The Budget 2021 announced by Hon’ble Finance Minister today though positive left us wanting some more from a start-up and MSMEs perspective. That said, the budget did reflect the Indian Government’s commitment to boost the Indian start-up ecosystem.
A boost from the budget for startups is important as it carves the next phase for the start-up ecosystem post the pandemic. The government’s decision to bring in institutional investors to invest in startups is a positive move and will help encourage more investment into the start-up community. Of course, the start-up community need to see and understand the fine print.
FM has announced, registration of one-person firms with no limit to paid up capital will boost the start-up ecosystem. That helps small entrepreneurs to take the leap.
Government has doubled its expenditure allocation towards micro small and medium enterprises to Rs 15,700 crore in FY22. This is an excellent move for companies like us that work with large number of MSMEs.
Another boost offered by the government is extension of tax holiday for start-ups by one more year. This will help get startups on their feet as they grapple with cash flow and investment.
In the near future, we would want the FM to give a concrete plan on ESOP taxation and hope that the initial deliberation of a 5 year term to pay tax on ESOP is implemented and there is a rationalization.
We welcome this budget and appreciate the Government’s steps to fuel the growth of start-ups in India
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