In her third Budget, finance minister Nirmala Sitharaman announced a handful of measures that could help boost startup & MSME ecosystem in India.
The first digital Budget ever, focused on ensuring ease of doing business as she relaxed rules around setting up businesses and incentivizing funding for startups.
India's fintech sector that has seen significant growth in 2020 saw an allotment of Rs 1,500 crore for a new scheme that would push growth further and incentivize businesses to offer digital payments.
The Budget has extended social security benefits to gig and platform workers. The government will launch a portal to collect information on gig and construction workers that will help create health, housing, skill, insurance, credit, and food schemes for this workforce.
To incentivise startups, the eligibility for claiming tax holidays has been extended by a year to March 31, 2022. To boost funding to these startups the finance minister extended capital gains exemption for investment in startups by a year to March 31, 2022. This of course will apply to only those startups that hold an IMG certification.
While these were some of the key announcements, a long standing demand on the removal of double taxation on ESOPs got no mention in the Budget and neither did the finance minister offer any clarity on direct foreign listing norms for startups.
To discuss the impact of Budget 2021 on the startup ecosystem, Shereen Bhan spoke to Vishwas Patel, Chairman of Payments Council of India; Nimesh Kampani, President of LetsVenture Plus; Annanya Sarthak, co-founder & CEO of Awign and Vishal Malhotra, Partner at EY India.Watch video for more.