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HomeNewsStartupsUnion Budget 2023 should be a catalyst for growth in India's startup ecosystem

Union Budget 2023 should be a catalyst for growth in India’s startup ecosystem

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Union Budget 2023 has the potential to be a significant catalyst for growth and development in the startup ecosystem in India. As a founder and investor, I look forward to seeing how the government plans to support and encourage entrepreneurship.

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By Prashant Agarwal

As a startup founder and investor in India, I eagerly anticipate the and its potential impact on the country's growing startup ecosystem. One key area I hope to address is the need to incentivize employment and funding in India's services sector, which is one of the largest in the world. This could include measures such as making the deferment of tax payment on Employee Stock Option Plans (ESOPs) available to employees of more , as well as reducing the minimum alternative tax (MAT) for eligible startups to 9% from 15%.

These changes would help smaller businesses meet their daily working capital needs and allow startups to hire and retain top talent. The National Association of Software and Service Companies (Nasscom) has recently suggested that the deferment facility should be extended to employees of startups registered with the Department for Promotion of Industry and Internal Trade to give startups more options for attracting and retaining top talent.

In addition to these specific requests, the government needs to continue supporting entrepreneurship and innovation in India. This could include providing resources and funding for incubation and acceleration programs, streamlining regulations and improving the overall business environment. By creating a more conducive environment for startups, we can encourage more entrepreneurs to take the risk and build their own companies, ultimately leading to job creation and economic growth.

Another crucial area I hope to see addressed in the Union is the need to increase the angel investor pool at the seed stage for Indian startups. This is especially important for early-stage firms trying to establish credibility and move from ideation to commercialization. One potential solution could be to offer a tax relief incentive of 30% of the cost of equity shares, which could be set off against the angel investor's income tax liability for the year the investment was made.

This relief could be claimed on up to INR 1 crore invested in shares, with a maximum possible tax reduction of INR 30 lakh. By providing more incentives for angel investors to get involved in the seed stage of startup funding, we can help more companies get off the ground and start growing.

Overall, the Union has the potential to be a significant catalyst for growth and development in the startup ecosystem in India. As a founder and investor, I look forward to seeing how the government plans to support and encourage entrepreneurship and innovation in the coming year. By addressing the needs of startups and entrepreneurs, we can help drive economic growth and build a bright future for India.

The author is founder of . Views are personal.

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