What do Startups expect from the Budget 2016

 
In another couple of days, finance minister will be rolling out his third financial budget for the year 2016-17. A lot of the budget expectations have been addressed by the Prime Minister in the ‘Startup India, Stand Up India,’ it’s time that the budget must ‘Walk the Talk’ and clearly chalk out the implementation. We, at Dataquest, takes a sneak peak what all startups expect from the budget 2016.
AJSouter
Saptarshi Nath

Alexander Souter, Co-founder, Overcart.com

Saptarshi Nath, MD, Overcart.com

Given that the eCommerce industry is undergoing a lot of innovation and change, the government must focus on facilitating fast and transparent interactions on all the government touchpoints. For instance, marketing expenses can become a nightmare if the payment is in dollars. Signing up a new service provider requires us to file three sets of paperwork if the billing is in dollars.

Secondly, there is a need for a clear stand from the finance minister where the eCommerce industry in India stands from a legal, financial, and compliance standpoint. This is critical in terms of setting up of future legislation. Single-window approvals, streamlined documentation and ease of transactions and government payments will help the eCommerce industry maintain its peace.

Thirdly, the eCommerce industry needs more clarity on FDI policies and GST roadmap, but given its wide implications, we do expect that progress will be slow. The FM should ensure that consumer interests are foremost in any new policy developed.

 

 

mrigank, qustn technologies

Mrigank Tripathi, Founder and CEO, Qustn Technologies

Though the government has addressed many pain points recently in the start-ups action event, but, at a broad level, the expectation from the government is to move towards an overall ease of doing business and introduction of tax friendly schemes, a tax regime to promote, encourage setting up of more start-ups in the country and also assist today’s start-ups to become really valuable companies quickly. Exempting early stage investors from capital gains tax will help the investment economy tremendously. All this will infuse the relevant amount of capital needed into the ecosystem and help fuel growth.

The government should ensure that start-up founders also get some advantage of capital tax exemptions so that more people start up and it becomes easier for investment. However, in the current stage, it may not help start-ups too much especially in the build-up phase as most start-ups either lose money or make very little profits.

Finally, there should be parity across start-ups. The ‘No-inspection’ for start-ups should be applicable to anyone in the first three years of existence and not just for companies starting out post April 1.

 

 

Sridharan Sivan_Founder and CEO S10 Health

Sirdharan Sivan, Founder and CEO, S10 Health

As the Indian healthcare industry is at the cusp of innovation and change, the government in 2016’s budget, should announce concrete measures that will boost the country towards better health. There are a number of possibilities like covering issues of affordability, access and policy level changes that will propel the sector to meet the demands of the health seekers.

The government should provide healthcare infrastructure status that would help funding for specialty clinics. Moreover, the wellness programs should also be classified for medical reimbursements.

Another expectation from the budget is that the government should also work towards exempting healthcare services and products from Goods and Services Tax (GST), especially on preventive health check-ups and wellness programs.

The government should also introduce some provisions for tax benefits for healthcare startups during the formative years.

 

 

Yogesh_Agarwal_CareOnGo (3)

Yogesh Agarwal, Co- Founder, CareOnGo

With the Prime Minister focusing on ‘Start up India, Stand up India’, the budget must ‘Walk the Talk’ and clearly chalk out the implementation.

Way back in 2000, the government gave various sops to IT companies by providing IT parks with various subsidies. It is the right time for the government to facilitate the business infrastructure required for startups to work and function. These subsidies can be in the form of providing shared workplaces at lower than market rates and giving tax sops for employees to reward them for the risks they are willing to take for leaving their well settled MNC jobs to play pivotal roles in startups. This will help the startups to attract the right talent so as to build a foundation to build solid enterprises and a great talent hub.

The government must also bring clarity over issues like FDI allowance in B2C and B2B online marketplaces, retail portals, etc, thereby, easing restrictions over these. Moreover, as per the MAT guidelines, which states paying 18.5% tax even when companies are not making profits, is a strong deterrent for technology startups. This issue must be addressed with immediate attention.

Another concerning issue which should be raised in the budget is that currently there are regulations from different government bodies including those from CBDT, MEA, SEBI, RTI, etc, which makes it tough for foreign VCs to invest in private limited companies. These must be streamlined to make it easier for VCs to invest which will in turn make it easy for startups to access these funding routes.

Angel tax is still another big laggard for the investors in unlisted private companies. This must be taken off as even today there is hardly any collection of revenues through this medium by the government, since the investors turn away for such investment opportunities.

 

varun, HealthAssure

Varun Gera, CEO, HealthAssure

It is the high time for the government to have a strong roadmap for the Indian healthcare industry which includes universal health coverage, tax benefits on healthcare spends/savings by households, setting up an office for healthcare regulation to build and promote quality healthcare in the country. Though the Prime Minister announced some welcoming initiatives, now it will be important to see the successful implementation of those announcements.

For a startup, funding is the biggest problem, which can be mitigated by creating an environment conducive to investors. The announcement on capital gains for investors will boost funding and needs to be implemented soon. Additionally, starts ups enjoyed a grace period of upto 3 years for provident fund which was removed. It is important that the government reintroduces this grace period or at least incentivises the regulation in order to encourage compliance.
Startups should be exempt on deduction of TDS which chokes cashflow for upto 18 months. Currently Service Tax is payable on raising an invoice to a client whether the payment is received or not. With clients recoveries averaging 3-4 months, there is tremendous pressure on young companies from a cash flow perspective and even from a compliance point of view. Making incremental changes such as making the service tax applicable only once the company has received payment from the client can ease the pressure on start ups immensely. On another note, startups usually find it very difficult to get government contracts for public private partnerships. The Prime Minister’s recent announcements on relaxing the norms for public procurement for startups can be the shot in the arm the government needs in order to transform the current ecosystem by inviting new technologies, solutions and DNA that start ups in India offer.

 

 

aarti gill

Aarti Gill, Co-founder, FitCircle

Women entrepreneurship is recognized as an important source of economic growth. The government should encourage diversity, by giving certain tax benefits to encourage inclusion of women in startup workforce.

Secondly,funding plays a crucial role in a startups survival. Suggested provisions from the government in terms of fund-on-funds and credit guarantee mechanism should be implemented as soon as possible with proper timelines and roll out plan.

 

 

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Anish Williams, Transerv

To keep up the good work set in motion by the ‘Start Up India, Stand Up India’ initiative, the government should consolidate the alternate banking and financial transactional space in the upcoming budget as it will give digital commerce a big boost.

In the payment industry, about 90% of personal consumption payments still happens via cash. The foremost expectation from the budget is to take some concrete steps to incentivize people to make payments digitally by giving incentives in the form of tax benefits to users. This could also be addressed if the government ceases to charge convenience fee for digital payments and support companies against a cash centric ecosystem.

We are also expecting a relaxation of norms and increased ease of doing business for digital wallets. An increase in the limit of capital that wallets can handle will definitely add to the user convenience and fuel the growth of the industry. We are looking forward to a deeper, more integrated service provision in association with nationalized and private banks to further the cause of financial inclusions.

 

Read the online article here : http://www.dqindia.com/what-does-startups-expect-from-the-budget-2016/

 

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