The host of incentives announced in the Union Budget 2019 by Finance Minister Nirmala Sitharaman pitched for the Centre’s goal of setting up 50,000 startups in 5 years. The Budget proposes a slew of enhancement for startups and MSME sectors that had been reeling under multi-pronged challenges.
Amongst the initiatives, the withdrawal of angel tax scrutiny for startups and their investors who file requisite declarations has found resonance among the startup ecosystem. Many startups had raised concerns over angel tax in the past, and its removal is expected to give an impetus to the growth of the startup industry. Extension of the deadline for investments made by selling off residential properties by two years and exemption of scrutiny of valuation of shares are some of the steps that would see more investments into Indian startups.
The proposal to start a dedicated TV channel under Doordarshan bouquet for startups to disseminate information in the industry is another measure that would give startups a higher profile. The channel will bring together startups, venture capitalists and funding planning on one platform. In a major boost to thousands of startups, the ‘Stand up India’ scheme launched in 2016 will be further extended during the period between 2020–2025.
To help the youth secure high-paying jobs and address the severe skill shortage, the Budget envisages giving training in newer areas like artificial intelligence, big data and robotics, IoT and 3-D printing. The government is easing foreign direct investment rules into startup segments like grocery, e-commerce and food delivery. The budgetary allocation to flagship schemes for women has also seen a rise this year. To further encourage women entrepreneurship, Women SHG Interest Subvention Programme will be expanded to all districts in India. The Budget proposes an overdraft of Rs 5,000 for every verified women SHG member having a Jan-Dhan Bank Account. One woman in every SHG will also be made eligible for a loan up to Rs 1 lakh under the MUDRA scheme.
The government has also allowed 100% FDI in single-brand retail and proposed removing the 30% local sourcing norms. In an effort to make positive structural changes, NRI investment in the country will be made much easier by merging NRI portfolio route with foreign portfolio investment. . The government also aims to develop 75,000 skilled entrepreneurs in agro-rural industries. Under ASPIRE, 80 livelihood business incubators and 20 technology business incubators will be set up in 2019-20.