There was a significant focus on startups in this year’s budget, with the finance minister Arun Jaitley proposing several measures to promote entrepreneurship in the country.
While the specific details of these initiatives are yet to be known, here’s a list of measures announced by Jaitley in his budget speech earlier today:
– ₹10,000 crore Startup fund: Proposal to establish a ₹10,000 crore fund to attract private capital by providing equity, quasi equity, soft loans and other risk capital for startups.
– Rural Entrepreneurship: A proposal to setup a “Startup Village Entrepreneurship programme” to encourage rural youth to take up local entrepreneurship programs. An initial sum of ₹100 crore has been provided for this programme.
– Special focus will be on supporting software product startups. There is no clarity on what this means to startups but it is part of a pan-India programmed dubbed as “Digital India” which will ensure broadband connectivity at village level, improved access to services through IT enabled platforms and increased indigenous production of IT hardware and software for exports and better domestic availability. A sum of ₹500 crore is being provided for this programmme.
– A ₹200 crore fund has been proposed to establish a technology centre network which will promote innovation, entrepreneurship and and agro-industry.
– Entrepreneur friendly legal bankruptcy framework will be developed for SMEs to enable easy exit. While there are no specifics on this yet, we feel this is a good move, since it will enable more entrepreneurs to experiment with their ideas and shut shop if it doesn’t work.
– A nationwide “District level Incubation and Accelerator Programme” would be taken up for incubation of new ideas and providing necessary support to accelerate entrepreneurship.
– A sum of ₹200 crore has been set aside to provide credit enhancement facility to young start up entrepreneurs from Scheduled Castes who aspire to be part of the neo-middle class. This will be operationalised through a scheme by IFCI.
– FDI in Insurance is being increased to 49%. This will benefit companies like policybazaar.com, which was affected by the 26% limit for online aggregators.
– No FDI in e-commerce yet. More on that here
– The definition of MSME will be reviewed to provide for a higher capital ceiling.
Our Budget 2014-15 coverage
– Budget 2014-15 Live: The Digital Industry updates: Rs 10,000 Crore Startup fund, FDI In Insurance, E-commerce platforms
– Online and Mobile advertising back under service tax regime in India
– No FDI in E-commerce yet
– Indian Govt looking to setup virtual classrooms & online courses