There has never been a better time for startups to flourish in India. Prime Minister Narendra Modi has taken several steps to promote young entrepreneurs in the country over the past few years. As widespread technological disruption is accelerating the growth of startups across the nation, the startup ecosystem is now eyeing the Union Budget 2019 for amplified growth over the next financial year. Initiatives such as Digital India and Startup India are indicative of the fact that the government is slowly recognizing the potential of startups and framing policies that create a favorable environment for them.
While Startup India has aimed to provide multiple benefits to startups in the form of easy license clearance, tax cuts and minimum regulatory interference, there is still scope for beneficial opportunities. The startup sector plays a key role for economic growth and is a major generator of employment. With this increasing importance of the startup industry, there is an anticipation for quicker license approvals and larger allocation of funds for technological deployment.
From the Union Budget 2019, startups are expecting more streamlined methods for procedural clearance and license approvals. They are also expecting increased fund allocation towards the adoption of new technologies such as Artificial Intelligence (AI), Machine Learning, Robotics and Blockchain. The Digital India scheme’s foremost concern was to provide funding to startups looking to deploy innovative technologies through their system. This year, this expectation will turn into a reality, bolstering the growth of digital startups.
While regulatory supervision keeps a check on startups, a more flexible approach with lowered interference will largely accelerate the growth of startups. While technological deployment is on the rise, there are not enough trained professionals who can take up tech-centric jobs. This is why there must also be a significant increase in investment towards training, research and skill development in areas such as IoT, AI, Blockchain and more, since these are the prime facilitators of technological development in the country.
The digital payments sector, which is flourishing in India, has its own set of expectations from Budget 2019. Research suggests that the use of cash has returned to pre-demonetization levels, a regression that is unconducive to the growth of India as a cashless nation. As the government continues to push cashless methods of payment, the need of the hour is to incentivize digital payments in order to encourage people to continue using these methods. Levying taxes on cash based transactions will promote cashless transactions, fostering the digital ecosystem. Startups are also looking to the recently implemented Angel Tax to lay down clear cut guidelines for investors which will largely facilitate the growth of the startup sector.
Currently, startups in the payment sector are required to go through multiple stages of regulation before entering the market or introducing newer products. While this is an important compliance, a relaxation in this requirement will encourage startups to launch their products and bolster financial inclusion in India.
According to NITI Aayog, the digital payments industry to hit USD 1 trillion by 2023. To ensure that this growth is sustained, the government will have to make efforts towards laying down proper infrastructure amidst which digital payment startups can grow further. Nurturing the growth of innovative startups that are aiming to disrupt the digital payment sector need to be encouraged by the government. Startups across all industries are waiting with bated breath for the impending budget, and it is exciting to anticipate how the digital payments industry will fare this year.