In January, Narendra Modi, Prime Minister of India had launched ‘Start-up India, Stand-up India’ initiative with the motive to take this sector to a new horizon. Clearly, this budget is in all support to the initiative.
The government has allocated Rs 500 crore corpus for its Stand-Up India scheme, which was announced in January, to stimulate innovation and start-up activity by women and SC/ST entrepreneurs. This will bolster entrepreneurship for SC/ST and as per estimates will benefit 2.5 lakh plus entrepreneurs.
Corporate tax for companies with turnover not exceeding Rs 5 crore has been reduced to 29 percent plus surcharge and cess. This is a welcome advantage in union to last year’s promise of gradual reduction of corporate tax from 30 percent to 25 percent over four years and hence will encourage more to start up.
The most positive move and certainly a thumping gift from Arun Jaitley, Finance Minister of India, is the announcement of the 100 percent tax deduction program for three years over a period of five years for start-ups approved FY2019 under the ‘Start-up India, Stand-up India’ scheme. This move is going to spark a new energy in the start-up sector of the country as it is expected to raise US $700 million and will generate around 5000 jobs in the next 12 months.
Also, an amendment in The Companies Act as proposed in the budget will allow start-ups to be registered in a day; will be huge relief. Earlier the registration used to take more than a month which was quite taxing. The icing on the cake is the support from The Reserve Bank of India (RBI) giving some positive indications that it will be easing out few foreign investment norms to back up the start-up sector of this country.
Overall this is a balanced growth oriented budget with focus on accelerating on the fundamentals.
