How Budget 2018 will impact the Indian start-up ecosystem
Devika Singh February 1, 2018
Budget 2018 did not have much in the bag for the India's start-up community. However, some initiatives announced are going to be a growth driver for the space. Here are some announcements by the Finance Minister, Arun Jaitley, which will impact investments and exits:
1. No scrapping of Angel Tax
2. Boost to healthcare, agriculture, infrastructure and education
"To roll out the provisions announced for agriculture sector plus the healthcare programme, the financial technology ecosystem will come into play in a big way and many start-ups will come into play for doing that," says Sumit Jain, Partner at venture capital firm Kalaari Capital.
Increased allocation for education sector, too, is expected to give a boost to start-ups in the sector.
"The 2018 budget will provide an important thrust for established firms as well as start-ups in the ed-tech sector. Jaitley's increased emphasis on digital forms, over traditional forms of learning, is a major boon for the industry," says Minal Anand, Founder & CEO, education start-up GuruQ.
3. Digital India and other technology announcements
"The finance minister has doubled the budget for the Digital India Scheme, emerging as a major move towards assisting the nation to progress further. The second development of investment of Rs 10,000 crore for rural Wi-Fi hotspots, giving 5 crore citizens access to broadband speed internet by the deployment of 5 lakh Wi-Fi hotspots should help bring more consumers online, increasing digital consumption of services like OTT, entertainment, banking, and e-commerce. We feel that all these steps are a definite plus for the significant growth of the digital businesses in the country," says Abhesh Verma, COO, video entertainment app nexGTv.
Jain, too, thinks these initiatives are very encouraging for the start-ups.
"The finance minister talked about things like encouragement for technologies like machine learning, artificial intelligence, and block chain. They plan to encourage these technologies for widespread public use. This is actually great news, because all these tech companies are only beginning to find a market for themselves. And if the government becomes one of the key drivers and adopters of the tech companies and tech tools, it is actually going to be a great time for the ecosystem," he adds.
4. Relief for MSMEs
5. Return of Long-Term Capital Gain Tax