Only a few weeks remain till the Union Budget 2025, and startups throughout the nation are once again turning to the Modi 3.0 administration to streamline policies in order to drive the growth story. Startups are looking for policies that might encourage innovation, make funds more accessible, and create a more favorable business climate as the economy exhibits both resilience and difficulties. What the Indian startup community may expect from the next budget, which Finance Minister Nirmala Sitharaman is scheduled to give to the Indian Parliament on February 1, 2025, is as follows.
Easy of doing business
Despite Prime Minister Narendra Modi's repeated claims that the ease of doing business in the country has improved during his tenure, significant impediments persist. Startups, particularly in the manufacturing sector, must jump through hoops in order to obtain a basic clearance or permission. The government may make it easier for early-stage firms by reducing compliance requirements.
Simpler Tax Regime
Aside from citizens expecting for lower personal tax rates, startups want a simpler tax framework that lowers compliance burdens. This involves extending tax breaks, lowering corporate tax rates, and streamlining procedures for deducting and carrying forward losses.
Infrastructure Development
R&D is a capital and infrastructure-intensive activity. The government should strive to strengthen its infrastructure in order to sustain investment in the area. Creating startup hubs with cutting-edge facilities, co-working spaces, and easy access to vital services can drastically lower operational expenses while also fostering innovation and growth.
Bet on emerging technology
With artificial intelligence (AI) being the buzzword, the Indian government has an opportunity to jump on the AI train and make significant progress. According to the Economic Times, the Union Budget 2025 should promote innovation and growth in the country's digital economy, which is expected to reach USD 1 trillion by 2028.
Edtech Startups Need Aid
After experiencing rapid development during the COVID-19 pandemic, edtech businesses have struggled to retain that momentum. The industry will be looking for prospective tax breaks, especially in the form of Goods and Service Tax (GST) exemptions for underprivileged students and GST reductions on educational items and services.
Intellectual Property Rights
Startups want Ms Sitharaman to provide improved assistance for Intellectual Property Rights (IPR), such as faster patent processing, lower startup fees, and more resources for IP education.
Access to Credit
Improving credit availability, particularly for MSMEs and startups, through initiatives such as the Credit Guarantee Scheme for Startups (CGSS), is critical. This would allow entrepreneurs to expand operations without the burden of high-interest loans.
