Ahead of this year’s Union Budget of India that is going to be released on February 1, here’s what business leaders, entrepreneurs, investors, and all the other stakeholders from the category: Indian startup expect from the Indian government.

2021-22 Union Budget of India focuses more on startups

The upcoming budget is excepted to be more focused on the following categories-

• Creating the healthcare professionals

• Reducing the dependency on the China-based product imports

• Simplifying the taxation

• Cutting edge technologies

• Exporting technological products

• Infusing more liquidity into the system

• Providing more support to the manufacturing industries

• Boosting the rural enterprises

• Making the ways for job creation

• Improvement of the primary and preventive healthcare facilities

• Creating health communications

• Providing tax relief to the employers

• Avoiding the Covid-19 cess

• Revising the lower GST slabs for the small businessmen to give a boost to their profitability

• Granting the industry status

• Ease GST regulations

• Easy finance for the sectors etc

Let's see what is brought with the upcoming budget-

Union Budget of India 2021: In order to lift up the Indian economy, the first layout set up by the Finance Ministry is especially focusing on the scheme “Atma Nirbhar Bharat”. Finance Minister Nirmala Sitharaman said that the government had already announced the  “Atma Nirbhar Bharat” package last year in order to sustain the recovery. For this purpose, the government along with the Reserve Bank of India (RBI) had invested approx. Rs 27.1 lakh crore. About this Sitharaman mentioned this accounts for 13% of the overall GDP of our country. In this 2021 budget, there will be six main pillars shaping the government’s main focus over the course of the next year. Finance Minister Nirmala Sitaraman “The contraction in the economy is due to global pandemic and external factors and the government is prepared to support and facilitate economic reset needed. The economy will gain pace.” She said that the Government of India provided Rs 700 crore for the Micro Small Medium Enterprises sector i.e. more than the double of what it was earlier in the Budget 2021. She added that the fiscal deficit for the Financial Year of 2021-22 estimated to be 6.8 % & for 2020-21 to be 9.5%. “A scheme of mega-investment textile parks will be launched in addition to the PLI scheme,” Sitharaman said. She also talked about the 7 mega textile parks to be launched in the upcoming three years as part of the scheme. Indian Finance Minister Nirmala Sitharaman said, "Fiscal deficit in 2020-21 pegged at 9.5 percent of GDP. We would need another Rs 80,000 crores for which we would be approaching the market in these two months."

Partner, Infrastructure, Government and Healthcare Practice, KPMG in India, Mr. Vivek Agarwal said."The Government’s focus on restarting the economy is clear in its commitment to the time-tested Keynesian principle of spurring infrastructure to create jobs and channelize economy multiplier cycles. With a 5.4 lakh cr budget, there is a huge focus on strengthening infrastructure through industrial corridors, highways, BRT, railways, ports, and power especially with the highest ever allocation to MORTH.  And this promise comes with attention to detail such as a focus on PPP, special schemes for faster resolution of disputes, and a clear intention to augment infra-financing sources such as Debt-Financing institutional support which has a clear target of creating a lending portfolio of over 5 lakh cr in 3 years; and a thought-through specified Asset Monetisation (especially surplus non-core land with corporations) and Strategic Disinvestment plan, "He also added, "Parallel to infra impetus; Govt’s focus on Atmanirbharta through Performance-linked incentives, mega textile parks and an enhanced National Infra Pipeline of 7400 projects, is expected to fuel the industrial propulsion that is the clear hallmark of this budget. It’s remarkable that the Govt has also set aside incentives and measures on the private side of public infrastructure through its 3+ lakh cr scheme for discoms and subsidy to Indian shipping companies in global tenders. Overall, the budget has a positive, expansionary outlook towards the economy, and builds on the trend towards performance-based incentives started by this Government in 2014, which is again reflected in incentives for capital projects with positive progress (44000 cr to DEA) and strengthening PLI in manufacturing.”

According to the details provided by the Indian Government, The Union budget has to ensure a big boost for the startup businesses and incentivize incorporation of the one-person companies. These kinds of companies will be allowed to grow without any kind of restriction on the paid-up capital or turnover. They are also allowed to convert into any other type of company at any time as per wish. 

COVID-19 pandemic has already affected almost all the sectors but the micro small and medium enterprises or MSMEs have borne the maximum brunt. Consequently, the sector has been facing drastic and massive liquidity, over the burden of tax, very rigid compliances, and non-payment of the dues. In order to build the sector, the government plans to set about Rs 15,700 crore in the FY22. It proposes to decrease the margin money requirement from 25% to 15% for the startups. As per the Atma Nirbhar Bharat Abhiyan package, the government has also announced Rs 3 crore of emergency credit line for the Guarantee Scheme to mitigate the stress and also provide easy access to credit. This Budget provides the MSMEs and the startups to have better debt access and GST relaxation. Moving towards the next normal, the budget shows the path towards the strong economic growth of our country while building a strong workforce in the segment.