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    HomeStartup SpotlightRemoval of Angel Tax and Allocation of Funds: Startups’ Expectations from Union...

    Removal of Angel Tax and Allocation of Funds: Startups’ Expectations from Union Budget 2024

    The Union Budget 2024 will be announced on 23 July 2024, and startups across the country are eagerly waiting to see what is in store for them. In the Interim Budget 2024, announced in February, a corpus of Rs 1 lakh crore to promote innovation by startups, coupled with a new scheme for deeptech startups in defence and an exclusive biomanufacturing scheme to supplement bio-startups and the bio-economy, were some of the measures that were announced. However, the industry is hoping for more support from the Indian Government this time.

    Also read: What COAI Expects from Union Budget 2024

    Archana Jahagirdar, founder and managing partner, Rukam Capital, said that while the Indian Government had taken significant steps to ensure the growth of startups in India, more needs to be done to support innovation. “The Indian venture capital industry plays a critical role in fuelling the country’s startup ecosystem, which is the third largest in the world and is driving India’s dynamic digital-led growth. The government has undertaken significant reforms to support the startup ecosystem in the last decade and it is important this continues with the third term of the administration,” said Jahagirdar.

    Archana Jahagirdar
    Archana Jahagirdar

    She further went on to add: “In the upcoming budget, we expect further measures for the development of the innovation landscape, India needs to continue the policy reforms and especially focus on how access to capital becomes easier. Though India now has a fair amount of domestic capital available, for the ease of doing business, the government must look for ways on how institutional capital can be unlocked and be available for startups. In particular, we think the government should look at how to encourage investment into the VC space, it’s important to see the investor-VC ecosystem in conjunction with the startup ecosystem.”

    Also read: Top Outlooks for Union Budget 2024

    She also added that a fund allocation would be required to ensure innovation in the AI space. “While programs like Startup India, Standup India, and Atal Innovation Mission are providing growing companies with vital resources such as funding, mentorship, tax benefits, and regulatory support, a significantly larger and dedicated fund allocation for emerging technologies like AI is the need of the hour to help India realize the vision of a Digital Bharat and position itself as a global tech hub. From the technology perspective, though India has witnessed a surge in AI-based startups in recent years, the lack of skilled researchers and workforce in emerging technologies is a big hindrance for startups to develop homegrown solutions. We urge the government to come up with new and innovative upskilling/reskilling initiatives for the fresh graduates entering the workforce,” she noted.

    Abhinav Jain
    Abhinav Jain

    Abhinav Jain, cofounder and CEO, Almonds AI on other hand, hopes for the removal of Angel Tax announcement in the Union Budget 2024. “In the rapidly evolving landscape of technology and innovation, startups are the engines of future economic growth. The upcoming budget presents a critical opportunity to fuel these engines, ensuring we keep pace with global advancements and lead the charge. Removing the debated ‘Angel Tax’ will significantly propel India’s ascent as a global hub of innovation and technology. Smart investments in our tech ecosystem today will shape tomorrow’s industries, creating jobs, driving innovation, and securing our position in the global digital economy,” he said. 

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