With Mr.Arun Jaitley, the Finance Minister of India, about to present the Budget 2016 on 29th February, there is a lot of hue and cry about what does the budget have in store for the startups in India. The Start Up India, Stand Up India campaign initiated on 15th August 2015 by Prime Minister Mr.Narendra Modi, aims to encourage growth of startups in India, by providing them with redemptions and incentives. To follow up with the same, Mr.Modi also unveiled a 19-point Action Plan for startups in India, on 16th January 2016. But, initiatives can only be implemented if the Budget considers them worthy enough. Hence, budgetary allocations for startups in India are significant for their growth and establishment.
Here is our take on what are the expectations of the startups from the Budget 2016:
FUNDING- Funds are the most necessary element for the establishment, growth and success of an enterprise. The Start Up India, Stand Up India action plan laid the path on what the government should do in terms of fund allocation to startups. It’s time that the plan gets implemented. The budget this year should lay out a clear plan on fund allocation and not keep the entrepreneurs in vague. Similarly, the support that the government provides in terms of a Credit Guarantee Mechanism through National Credit Guarantee Trust Company (NCGTC) for debt-funding to startups, is of vital importance. Thus, startup enterprises in India should be provided with a mobilized credit guarantee facility in the upcoming budget.
INCUBATORS AND ACCELERATORS– Incubators and Accelerators (Programs that offer great ways to grow the business of startups in India), play a vital role in the development of startups. As, most startups in the country are the brain-child of young entrepreneurs, they need extensive guidance in growing the business. The incubators and accelerators make it possible for the startups to stand on their feet. The initiative of the government to set up 35 new incubators in existing institutions and 35 new private sector incubators with government support is significant for the startup community in India. For this program to be a bigger success there needs to be budgetary allocations for the same, so that it doesn’t remain on paper only.
EXITS & CLOSURES– With the high degree of risk involved in business enterprises, there is always a big chance for startups to face failures. Thus, in such situations, a law that allows easy winding up of the enterprises is necessary. As the Winding Up Laws of the Indian government are outdated, it’s extremely difficult for a startup to exit from the business scenario. Therefore, the government should ensure that the Bill providing easy closure of startups, get passed in the Parliament and a mention in the upcoming Budget.
DIGITAL INDIA– Apart from directly helping the startup community, there are indirect ways to help them operate in the economy. The Digital India initiative is of great help to the startup community in India. Thus, the Budget of 2016 should lay importance on the Digital India program of the government and allocate funds for this purpose.
For the growth of the startup community in India, budget allocations are the first and the most important step. Thus, let’s hope that the budget of this year turns out to be a boon for the startups in India and we get to witness some really successful business enterprises in this year.
(Source of information-The Financial Times)
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