Being the country with the third highest number of startups, India has a bright future ahead in regards to startups. But as Lyndon B, Johnson has said, “Nothing comes free. Nothing. Especially not good.”, It is the responsibility of the Indian government to take measures to lead the world in terms of successful startups. It looks like they have made endeavours to take initiatives by including startups in the new Union Budget.

The Union Budget, which is referred to as the annual financial statement in our constitution, is a statement giving an overview of all estimated receipts and expenditures of the government for that particular year. It releases every year and this year’s budget has also surfaced. 

The announcement of Budget 2023-24 has filled entrepreneurs with excitement as it extended the tax holiday startups have been enjoying under Startup India scheme but industry representatives openly said that these measures will apply to 1% of 84000 registered startups in the Department for Promotion of Industry and Internal Trade. 

With an aim to support and strengthen India’s startup ecosystem, Budget 2023 has also extended the date of incorporation for startups to avail tax benefits to March 31, 2024 while tax incentives will apply on startups in the first 10 years of incorporation. But there is a condition that startups are required to have a turnover of less than Rs. 100 crore. 

Also, to give financial support, the new budget has allocated Rs 30 crore for the Startup India Programme down from Rs 44.29 crore, the revised estimate of 2022-23. The share of IT ministry in allocation has increased by 40% to Rs 16,549 crore while agritech startups have also been focused. All these measures are taken to promote startups and give them a longer time to utilise the losses as no startup is profitable from the beginning. 

No opinion should be developed from one side’s perspective. Having said that, I would like to tell you that there are also some expectations Budget 2023-24 failed to fulfil. For instance, there is no mention of the rationalisation of the Inter-ministerial Board regime which is essentially required for startups to avail the benefits of Income tax Act, 1961. 

In addition, there is no change in Esop (An Employee stock ownership plan which allows employees to actively acquire stocks or ownership in the company), which has been a long-time demand of the Indian Startup ecosystem. 

Disclaimer: The purpose of this article is just stating the Facts and measures taken for the growth of startups through Budget 2023. We don’t claim to be in either favour or against it.