How Modi government has come a long way in what it promised to startups in its previous Budget

Looking from an entrepreneur’s perspective, though Modi government’s General Budget last year was better than UPA’s 2014 Budget, but it was not as spectacular as one had expected it to be. We thought BJP’s splendid victory and Modi becoming the PM would lead to some great announcements in the Budget, but on comparing it with the one before, we saw it infact lacked the lustre and extravagance that was expected out of it. Let’s say it was a tactical approach substantial enough to give a sense that the Modi government would be pro-business in the coming days. But often every ruling party tries to instill the same confidence, isn’t it? The victory lies in those who deliver on the promises they make. And in a country like India, that happens quite rarely. So who knew whether they meant what they said.

Reflecting on some key things they announced back then: Self-Employment and Talent Utilisation Program (at budgetary amount of Rs 1,000 crore to encourage cutting edge tech startups to convert ideas into business), Rs 150 crore Atal Innovation Mission (to provide Innovation Promotion Platform involving academicians, and drawing upon national and international experiences to foster a culture of innovation, research and development), MUDRA bank (refinancing all Micro-finance Institutions which are in the business of providing small business loans through a Pradhan Mantri Mudra Yojana).

They were valuable decisions, but didn’t give a WOW feeling to a sector which already felt underserved by the successive governments in the past. This is not to say that BJP’s schemes didn’t help. Mudra scheme has been reasonably successful and almost 1.73 crore entrepreneurs have availed those loans. But they had still not won the confidence of the industry.

However, if we look at the time span in which Modi-led government presented this Budget last year, we have to agree they did play it very well. For starters, these announcements instilled faith that the government wanted to push the startup sector towards growth. But the real impact was felt when Prime Minister Narendra Modi’s diplomacy and foreign trips across the world and particularly the one to the Silicon Valley became a gamechanger for India’s startup industry. He earned respect worldwide. Nobody had expected that he would emerge as a leader who would advocate for the local talent in India in front of top global CEOs and investors. And the best part was, it was all right there for everyone to see! The country watched every move he made to get the Silicon Valley experts, investors, US government and companies to see India as a future startup hub. Several startups got the opportunity to travel with him to the US.

On the 69th Republic Day, he threw another suspense saying he would soon unveil the Startup action Plan. It was to keep the vigour of the budding entrepreneurs and startups going. It was to tell them that work was on behind the doors and that something big was on its way!

Come January, and he unveiled one of the best action plan India has got from any government till now. A lot of work went behind it. BJP government secretaries and officials and their US counterparts in consultation with the startups in India and the US sat down to work out schemes and policies in favour of the startup industry in India. And then came this:

PM Modi announces mega #Startup India policy amidst wild cheering from the industry

A government which was trying to match the UPA 2014 Budget when it announced the General Budget in 2015, had now set newer standards. It was now aiming to match the global norms for startups. Could there be anything better for our young talent waiting to get wings?

No Income Tax for 3 years, No Capital Gains Tax, Faster Patent registration, clear exit policy, no inspection of startups, self-certification and one-page registration form – all this and more made for a WOW startup action plan, and now expectedly a WOW Budget. Arun Jaitley recently said a friendlier taxation system is on the anvil for entrepreneurs as a part of the Startup India action plan. “We have come up with an entrepreneurial friendly tax system and some steps can be taken through notification, while others can only be tackled through the legislative provisions that will be a part of the next finance bill in the Budget Session,” he said.

As we race towards February 29th, expectations are once again high and hopes are pinned on Mr Jaitley's Budget Speech. We hope it will go down in history as one of the best budgets and set an example for future governments while they formulate policies for this sector.