IT and Startups: Budget Expectations 2019

 

Bring down GST rates across the board for startups

Srividya Kannan, Founder , Director - Avaali Solutions Pvt Ltd.Srividya Kannan, Avaali Solutions Pvt Ltd.

I’m sure the startup community is all eyes and ears to Budget 2019 – there is a lot expected to further boost the
startup ecosystem. There is an ongoing rationalizing happening on GST rates – it would be a key requirement to bring down the GST rates across the board for startups. Also, having policies around different classes of equities will really help founders maintain control of the company. Again, tax sops by extending the tax holiday window further to about 7 years will support startups. Like the CGTMSE scheme, allocating government funds to startups focusing on emerging and innovative technologies will further propel innovation via this sector. Startup funds and investors should have level playing field with other asset classes, more particularly listed companies.

In terms of personal income tax, reducing the maximum tax slab to 25% and allowing exemption for medical expenses and transportation allowance will support the employed class. Again, in the interest of boosting the start-up sector, tax on ESOP’s should be levied at the liquidity event and not at the time of exercise.

Startup investments need to be incentivized

Aprameya Radhakrishna-co-founder-VokalAprameya Radhakrishna, Voka

Startups are looking forward to abolish the so called ‘angel tax’ forever. It’s been a problem for both investors and startups. I am both a startup founder as well as an investor in startups. For most angels, investing is a way of paying it forward. However, you don’t want the hassle of going through some scrutiny just for investing a small amount in a startup.

As a startup, we don’t expect the government to tax us for having raised angel investment. Startups are employment generators. Startup investments need to be incentivized.

On the one side the government is trying to protect local businesses when it doesn’t allow FDI in multi brand retail but on the other hand they are discouraging local businesses and investors by levying startup / angel tax.

I hope the government removes the startup tax in all forms from the budget. There should be no ambiguity / subjectivity when looking at funds raised by startups. The onus is on the government to find ways to separate the few questionable transactions from the thousands of genuine startups.

We expect boost for nanotechnology start-ups by setting up grant schemes

Akshay Singhal, Founder Log 9 MaterialsAkshay Singhal, Log 9 materials

Electric mobility is extremely important for India however the adoption has been rather slow due to high cost of vehicles and challenges with daily use. This high cost is primarily driven by imports of technology and components for these vehicles. India needs to develop its own indigenous technologies which are better suited for the Indian ecosystem. Current Li-Ion technology for electric vehicles is a big strategic disadvantage for India as it does not have any reserves of Lithium or cobalt. Hence, today instead of being dependent on imports for petroleum, India is headed towards dependence on other nations for Lithium and cobalt in future. It is commendable that significant steps have been taken towards indigenous manufacturing of li-ion batteries in India, but it is vital from strategic standpoint to stress and allocate funds for indigenous development of energy technologies better suited for the Indian climate and ecosystem. One such technology is Aluminium-air batteries which not only gives you long driving range without the need for huge charging infrastructure but is also powered by Aluminium. India is the third largest producer of Aluminium in the world. Further, it is our expectation that nanotechnology is given boost by setting up grant schemes for start-ups which are coming up with innovative technologies for future readiness.