Budget 2023: Did it Live up to the Startup Ecosystem's Hopes?
Evaluating government's commitment to startup ecosystem in budget announcements
4 February 2023
Finance minister Nirmala Sitharaman recognized the crucial role of startups in India's economic development, now the 5th strongest in the world, in the 2023-2024 Budget.
The proposal of extending the benefit of carrying forward losses for startups to 10 years, easing norms was stated.
Minister Piyush Goyal says the government has supported startups since the launch of Startup India and has seen significant growth.
India has emerged as a leader in innovation and entrepreneurship with the third largest startup ecosystem in the world. The critical role played by startups in the development of the Indian economy, now the fifth strongest in the globe, has been acknowledged by the finance minister Nirmala Sitharaman in the Budget 2023-2024.
The announcement of extending the date for claiming a tax holiday by a year and increasing the benefit of carrying forward losses for startups to 10 years brought much-needed relief to the startup space. Along with this, efforts to make doing business easier, such as reducing 39,000 compliances and decriminalizing over 3,400 legal provisions, also contributed to the reprieve.
According to the Commerce and Industry Minister Piyush Goyal, the government has been a strong supporter of the startup ecosystem and since the launch of the Startup India initiative, there has been remarkable growth in the startup industry. He believes that this year's Budget will provide substantial support and aid to the startup community to ensure its continued success in the future.
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The minister emphasized that the Budget also places a strong emphasis on promoting startups in the agriculture sector, providing a boost to aspiring "agri-preneurs" to come up with innovative ideas for cold storage, food processing, and adding value to the agriculture industry.
Startups that have been granted an inter-ministerial board certificate and are recognized as such, are eligible for exemption from income tax for a period of three consecutive years out of the first ten years since their incorporation.
The Indian government has implemented several measures to boost the startup sector through the Startup India initiative. This initiative was launched in January 2016 with the goal of fostering innovation and attracting private investment in the startup ecosystem. The measures include the Fund of Funds for Startups (FFS) scheme, the Startup India Seed Fund Scheme (SISFS) and the Credit Guarantee Scheme for Startups (CGSS) aimed at providing capital support to startups at different stages of their business cycle.