How startup founder reacted to the Union Budget 2021


FM Nirmala Sitharaman tables the Union Budget 2021 on 2nd February. Some good announcement made by her in the Union Budget 2021.

Mix reaction from the industry leaders. Here are some reactions from the startup leaders from Pune, views expressed with indianexpress.

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Akshay Mehrotra, co-founder and CEO, Early Salary

While the budget was a consumer sentiment damper yet its focus on Atmanirbhar Bharat and the six pillars of health and wellbeing, capital and infrastructure, inclusive development, reinvigorating human capital, innovation and R&D and minimum government and maximum governance will allow more focus in internal growth and start-up community. With a clear focus on infrastructure, this will help create grass-root jobs and also min wages coming will uplift the core lower-income working population.

FDI in insurance increase and setting of Development Finance Institution will help improve financial services business in the country and similarly the higher credit to agriculture will boost the Agri economy. Healthcare shot was much needed and focus is given and similarly, primary education boost with 15000+ schools should help. Lack of additional support in tax saving instruments or tax slabs is a damper to middle-class India which is going through the pain of covid impact.

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Joji George, Co-Founder, Gonuts

Budget 2021, though positive, left us wanting some more from a startup and MSMEs perspective. The government’s decision to bring in institutional investors to invest in startups is a positive move and will encourage more investment into the start-up community. Of course, the start-up community need to see and understand the fine print. The Finance Minister has announced, registration of one-person firms with no limit to paid up capital will boost the start-up ecosystem. That helps small entrepreneurs to take the leap.The government has doubled its expenditure allocation towards micro small and medium enterprises to Rs 15,700 crore in FY22. This is an excellent move for companies like us that work with large number of MSMEs. Another boost offered by the government is extension of tax holiday for start-ups by one more year. This will help get startups on their feet as they grapple with cash flow and investment.

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Akshay Poorey, co-founder of DINGG, Queue management start-up.

Finance Minister Nirmala Sitharaman has given a New Year gift to the start-up world and its welcome move by the Government as they are shifting focus towards start-up growth by allowing incorporation of one-person companies, with no restriction in paid-up capital and turnover, help individuals without forcing to find out a co-founder and can incorporate the company alone. They revised the small company definition by raising capital base to two crores, tax holiday extended to March 2022. All this would help the start-up world to stand up faster after the pandemic effect.

Ninad Vengurlekar, Cofounder, Utter App

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The single-person company is expected to give a boost to entrepreneurs looking to set up business in India. This policy would ideally work for hi-tech innovators who can now use this policy to build licensing agreements for their innovations in India, without the need for complicated processes of setting up a company. To me, the Rs 1,500 crores dedicated for improving digital payments in India will provide a huge boost to monetisation in the entire startup ecosystem. I hope this fund focuses on enabling digital transactions rather than opening more and more digital payment accounts.

Ashutosh Gawade, Founder of tech-start-up Eadicct

Since I have been running a Private Limited One Person Company (OPC), I see a huge benefit for our start up in the coming years as there will not be any tax audit and we will still take benefits of being a Private Limited company. Most of the start ups, once they get traction and have a turn over more than one crores, focus on various compliances and audits which will be removed now. So surely a welcome step.

We are working on three domains, mainly e-mobility, healthcare and technology for defence. In all three sectors , the government has increased a budget heavily. MSME budget is more than doubled YOY, Atmanirbhar Bharat was allotted 2.23 lac crores along with defence budget and customs on automobile part import increased. All steps shall collectively pump up localisation. This will also attract investors to take risks and invest more in start-ups like us. Overall happy and optimistic with the 2021 budget. India is heading towards V- shape recovery after a sharp fall due to COVID.

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Sunanda Verma Bhatta, co-founder, Daftar

The pandemic has taken a huge toll on startups. With the slowing down of the economy and lack of funding, the sustainability of startups is a big concern. The provisions like the extension of tax holiday and exemption of capital gains will help to boost the investment in the startups. Lowering the compliance burden, reducing residency requirements, and setting up of seed fund corpus are a welcome move to encourage new startups. However, the existing startups who are struggling to stay afloat and survive don’t have much help coming from the new budget announcement.

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Malhar Katare, Co-founder, PawshBox

The Indian Start-up ecosystem is the third largest in the world. One major factor contributing to this is the various hand-holding measures provided by the government. The government has yet again simplified regulations, which proves helpful for early stage start-ups. Recently a Seed Fund Scheme of ₹945CR was also announced. This will make it easier for start-ups to receive investment.

Start-ups have been badly hit during the Covid crisis and so many are fighting to stay afloat. The capital gains exemptions and tax exemptions for another year, for eligible start-ups, will provide the necessary brace required. This support from the government will encourage an increasing number of students and young citizens to get aboard the start-up journey and in turn create more employment and create wealth.

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Anup Jain, Managing Partner, Orios Venture Partners

There is a strong focus on infra, which is key to driving India’s overall development. Also, this means a revival in the construction industry, which will have a domino effect on employment and GDP per capita. This is extremely positive. Hiking the FDI to 74 percent is a revolutionary move that opens up the insurance sector and improves access to India’s underinsured citizens. The Incorporation of one-person companies (OPCs) without any restriction on paid-up limit is a welcome move for startups as two directors were NEC at a minimum and founders were forced to co-opt others under the Companies Act. The flexibility to convert a company to any form is another welcome step to ease doing business”

Padmaja Ruparel, Founding Partner of IAN Fund

Budget 2021 opens up opportunities for startups across health, hygiene, water, clean air, sanitation, etc. The vision of Aatmanirbhar Bharat with a focus on good governance and women empowerment will lead to a boost for the Indian Economy. Indian startups have a great opportunity to innovate and help to sustain the economy. Non-conventional energy boosted with a focus on solar and Non-renewable sources.

Rajat Tandon, President, IVCA

Congratulations Hon’ble Finance Minister on several positive inclusions in the Finance Bill 2021, like, extending tax benefits to Startups, incentives on setting up of one-person companies, tax exemption to Global Funds on relocating to IFSC which echoes IVCA’s mission that is Onshoring the Offshore pool of funds, ease of compliance for REIT and InVIT, amongst others.  Based on the recent Regulatory Roundtables at Prarambh – Startup India International Summit, with domestic and global funds, chaired by Honourable Finance Minister and Commerce Minister, respectively, IVCA is hopeful that the Government of India will continue supporting the domestic and global alternative investment ecosystem, while the PE, VC asset class will continue to boost employment, grow Indian startups, scale-ups to growth companies and advance the economic growth of the country moving ahead of the pandemic.

Mihir Mehta, Senior Vice President, Ashika Capital

Allotment of a massive capital expenditure corpus in order to enhance and support national highway projects, roads, and other ancillary infrastructure shows the continued commitment of the government to strengthen connectivity across the country, which in turn will largely improve supply chain and logistics over the next few years.

Also, allotment of corpus to states and independent bodies will hopefully lead to better utilisation of funds across states and ensure that projects that require immediate attention from a financial capital perspective, are taken up on priority.

Alok Mittal, CEO and Founder, Indifi Technologies

Significant investments in the infrastructure sector is a welcome step and is likely to accelerate the revival of the economy in a sustainable fashion.

Setting up of a world-class fintech hub in GIFT City is a tremendous opportunity to provide seamless linkage for Indian fintech companies to global financial ecosystems. MSMEs have borne the brunt of COVID-linked disruptions, and more may have to be done outside of the Budget announcements to revive that key engine of India’s economy.

Kumar Abhishek, Founder-CEO, ToneTag

The support extended by the government to GIFT city is a crucial development for the Fintech ecosystem, especially startups.

The availability of customised support and tools will not only expedite the processes and development but also create an environment conducive to ideas and innovations.

Also, the investment to promote digital payment will definitely uplift and establish infrastructure throughout the country, especially in Tier-II and Tier-III cities. Fintech companies will have better access to different locations and adequate incentives for growth.

Renuka Ramnath, Founder, and CEO, Multiples Asset Management Ltd & Chairperson

The Indian Private Equity & Venture Capital Association is very heartened to see a spending heavy Budget which augurs well for the economy. This Budget comes on the heels of a series of roundtables with key stakeholders in government,  regulatory bodies, and the entire PE, VC, Startup ecosystem.

The discussions were wide-ranging and very positive.  Pleased with some of the announcements for IFSC for onshoring the offshore, startups, Infrastructure, Real-estate and the healthcare sector.

We hope we can see some benefits for the AIF industry once we read the finer points. There is consensus around doing what it takes to build a vibrant PE, VC sector. We also hope to see concrete policy changes and steps to enable this common vision.

Today, India needs at least 2.5 percent of the GDP to come in the form of PE, VC investments for the country to reach its $5 Trillion target, i.e. (Around ₹8.75 Lakh Crore or $125 Bn). Only an internationally competitive tax and regulatory environment, as well as a level playing for domestic capital – unlisted shares, will catalyse investors to look towards India.

Vikas Garg, Chief Financial Officer, Paytm

The Finance Minister has presented a balanced Budget that is aimed at maximum growth of all sectors in the coming year.

The Rs 1,500 crore proposed scheme to incentivise digital payments is a welcome move that will accelerate the growth of cashless transactions in our country. During the pandemic, digital payments emerged as one of the key enablers of empowerment at the grassroots and brought millions of people under the fold of the formal economy.

Government’s continued emphasis on increasing investment in Infrastructure, Insurance and digital payments will ensure financial inclusion of the masses.

Bhavish Aggarwal, Co-founder and CEO, Ola

Ola welcomes a progressive and growth-oriented Budget. Measures under Aatmanirbhar Mission will create global champions in automobiles, financial services and technology and foster an environment where India becomes integral to global supply chains.

Increased investment in insurance and infrastructure will open new avenues of capital. We strongly support government’s clean air focus with our EV plans that’ll accelerate the world’s transition to sustainable mobility.

Harshit Jain MD, CEO and Founder, Doceree 

This year’s Budget by Finance Minister is pragmatic, positive, and committed to the healthcare sector which needed a deliberate boost post unprecedented virus outbreak last year.

The announcement of a centrally funded scheme – Aatmanirbhar Health Yojana – with an outlay of Rs 64,180 crore over six years in addition to the National Health Mission is a welcome step towards strengthening primary, secondary and tertiary healthcare in the country.

Setting up of 15 health emergency centres shows the government’s intent to be future-ready to address any healthcare crises. It is commendable that the government has put healthcare at the forefront, putting the focus on curative and preventive health and wellbeing.

The allocation this year is likely to be around Rs 2,23,846 crore, which is a whopping over 130 percent rise from the Budget last year.

The proposals would make quality healthcare accessible and affordable, besides standardising healthcare infrastructure across the country.

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