Budget should give tax exemptions to start-ups

Start-ups need certain tax exemptions in the initial couple of years along the lines of the Singapore tax exemption scheme.

Arjun Basu        Last Updated: February 23, 2015  | 21:20 IST

Arjun Basu
As the Chief Financial Officer of a start-up , I'll be following the Budget very closely to understand what the Modi government has to offer to create a positive ecosystem for entrepreneurs to grow and flourish.

Start-ups in India are largely dependent on private investments from overseas investors. Therefore, the government should make it conducive for investors to fund ideas with great potential so that a great idea does not perish only because of the lack of funding.

Start-ups need certain tax exemptions in the initial couple of years along the lines of the Singapore tax exemption scheme. This hiatus will give them a boost and help them tide over the teething problems. In fact, we have heard that many Indian start-ups have moved base to countries like Singapore because of the favourable tax regimes.

The government has created a Rs 10,000 crore start-up fund, but we need more clarity on the mechanics of how this fund will function and how it will work towards financing ventures.

Entrepreneurial investments are highly concentrated in tier I cities. If we focus on encouraging the entrepreneurial spirit in tier II and tier III cities, as well as rural areas, one would realise that we are sitting on a potential goldmine and the opportunities are endless. Besides this, as mydala is headed by a woman CEO, I'm hoping the government will launch some initiatives to encourage more women to think of entrepreneurship as a career option.

The government's 'Make in India' campaign aims to give a boost to indigenous entrepreneurial ventures. But the challenges and issues faced by start-ups need to be addressed on a fast-track basis as they can truly contribute towards boosting the economy.

The author is Co-Founder & CFO, mydala.com

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