveysensum, emphasised that while the government has prioritised financial inclusion, it should also concentrate on technological inclusion to advance India to the next phase of growth. He said that a substantial increase of 20 to 25 per cent in budget allocation should be considered for AI-based skill development and entrepreneurship.
"By training youth in AI, the government can make a strategic investment in the nation's technological future. Given the rapidly evolving job market, a substantial increase of 20 to 25 per cent in budget allocation should be considered for AI-based skill development and entrepreneurship," he added.
Lamba also highlighted that incentivizing investment in AI startups and R&D initiatives could significantly enhance local innovation in the AI sector. He noted that the previous budget had introduced a deep tech fund of Rs 1 lakh crore with a 50-year interest-free loan period, suggesting that the government should now establish a clear and transparent mechanism for accessing this fund.
Raja S, founder and MD of Hearzap, emphasised that health tech startups are eagerly anticipating increased funding in the upcoming budget, which could lead to transformative advancements. "This critical investment is expected to extend cutting-edge healthcare solutions to rural and underserved areas, effectively bridging existing gaps in care. The upcoming budget aims to ensure that every individual in India's diverse population, regardless of age, can access essential health services, including specialised care," he added.
Vvihan Gulati, Director of Mediagraphics PR, highlighted that removing the angel tax is eagerly anticipated by startups in India. This move, according to Gulati, would greatly benefit early-stage startups and their investors. It is expected to create a more conducive environment for innovation and growth by enabling startups to attract essential capital without the burden of excessive taxation. "Such a change could substantially improve the ease of doing business and contribute significantly to the overall growth of India's startup ecosystem," Gulati added.
The Union Budget 2024 will be tabled on July 23 by Union Finance Minister Nirmala Sitharaman. With this, she will become the first Finance Minister to deliver seven consecutive budgets, surpassing Morarji Desai. She presented the interim budget on February 1 of this year.
(With ANI inputs)