National Democratic Alliance (NDA) government took several initiatives to boost the Indian start-ups in this budget 2019. Their primary goal is to achieve 5 trillion $ Indian economy by 2024. According to the budget 2019, Nirmala Sitharaman, the first woman finance minister, has taken multiple measures to bolster Indian MSMEs and start-ups.
Recently in an exclusive interview, Nirmala Sitharaman has discussed all these start-ups related issues, including the rules of foreign direct investment, the system of digital payment, electric vehicles initiatives, and so on. According to our finance minister, the start-ups can get outstanding help from a start-up run T.V programme launched by the NDA government. It’ll be broadcasted on Doordarshan.
Find out the most beneficial measures for start-ups and MSMEs.
Simplified Angel tax
Start-ups need funds, and Angel investors provide this fund to them. Previously many Angel investors, as well as start-ups, have reported about inequitable taxation system. So the government has implemented a new mechanism. According to it, the e-verification process has been simplified. If a start-up makes the necessary declaration, it will not face any further scrutiny.
The smooth functioning of taxation
Start-ups and individuals can access easy tax compliance as it’s a simplified process now. For presumptive taxation, the limit is raised. Previously it was 1 Cr. Now it is 2 Cr. Along with that, the thresholds limit for small scale businesses is 50 lakh.
Simplified KYC norms
The NDA government has decided to simplify the Know Your Customer norms for foreign investors. So now those investors who want to set up their shops in India can do it in a simplified way. It is also a step towards creating new jobs as creating a new start-up is now a seamless process.
Stand Up India Scheme
Stand Up India scheme was launched in 2016 by the NDA government. This scheme supports the marginalized segment and women of our society. It has been extended further from 2020 to 2025, according to Mrs. Sitharaman.
India cannot grow if the youth is not active. So this interim budget has taken initiatives like National Programme. This Programme is on Artificial Intelligence (AI) which will push them to use digital technology. The government has already established nine centres. These centers will help the start-ups to use cutting edge technology.
According to it, the policymakers can get excellent solutions through a digital infrastructure named the India Stack. It will solve all the complex problems. Additionally, cash transfer and data transfer can be done seamlessly without any hassle. In short, the government wants to establish a brilliant start-up ecosystem.
The other changes
2019 Budget has shown several changes on different segments, including house rental, education, and labour laws. It’ll create a direct impact on Indian start-ups.
ESOP is a segment which has been overlooked in this budget. ESOPs still face double taxation. As a result, it becomes less appealing. Double taxation is implemented at the time of allocation and redemption of the ESOPs. So the government has to simplify the policies to make this segment reliable.