This year the Union budget is highly anticipated, as it's expected to be the best in comparison to the previous years' budgets and will help in gearing up the current economic slowdownof the Indian market. Although Arun Jaitey, our Finance Minister has already announced a three year income tax moratorium on the profit of the start-up companies; the real hitch lies in the levy of the service tax. The added cess this year will result in a drastic impact on the profit ratio and is a matter of concern for the economy. On the flip side, the idea of encouraging start-up firms to procure business ventures with less expenditure and low percentile of business loans is an aspect that many are looking forward to.
Every year a new budget is announced, and it becomes very important for the low profit making companies to plunge in and comeface-to-face with reality. The year 2017 however, is being eagerly awaited by the start-up community as firstly, it's being announced early and secondly, it's believed to boost the growth of the start-up ecosystem; that will help the budding entities thrive and give their share to the economy.
Few of the expectations that I hope form, an integral part of the Budget this year:
1. High rise funds to be allocated for infrastructure
Technology and infrastructure have always been a road map for the growth of the country. With better means of communication and technology, more exposure can be given to the backward regions of the country where there is no growth since many years. The growth of India lies more in the village areas as they are still deprived of basic necessities in the continually dynamic world. Transportation, too, needs amendments in terms of new inventionsand innovations to deal with the growing needs of mobility.
2. Start-up entrepreneurship
The budget this year should also cater to increased start-up entrepreneurship programs held for new ventures; which would help them in procuring loans, assisting with required infrastructure and educating them on taxation policies. New business leaders are very keen on adapting to new technologies and steering India ahead with their contributions. Therefore, a perfect start-up environment with helpful incubator setups will help newly formed ventures achieve new heights.
3. Effective tax utilization
As per data disclosed by the Government for the assessment year 2012-13, taxpayers account for just above 1 per cent of India's population and the tax outgo was over Rs 1 crore for around 5,430 individuals of the total population of around 123 crore in India. Hence, it became a tedious task for the government to allocate funds for the well being of the residents. Again due to corruption, the backward people were deprived of the benefits of tax collection. Allocating adequate tax funds to the correct category is also a requirement from the government towards making India grow.
4. Simple tax returns:
With added cess every half year, under the regime of Prime Minister Narendra Modi, the start-up community is facing tremendous pressure with the tax regulations. Young entrepreneurs are bold and dynamic but the change in tax return policies have brought along added stress and addedtime consumption with respect to effective management of profits.
5. Implementing GST
Start-up firms are very eager for the newly announced, GST implementation as it would ease the requirement of documentation and reduce the cost of interstate transport. Apart from this, unified tax slabs would be introduced forhassle free tax payments. Most of the firms do not want to establish their businesses in India due to extreme complexity in taxation. They would rather prefer to setup factories in Bangladesh; for instance, the clothing manufacturers. We have also seen that the Australian Government has earned higher revenues with the implementation ofGST, India needs to replicate the same.
The government has further realised that only way employment can be generated is to empower the youth and the start-up entrepreneurs. Bringing a threshold of innovative business models, these bold, young minds have dynamic ideas which can build entities and help in the growth of GDP.
(The author is Founder and CEO, Mobclixs Technologies Pvt. Ltd)