How Startups Can Find Hope In Budget 2018?

Maybe it’s not that bad? Learn how can you reap indirect benefits from Union Budget 2018.

Union budget 2018 has ushered slew of benefits on rural sector but has left the startup ecosystem aghast. Startups are pivotal part of economic growth. It brings in innovation and generates employment opportunities. At a time where startups are struggling with complex legal procedures, tax woes, the big question is that, has the budget 2018 been able to address the demands of startups. Startups expect that there should be lower compliances, more tax breaks, which in turn, should lower the financial burden of the startups.

The budget has also failed to quench the desires of startups by not extending the tax benefits or easing the compliance procedures.

This year the primary focus of the budget was only on agriculture, healthcare and infrastructure. Budget grants 100% deduction for farmer producer companies with annual turnover of Rs. 100 crore.

The budget is not as bad as it may sound. There are some indirect benefits that startups can reap. For instance, focus on agriculture sector sprouts higher scope for Agritech startups to work with the government for a common goal.

The budget has also allocated Rs. 6 lakh crore to improve the infrastructure of the country which ushers opportunities for technology and fintech companies to develop inbuilt RFID tag to create cashless tolls.The government has given Rs. 500 crore for building 5G technology. This is a mega opportunity for startups to build services of High speed network instead of focusing on low-end spectrum. Moreover, startups can also build new services for rail networks like establishing Wifi spots etc. Further, our economy is moulding into a digital economy offering multiple opportunities in the realm of artificial intelligence. Government under the NITI Aayog plans to initiate a national programme in the area of artificial intelligence. All these are new opportunities which startups can successfully tap through innovation, technology and government support.

The good news is that the government has allocated 3 lakh crore for Micro, Small and Medium Enterprises (MSME) under the MUDRA Yojana to increase the credit facility under this sector. This move will enable MSMEs to grow their business more efficiently.

Small and Medium Enterprises (SMEs) will now be able to take loans by linking it with GSTN and in turn will enable MSMEs to better manage their working capital.

In order to beef up investments in startups, the government is planning to introduce hybrid investment instruments which will have the characteristics of both equity and debt instruments. Government plans to introduce policy on hybrid instruments to attract foreign investment. The creation of special hybrid vehicles would optimise taxation for foreign investors which is an extremely welcome move.

It is a balanced budget keeping the social sector at the forefront yet unfolding surplus opportunities for new age startups.

However, this is not it. There are so many levels from here on.

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