Here’s looking at what Indian (and one American) companies and startups have to say about Budget 2016-17:
Venture capital and advisers:
Dheeraj Jain, Managing Director, Redcliffe Capital – “The budget announcement for startups is favorable from various perspective including tax regime, amendment in Motor vehicle act to accelerate innovation in transportation sector to e-platform initiatives for the farmers.. Most investors might feel that they haven’t been incentivised for the high amount of risk they take while investing in an unlisted early stage venture…
While Jaitley had already discussed this in January, his formal announcement of 100% deduction of profits in a startup for the first 3 out 5 years is hardly practical for startups and would have limited implications on the prospects of a new venture as most new ventures focus more on growth and less on profit during the initial years.”
–Sunil Godhwani, Chairman & MD, Religare Enterprises – “The FM has done a commendable job to project a fiscal deficit ratio of 3.5% of GDP, along with a market borrowing number (Rs 4.2 trillion) significantly lower than was feared by the bond market. Focus on rural and farm sector gels well with the hypothesis that rural demand is a necessary condition to boost overall aggregate demand in the Indian economy and invigorate private investment..
Rural electrification for all by 2018, significant increase in allocation for road sector and a major jump in Railways planned investment, despite a decline in headline central govt. capital expenditure, shows that the government is focusing more on extra budgetary sources of financing of capital expenditures.”
– Ravi Kiran, co-founder, VentureNursery – “The 2016 Budget is commendable as it decouples vision and policy from financial planning.. Government’s emphasis on usage of technology in many areas – land records, educational degree certificates, agri produce procurement, new company registration and even income tax records is commendable… What’s good for the poor and the Economy cannot be bad for any business, including start-ups… While the one-day company registration, SC-ST entrepreneurship, are useful, they are not sufficient..
The budget lacks any real attempt to increase the base of angel investors and corporate angels, and introduce incentives for people to take high risks and invest in disruption and innovation.”
– Nilesh Aggarwal and Amit Sharma, co-founders of eMediNexus – “The budget’s populist orientation and the fiscal restraint demonstrated were positive… We were particularly hoping for focus on healthcare education, which is the major bottleneck to increasing the supply of healthcare provision in the country. These include freezing accreditation standards for continuing education, increased incentives for the pursuit of further medical studies, and solutions to the chronic lack of educators at medical colleges across the country.”
– Rahul Agrawal, co-founder and CEO, Mebelkart – “The development of skill development centre will create more employable talent and bridge the demand-supply gap in the ecosystem. In terms of infrastructure development, budget comes as relief and will enable e-commerce companies to have access to different markets.”
– Rakesh Deshmukh, CEO & founder of Indus OS – “The Start-Up India programme along with Digital India casted a positive halo for this potential market segment. However the short-sightedness of the key takeaways with respect to Budget 2016 can’t be overlooked. The concept of Tax Holiday fails to understand the very architecture of our business as profit is a time consuming affair and can’t be ripened within 3 years. Several novel policies of the Budget 2016 seem to adhere to the innate demands of this sector with an aim to broaden its ecosystem. However there’s a feeling that many already established start-ups have gone unheeded.”
– Sunil K Goyal, founder and CEO, YourNest – “Tax exemption for eligible start-ups for 3 years with a MAT is a sign of hesitation even in the case of highly innovative start-ups.
No relaxation on cash flow of start-ups on TDS in particular is a miss. Start-up tax is the biggest pain and the silence on start-up tax on equity funds raised at a premium is the biggest disappointment.”
– Bharat Bhardwaj, founder & chairman, TopDoctorsOnline – “The rural digitization scheme will add over 6 crore households which will be connected digitally while also educating households about digitization, this will aid technology startups widen their reach in the nation, which in turn will add to growth.”
– Vamsi Krishna, CEO and co-founder, Vedantu Innovations – “The launch of two digital literacy schemes for rural India to cover 6 crore households in the next three years, is a welcome step. As the digital literacy increases, it will potentially help the government in delivering quality education more efficiently in the rural areas. Once the basic foundation of digital literacy is laid, it will create significant scope to work towards providing access to quality education to the students in the remotest part of the country… Similarly, entrepreneurship training through MOOCs, skills-training of 1 crore youth in next 3 years and provision of Rs 1700 crore for 1500 multi-skill development centres will help create a virtuous cycle of job creation, grounds up.”
Retail and e-commerce:
Krish Iyer, President & CEO, Walmart India – “.. The government’s proposal to create e-market for our farmers through ‘Unified Agri Marketing platform’ is very bold and forward looking and will positively impact country’s farmers… Recognition of retail trade as the largest service sector employer in the country and proposed focus to simplify the regulations for retail sector is very laudable… The announcement by the finance minister to allow small & medium shops to open all seven days of the week is very encouraging.”
– Manoj Gupta, founder, Craftsvilla – “I’m happy that infrastructure has got a major emphasis in Budget 2016, with a total outlay of Rs 2,18,00 crore being earmarked for roads and railways together in FY17. All e-commerce companies will applaud the move to improve digital literacy in rural India, with clear numbers, like ‘of the 16.8 crore rural households, as many as 12 crore households do not have computers and are unlikely to have digitally literate people’.”
– Nidhi Agarwal, founder and CEO, Kaaryah – “The 3-year tax holiday, Rs 500 crore allocation for Standup India as well as easy and quick registration of startups are all steps in the right direction. However, it would have been great if contradicting provisions in the Income Tax Act and Indian Companies Act were also addressed.”
– Bhavin Turakhia – CEO and co-founder, Directi – “The deployment of Massive Open Online Courses to promote Entrepreneurship Education and Training will help Indian youth connect with mentors and credit markets. It is an encouraging move aimed at promoting entrepreneurial spirit, especially among youth from rural areas.”
Video and entertainment streaming:
– Siddhartha Roy, CEO, Hungama – “The aim to connect 6 crore households will provide a stronger reach and deeper penetration for digital and technology driven services in rural India thus allowing residents a plethora of services. Digital literacy will not only give rise to increased manpower but also boost employment generation.”
– Abhayanand Singh, founder of Muvizz – “With much emphasis being laid on making India digital, online growth is only booming. Amendment in the companies act will mean that there will be more companies coming into the business, more money flowing in, more revenue generation if they work out fine… The conditions of starting your own company may have relaxed a bit but is the environment conducive or more competitive is what we need to look at.”