The Indian startup community has high expectations for the Union Budget 2024, which is scheduled to be unveiled on July 23. The BJP-led NDA government’s third term will prioritize daring actions, as noted by Prime Minister Narendra Modi, and startups are expecting for policies that would spur innovation and growth in the industry.
Key Expectations from the Budget
Indian startups are pushing for the “angel tax” to be repealed and are looking for financial advantages. Startups in their early stages think that eliminating this tax will improve capital formation and attract important investments. Startups in the health tech space are also seeking more capital to propel their industry forward.
Economic Impact of Startups
Startups are crucial drivers of economic growth, generating new jobs, innovations, and services. As of December 2023, the Department for Promotion of Industry and Internal Trade (DPIIT) identified 1,17,254 startups, which have collectively created over 12.42 lakh direct jobs. This substantial contribution underscores the importance of supporting the startup ecosystem.
Industry Voices
- Vinod K Singh, Co-Founder and CTO of Concirrus: Singh emphasized that eliminating the angel tax is essential for capital formation and attracting investments. He also called for streamlining the duty structure and reducing high tariffs on electronic inputs to bolster the startup ecosystem and drive innovation. Additionally, expanding the Fund of Funds and introducing low-interest loans would be beneficial.
- Rajiv Lamba, Co-Founder and CEO of Surveysensum: Lamba highlighted the need for technological inclusion alongside financial inclusion. He suggested a 20-25% increase in budget allocation for AI-based skill development and entrepreneurship, noting that training youth in AI is a strategic investment in the nation’s future. Lamba also emphasized incentivizing investment in AI startups and R&D initiatives to boost local innovation.
- Raja S, Founder and MD of Hearzap: Raja expressed that health tech startups are eagerly anticipating increased funding in the upcoming budget. This investment is expected to bring cutting-edge healthcare solutions to rural and underserved areas, bridging existing gaps in care. Raja emphasized that the budget aims to ensure access to essential health services, including specialized care, for all individuals in India.
- Vivhan Gulati, Director of Mediagraphics PR: Gulati highlighted that removing the angel tax would greatly benefit early-stage startups and their investors. This move 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. Gulati believes this change could significantly improve the ease of doing business and contribute to the overall growth of India’s startup ecosystem.
Historical Context and Future Outlook
Union Finance Minister Nirmala Sitharaman will present the Union Budget 2024 on July 23, marking her as the first Finance Minister to deliver seven consecutive budgets, surpassing Morarji Desai. This budget is anticipated to introduce significant measures that will shape the future of India’s startup ecosystem and drive economic growth.
The Union Budget 2024 presents a pivotal opportunity for the government to support India’s burgeoning startup ecosystem. By addressing key issues such as the angel tax and providing incentives for investments, the government can foster an environment conducive to innovation and growth. Increased funding for health tech and AI-based skill development can further propel India towards becoming a global leader in technology and healthcare.
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