Budget 2020: What startups expect from Nirmala Sitharaman’s budget 2020-21
In three days from now, India will know what finance minister Nirmala Sitharaman’s budget for the financial year 2020-21 has in it for every sector. Since it first came to power in 2014, the core area of focus for BJP-led Narendra Modi government has been a push for start-ups, which also led to the inception of ‘Startup India’ initiative in 2015.
From the budget that will be announced on February 1, startups by and large want and expect lowered personal taxes so that the disposable income is increased, meaning consumers will have more money in hand to spend, which in turn will lead to higher demand, thereby facilitating revival of the sliding economy and coming a step closer to realising the five trillion dollar economy goal.
“India continues to be the world’s fastest-growing economy, despite grim global projections in 2019 as per IMF, which also projected India’s growth rate at 7% in 2020. This bears testimony to its potential of spearheading global economic growth. Budget 2020 is, therefore, Sitharaman’s opportunity to make a difference not only to Indian but also to the global economy,” said Shrenik Gandhi, co-founder and CEO, White Rivers Media, a Mumbai-based digital marketing firm.
IF I WERE FM | What startups want from Nirmala Sitharaman in Budget 2020
According to Gandhi, the February 1 budget must enhance the net disposable income, which is directly proportional to the income tax cuts, affecting the demand for goods and services, finally snowballing into economic growth or slowdown. “Budget 2020 should, therefore, focus on expenditure boost by lowering the personal tax rates, leading to higher savings, to pump the economy,” he told hindustantimes.com.
Sonam Shah, founder and CEO of Treize Communications, a Mumbai-based communications consultancy, highlighted the need to regulate delayed payments, thus further necessitating digitisation.
“With the economy in a dry state, the government should work towards ways to instill optimism and hope amongst small businesses and entrepreneurs. Delayed payments are a big concern for all businesses, be it MSME’s or entrepreneurial ventures or big companies. The government should come up with stronger actions within the existing regulations. This will not only ensure timely tax payments but also streamline processes and rotation,” she said.
Shah also wants the government to focus on the need for more sops to encourage and empower women entrepreneurs. “With more and more women taking decision making roles and going the entrepreneurial way, more schemes and allocations should be made towards empowering women. A large number of women from low-income groups work in micro and small enterprises. If correct steps are taken, this segment has massive potential to help boost the economic growth of the country,” she added.
In an attempt to build a strong ecosystem for nurturing innovation and startups in the country, the Department for Promotion of Industry and Internal Trade (DPIIT) on January 21 also announced the constitution of ‘National Startup Advisory Council’ (NSAC) which will advise the government on measures to foster a culture of innovation across all sectors. The panel, chaired by Union commerce and industry minister Piyush Goyal, will also recommend ways to drive sustainable economic growth and generate large-scale employment opportunities.
As on December 4 last year, 23,657 DPIIT recognised startups reported 2,85,890 jobs, according to a statement released by the ministry of commerce and industry.
Last week, Reserve Bank of India Governor Shaktikanta Das called for structural reforms and more fiscal measures to revive consumption demand and the overall growth, saying the monetary policy has its own limitations to achieve these objectives, news agency PTI reported. He also batted for prioritising food processing industries, tourism, e-commerce and startups and making the domestic economy a part of the global value chain.
All eyes are now on the finance minister Nirmala Sitharaman’s budget speech in Parliament, which will reveal the allocation of funds across sectors and determine the contours of the economy in the coming fiscal year.