From Zero To Unicorn, What Start-Ups Expect From Union Budget 2022

Union Budget 2022: Start-ups in India expect a lot of help amid the COVID-19

New Delhi:

When Prime Minister Narendra Modi launched the Start-up India campaign in 2016, the objective was to find ways to make it easier for start-ups to launch operations and flourish. It also included streamlining the process of funding and providing tax breaks. The Union Budget 2021 extended the tax benefits for ‘eligible start-ups’ till March 31 this year. Now, all eyes are on whether the government further extends this benefit or offers any other incentive to let start-ups grow into “unicorns” rapidly. Unicorns are privately held start-up companies that are valued at over $1 billion.

India has come a long way in becoming the preferred incubation centre for start-ups.

Towards the end of last year, India displaced the UK to reach the third position in the list of countries that are home to the largest number of unicorns. It added 33 unicorns in a single year.

While the initial impetus the government provided appears to be bearing fruits now, there is a need to do more to catch up with the US (which added 254 unicorns in the same period) and China (74 new start-ups), which occupy the top two positions.

Ahead of the Union Budget 2022, the micro and small enterprises that who make up a bulk of start-ups in the country hope that Finance Minister Nirmala Sitharaman will offer some incentives to help them tide over the uncertainty caused by the COVID-19 pandemic. They expect her to extend the Emergency Credit Line Guarantee Scheme, or ECLGS, introduced in May 2020 to provide small industries with unsecured loans to mitigate the impact of lockdowns.

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Micro and small enterprises hope that Finance Minister Nirmala Sitharaman will offer some incentives amid COVID-19 (File)

The education sector is seeing a massive transformation during the pandemic, with most classes going online. A great number of EdTech firms mushroomed during this period. However, the government had reduced the education budget last year to ensure adequate funds for healthcare, a necessity. This year, the sector hopes for more support from the Union Budget 2022.

Similarly, fintech firms, too, ask for a liberalised taxation regime. Some of them say quickly setting up the digital infrastructure in rural areas could be of great help to them in bringing people online and contributing to national growth targets.

The logistics sector is looking at early implementation of the National Logistics Policy, which aims at streamlining the complex sector. It is important because the average daily distance covered by a loaded goods truck in India is just about a fifth of that in the US. And on return journeys, a big chunk of them travel empty, elevating the logistics cost of goods they deliver. Quick implementation of his policy will help in boosting exports.

Prime Minister Narendra Modi recently announced that January 16 would be celebrated as National Start-up Day. While this was a welcome move to raise awareness around these small ventures fighting hard to become big, the tangible policy moves by the government would create the necessary launch pad for them to go from zero to a unicorn.



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