Budget Reaction: Start-Ups React To Tax Incentives For Fiscal Year 2022-23

Union Finance Minister Nirmala Sitharaman has announced that tax advantages would be extended for another year, till March 31, 2023, in a big boost for entrepreneurs. Last year, the Union government extended the deadline for companies to seek tax breaks until March 31, 2022. Due to the COVID-19 outbreak, the government's tax benefits for startups for the first three years after formation have been extended for another year.

The Finance Minister went on to say that an expert group will be formed to look into and recommend ways to increase venture capital and private equity investments in start-ups. The government is attempting to establish numerous ecosystems in the areas of defense, agriculture, and finance, which is a significant undertaking.

Budget 2022 increased capital investment by 35% in order to improve seamless multimodal connectivity and logistics efficiency by broadening the scope of PM Gati Shakti's master plan for constructing 'holistic infrastructure.'

The Budget also proposes steps to assist micro, small, and medium-sized firms (MSMEs), which account for more than 30% of the country's GDP, in recovering from the epidemic. In addition, the ECLGS (Emergency Credit Line Guarantee Scheme) has been extended till March 2023, and Rs 50,000 crore has been made aside for tourism and allied industries.

Here's how Indian entrepreneurs, CEOs, and investors in the Indian start-up ecosystem responded to the Union Budget 2022.

Bhavin Turakhia, CEO and Co-Founder, Zeta

"It is encouraging to see the government's support for the startup sector in the Union Budget for 2022 through tax incentives and easing of regulatory frictions in venture capital investments. Additionally, the impetus towards the rollout of 5G and broadband services in 2022 will catalyze an entrepreneurial culture and expand India's presence on the global map of technology innovation."

Khadim Batti, CEO and Co-founder, Whatfix

The startup ecosystem has been a vital engine of development for our economy, as seen by this year's budget. The present tax advantages and other measures have been extended for another year, which is a comfort for entrepreneurs. India's startup ecosystem has been exploding, capturing the interest of venture capitalists and private equity firms. Global and domestic players invested a total of $42 billion in 2021, setting a new high.

Tanmay Kumar, CEO, Shiprocket

We welcome the government's empathy for startups by extending the term for start-ups to get tax advantages during COVID-19 by a year. The PM Gati Shakti plan's statement of 'One station, one product' will enhance the supply chain of local products. The budget has prioritized the construction of infrastructure projects that will assist India's logistics system to grow and enable us to become facilitators of an efficient logistics system. The government has placed a strong focus on the digitalization of payments, which is great news for small enterprises and aspiring entrepreneurs.