Budget 2019 and Startups
Ease Path for New Business Creation – Gaurav Jalan, Founder and CEO, mPokket
In the NDA government’s previous tenure, the startup ecosystem witnessed several key developments, especially in terms of ease of doing business. But there are many issues that remain unaddressed. As they successfully secure their second consecutive term in the office, we expect the government to further ease the path for new business creation. Regulations need to be progressive and not overly focused on risk control at the expense of innovation and experimentation. The issue of Angel Tax specifically needs to be addressed, as it is a big impediment to new business growth. We expect the government to undertake initiatives in order to give the startup ecosystem a boost, which will in turn enable startups to play a significant role in driving the country’s economic growth.
Increase Lowest Tax Bracket – Mayank Bidawatka and Aprameya Radhakrishna, Vokal
An economy grows leaps and bounds when many new people get additional spending power. We’ve seen that happen in China and the positive effects of disposable income increasing. The amount collected from income tax is very low in India. A very small % of the population pays this tax and most non-salaried people find smart ways to avoid paying this tax. Of the salaried, majority of the people paying tax are in the lower rung. As a result the have-nots get axed. Instead if we could increase the lowest tax bracket from 2.5 lakhs to 6 lakhs, that could help increase disposable income for the majority. Taxes could shift more towards consumption rather than on earnings. Even abandoning income tax for people and increasing it on luxury consumption could have a huge effect in giving a fillip to the economy. The angel tax caused a lot of heartburn in the ecosystem. While the tax was abolished, we should be careful of any policy that hurts the startup ecosystem.
Simplify Business – Abhishek Goenka, CEO and CFO, CoWrks’
The complexity of doing business remains very high. For every positive initiative taken, there has been, perhaps unintended, measures that drag down the entrepreneurial spirit. No doubt we have had a marked improvement in the rankings and that is commendable, but if there is one area that the Government really wants to focus on, it should be on simplifying business. This requires a concerted effort, a plan that includes the smallest of steps to be taken and perhaps should be done without a slogan attached to it.