Union Budget is scheduled to be announced on 1st February, 2017. We went ahead and contacted 15 startups in various industries to know what they are expecting from this upcoming budget. Below are their expectations
Swati Bhargava, Co-founder, CashKaro.com – “I personally expect the upcoming Union Budget to be very positive and favourable towards the poor, middle class and business community, particularly because these segments were most inconvenienced by Demonetization. In a bid to alleviate this pain, we can expect incentives on direct tax. This could mean lower personal income tax rates and lower corporate tax rates too. With Cashless economy taking center stage, the Government has already taken a number of steps to encourage electronic payments. We could see Finance Minister, Arun Jaitley announcing a list of measures as incentives for digital payments which will benefit the e-commerce industry as a whole. We might also get clarity on the long standing topic of introducing GST. Prime Minister Narendra Modi’s flagship project, Startup India might get a push in the upcoming Budget. We could see a new set of tax concessions on employee stock options, unlisted securities and convertible instruments. Lastly, as a woman and an entrepreneur, I would be most excited to see increased allocation towards building infrastructure in India and increased planned public expenditure. This would go a long way in creating a safer & more conducive environment for women and furthermore in creating world class companies. Overall, as a taxpayer and a founder I am eagerly waiting for February 1.”
Varun Rathi, COO & Co-founder of Happay – “10% tax rebate on incremental earnings year over year in digital forms for all SMEs. Enable digitization and payment via credit/debit card for all government fees and payments, taxes, penalties. This will result in huge adoption. Remove fuel surcharge of 2.5%. Working Capital / SME loans at 1% lower rates based on the amount of digital acceptance.”
Vinamra Pandiya, CEO and Founder, Qtrove.com – “We are very keen about the 2017 budget and are excited about Mr. Jaitley’s announcement of the same on 1st Feb. As an e commerce startup, we look forward to receiving some more clarity for FDI in B2C e-commerce through an automatic route. We also hope for a provision of enabling marketplaces to give a discount from their side. Besides this, we are also expecting relaxation of the rule of ‘not more than 25% of the business coming from one vendor for marketplaces.’ And lastly, I feel quite a lot of entrepreneurs are awaiting the implementation of GST at the earliest to enable cross state logistics with minimum constraints and friction.”
Vivek Mathur, CEO, Giftease Technologies Pvt. Ltd : “The current financial year has seen some landmark reforms, which should help boost tax collection. Hence, there are strong expectations of a significant cut in income taxes, for both corporates & individuals. Overall, consumption has been severely impacted in the last couple of months, and firm steps to boost consumption & improve consumer sentiment, are crucial for the retail & ecommerce sectors”.
Rohit Chawla, CEO and Co – Founder, The Man Company – “The last couple of months have definitely created an impact for most ecommerce and FMCG brands selling online. In this budget, we are expecting the government to take steps that will boost consumption and sales. How the government goes about digitisation of the economy will be interesting to know. We hope that there are provisions that encourage digital payments over cash transactions. We are also expecting a smooth execution of GST.”
Abhimanyu Bhosale, Co – Founder, CEO at Livehealth –“The year started amidst the wave of demonetization and we are anticipating effective execution of the roadmaps laid by the Modi movement. Clear and measurable timelines is what is most important. Supportive financial systems and an uncomplicated process in getting clearances along with the provision of tax are some of the key expectations for the startup ecosystem to thrive and boom in the country. The interesting thing to look forward for this budget would be, how the government promotes and incentivise electronic payments to minimize economic slowdown as much as possible. We are hopeful that the government promotes authentication of e-based payments, where the entire process from signup, authentication and transfer is smooth, simple and secure. We are hopeful that the union budget 2017 will be positive for the entire startup ecosystem.”
Ashwani Rathore, CEO and Co – Founder, SpiderG – “As a startup we face various tax and regulatory issues and I am hoping that this union budget will address some of these issues. Last financial year was tough for Indian startup ecosystem and to make the situation better Employee Stock ownership (ESOP) plans for the startups should be taxed at the time of sale which would help in paying their taxes as they would have greater liquidity and the instruments could also get a fair valuation. Government should announce a series of initiatives to support the startups, including widening of the tax-free regime to five years from three years and faster procedural clearances. Such announcements will boost our honorable PM’s Startup India movement. I am also expecting some announcements at the backdrop of demonetization to promote the digital economy where online payment transaction charges would be reduced.”
Harshil Mathur co-founder and CEO of Razorpay – “With India moving towards becoming a less-cash economy, there are a lot of expectations from the payment industry, the key expectation being complete exemption of service tax. The existing waiver of 15% of service tax on digital transactions up to Rs 2,000 does not encourage universal acceptance of the online payment ecosystem. I expect that the 2017 Budget will completely exempt service tax from transaction fee in digital payments. This will help bring down the cost of products & services, leading to more merchants doing business digitally, thereby promoting online commerce and boost financial inclusion in India.”
Dr Shikha Sharma, Founder, Dr. Shikha’s NutriHealth – “Government should look at the preventive healthcare with a long term view of building the nation . For example – introduce/extend the Tax Holiday Deduction (Under Section 80) to newly setup Wellness & Health Industry as it has given to other sectors like Hotel & Convention, Developing SEZ and promoting & construction of Housing Projects etc. Under this deduction Government should relax the newly setup company(Wellness & Health Industry) from paying tax for few years so that the Industry gets a boost and more and more startups come into this field .
– Special Income Tax rates , should be put into effect for wellness & health industry which are more aligned to the Healthcare sector .
– As we are moving towards GST, so under GST ACT the tax rate (Indirect Tax) on wellness & health industry should be minimum so the cost to End Consumer will be less and the middle class also gets into preventive healthcare mindset .
– Preventive healthcare should not be equated with the Luxury Industry , because health is not a Luxury but a necessity
– Government should encourage low Cost Tele- Medicine and Tele-Healthcare models”
Ms Jyotsna Pattabiraman, Founder and CEO, Grow Fit –“I expect the Union Budget to take cognisance of the tremendous economic cost of lifestyle disease, which falls disproportionately on middle-class families. As lifestyle disease primarily affects working adults, India faces an economic burden of almost 12 million years of productive life lost. The Union Budget must allow for tax relief not just on treating disease but also place emphasis on preventing lifestyle disease. Incentivising the use of disease prevention programs like regular health checks or nutritional counselling will go a long way in improving the quality of life for Indians everywhere.
Mr Prakash Rengarajan, Co-Founder and CEO, HelloClass –“Technology is revolutionizing all sectors. With such change happening particularly in sectors related to automation and AI, employment in traditional sectors like manufacturing, IT, and BPO is going to go down. Every year, millions of professionals enter the workforce and there is a spurt in new models of work based on specific skills which can be done as independent gigs. New companies are also emerging that use technology to connect consumers to the providers of these services. This is the time to bring about a change in the traditional regulations and the taxation structure which are only true for a traditional company employing full time professionals. The same rules may result in certain grey areas for the new age companies and a suboptimal experience for consumers and service providers. Given this scenario, the union budget should have specific provisions that clarify some of these grey areas as well as lay the regulatory foundation for this new era of work that lets these new age companies thrive and not be bogged down by regulations.”
Amit Sharma and Nilesh Aggarwal, Co-Founders, eMediNexus –“After a rattling year for startups and unique macro level intervention towards the end of the year via remonetisation, the startup community is eagerly awaiting a resumption of focus on entrepreneurship in the Union Budget 2017. Early signals of upcoming tax concessions on ESOPs, convertible instruments, and unlisted securities are highly welcome. The regulatory backdrop of healthcare legislation (the impending National Medical Commission and Medical Devices Regulation Bill for instance) is an area where further formalisation would bring the healthcare sector out of uncertainty. Health technology would benefit from a greater push on the healthcare supply side to digitise in addition to standards for areas outside of Electronic Medical Records. Also ecosystem support via greater academic investment, incubation support, low cost debt funding, and international partnerships would significantly bolster the fortunes of entrepreneurs in India in 2017.”
Vikalp Jain, President and Co-Founder, Acadgild – “The startup community is in much anticipation of the upcoming budget. The previous year saw a rough patch but this year, the expectations from many possible feel-good features in the budget to be presented are very high. Established organizations and startups alike would want to see a series of favorable policies this year. The initiatives taken by the government so far for skilling are commendable. However, very little has been done in terms of incentives for start-ups in the ed-tech space. It would be appreciable to see some good measures taken in this space. Things like service tax waiver, easier NSDC accreditation process, allowing subscription based payments will really help. It remains to be seen how this budget will favour ed-tech startups like ours which aim to bring accessible, affordable, engaging, and highly effective quality education to the world.”
Joint quote by Mr Rekuram Varadharaj, Co-founder and COO and Mr Krishna Ulagaratchagan, Co-founder and CEO, healthi – “With the new financial year gearing up, there are rising expectations from the upcoming union budget. Many schemes and policies were rolled out
last year to better equip the healthcare sector in India. This sector is undoubtedly witnessing tremendous changes and progress, be it providing access to healthcare in remotest areas or going digital.
This year, the budget will likely focus on improving livelihoods and at putting more money in the hands of the citizens. Given the focus on increasing money flow, the government would also do well to provision for increasing healthcare expenses. Healthcare expenses are rising at twice the rate of inflation and 70% of healthcare expenses in India are out of pocket, thus taking an increasing bite from people’s finances.
Keeping these in mind, the budget should focus on increasing the exemption on account of medical reimbursement, which should be, to say the least, doubled.
In addition, India is unfortunately burdened with rising chronic disease incidence for diabetes, heart disease, hypertension and cancer. The number of people suffering from chronic diseases is set to double in India by 2020, according to research. Deductions for spend related to preventive health checks, which are an important tool to detect risk of chronic disease early, have been capped at a maximum of Rs. 5000 per family for a long time. In addition, this provision is itself part of the Section 80D deduction for insurance premium and preventive health which is capped at Rs. 25,000.
To encourage families to prevent chronic diseases and to account for rising costs, the government should at least double the deduction available for preventive health checks to Rs. 10,000 per family and increase the Section 80D limits accordingly.”
Mayank Bhangadia. Cofounder and CEO Roposo – “Taxing start-ups at early stages of investments has put a limitation to their performance and morale. Startups are a very risky proposition wherein only less than 1% actually manage to become successful. Angel funding is the very first resource, the very first encouragement for a start-up, and tax levied on the same acts like a major deterrent to the growth of many novel ideas. With the new budget, early stage investors should definitely be protected against archaic policy measures like the angel tax – which should be completely done away with. Also, the government should help startups in reducing their cost in the early years rather than offering tax holidays for the first three years because most startups don’t make profits in their early years. For example, , lowering income tax slabs for startup employees should immensely help startups reduce their cost. This year, we look forward to some significant tax exemptions, that would give a great boost to all existing and upcoming Indian startups.”
From Entrepreneurs to Wannapreneurs, Technopreneurs, and Socialpreneurs every one is attending Xelerate India 2017 Register Here to attend the event.