Rural India and agriculture sector also get a boost
February 29, 2016: India, it seems, is all set to promote her ‘startup destination’ image — at least that is what looks from the budget speech of Union Finance Minister Arun Jaitley. Jaitley introduced a slew of measures to promote a healthy and vibrant business and startup environment in the country.
The government allocated Rs 500 crore for women entrepreneurs and the ones belonging to backward community (scheduled caste and scheduled tribes). Under its Stand Up India scheme, the government will also set up a national hub in the ministry of micro, small and medium enterprises (MSME) in partnership with industry associations to provide professional support to these entrepreneurs.
“SC and ST entrepreneurs are beginning to show considerable promise in starting and running businesses. I am happy to inform you that the Union Cabinet has approved the Stand Up India scheme to promote entrepreneurship among ST/SCs and women. Rs 500 crore has been provided for this purpose,” he said.
The scheme, he said, will facilitate at least two such projects per bank branch one in each category of entrepreneurs. The scheme is said to benefit at least 2.5 lakh entrepreneurs in this category.
He added that there has been interactions with Dalit India Chamber of Commerce and Industry on building an entrepreneurship ecosystem. This hub will provide a professional support to SC/ST entrepreneurs to fulfil the obligations under the Central government procurement policy adopted best practices and leverage the Stand Up India initiative.
The government also introduced 100% tax benefit for startups for the first three years. It has also announced steps to help startups register themselves in a day.
Vikram Oswal, founder, Woozoe, said, “When it comes to startups, in my opinion, exemption of tax from these companies for three years will provide a good boost to many startups as when a company begins to grow it needs a huge amount of financial support. With the tax exemption, a startup can look at focusing more on its growth without worrying about taxation”
Reacting to the Union Budget 2016-17, Sashi Chimala, executive vice-president, National Entrepreneurship Network, Wadhwani Foundation, said, “We are delighted to see the government recognise the importance of job creation through entrepreneurship development in India. The budget places great emphasis on training young students at thousands of colleges across India on learning the fundamentals of entrepreneurship. Every student that becomes a job creator through entrepreneurship instead of a job seeker, will make India a vibrant economy.”
Startups said the one-day registration move will allow a speedy way to setting up a venture and help them focus on building disruptive products and services. “It also good to see aspiring entrepreneurs to get access to quality education and training through various newly built colleges, schools, government ITI’s and vocation training centers through massive open online courses,” said Shashank ND, founder & CEO, Practo.
The Union budget also laid emphasis on ‘ease of doing business’.It has introduced bankruptcy resolution mechanism for financial sector entities. It has also launched single window system for custom procedure in all major ports.
Anindya Mallick, partner, Deloitte Touche Tohmatsu India LLP, lauded these steps by the government and said extending the presumptive income tax provision to SMEs up to a turnover limit of Rs 2 crores per annum is expected to reduce paperwork significantly.
The other key beneficiaries have been the agriculture sector and rural India. The government plans to double farmer’s’ income by 2022. It also aims to electrify all villages in the country by May 1, 2018.
Some other notable announcements:
> HRA deduction up from 24,000 to 60,000 per annum
> Relief of Rs 3,000 per year to taxpayers with income below Rs 5 lakh per year, 1 crore tax payers to benefit
> Deduction for rent payers raised from Rs 20,000 to Rs 60,000 to benefit those living in rented houses
> Suitable changes to be made in customs and excise duty rates to improve competitiveness and boost Make in India
> Incentives for new manufacturing companies and smaller enterprise companies
> 100% deduction for profits of undertakings from housing projects in cities during Jun’16 – Mar’19