The Union Budget 2023-24, presented by Finance Minister Nirmala Sitharaman, highlighted India’s status as the third largest startup ecosystem in the world. While the budget had its hits and misses, industry leaders hoped for more initiatives to boost the startup ecosystem.
To encourage startups, the date of incorporation for tax benefits has been extended by a year until March 31, 2024. Tax incentives will now be applicable to startups within the first 10 years of incorporation, up from seven years earlier. This will give startups a longer runway to utilize their losses as they work towards profitability.
The budget also emphasized promoting startups in the agriculture sector with an agriculture accelerator fund and a digital public infrastructure for agriculture. With 54.6% of the workforce engaged in agriculture, these initiatives aim to encourage young entrepreneurs in rural areas to come up with innovative ideas for cold storages, food processing, and value addition in the sector.
The government also plans to set up a National Data Governance Policy to provide academia and startups access to anonymized data, which will be crucial for early-stage entrepreneurs to improve their growth strategies.
Additionally, three centres of excellence for artificial intelligence will be established in top educational institutions to support the objective of “Make AI for India” and “Make AI work for India.” In the modern era, this would enable young entrepreneurs to formulate better plans for expansion, market entry and establish robust and scalable business models.
Under the National Apprenticeship Promotion Scheme, the government will provide stipend support to 47 lakh youth over the next three years through a Direct Benefit Transfer mechanism. This will enable startups to attract better talent from universities, as they often hire interns for their operations.
While the Startup India program has benefitted over 80k startups to date and continues to launch new initiatives, such as the MAARG platform to find mentors, further revisions to the fiscal policy are needed to support research and development, employee stock options, capital tax exemptions, and investment acceleration.
(The writer is Co-Founder, GreenJams and Chair – Entrepreneurship, Young Indians – Vizag)