​Budget 2014 – A Wish List of India’s Entrepreneurs and Small Business Owners

After his landslide victory in the recently concluded general elections, Prime Minister Narendra Modi has the expectations of an entire nation weighing down on him. Modi has promised to gradually implement some hard-hitting reforms, but the masses have pinned most of their hopes on the upcoming budget. The small business owners and entrepreneurs are no exception either. They have already made their expectations clear, and their wish list does not seem unjustified. Finance Minister Arun Jaitley, are you listening?

Small business owners want greater ease in doing business

Prime Minister Narendra Modi had promised the nation that he will mark the end of the subsidy raj and empower India by striving for self-sufficiency. One way he aims to achieve this is by creating more jobs for the youth in India. According to the 2013 Economic Survey carried out under the supervision of the-then chief economic advisor Raghuram Rajan, a staggering 87% of all the jobs in India except for those in agriculture are created by small and medium scale business owners. Yet these enterprises contribute less than 20% to the country's GDP. Clearly, the road to progress is not smooth for them.

Multiple research studies conducted through the years have pointed out to a disturbing fact. It takes around 12 different procedures spanning across 27 days and an investment that amounts to 140% of the per capita income to set up a business in India. Budding business owners in India's neighbouring countries manage to get their start-ups running after going through only seven procedures in 19 days and investing 18% of the per capita income. It is evident that starting a business in India is a daunting, time-consuming, resource-draining and complicated task.

What is more, in the absence of crowd funding and venture capitalist initiatives, small business owners find it difficult to obtain credit to start or to expand their businesses. Again the lack of infrastructure means that many small business owners end up spending their own money on creating facilities just to operate their units. In such a scenario, business owners are left with miniscule funds to make their units grow as well as to bring in profits.

So it is not surprising that small business owners and entrepreneurs in India will expect the Modi-Jaitley duo to simplify the financing process and make obtaining credit easier, reform labour laws so that they are favourable to business owners and improve the transportation, digital connectivity, education and healthcare infrastructure especially in the Tier 2 and Tier 3 cities that will make operating a business smoother and less costly.

In an interview to the media, NASSCOM president R Chandrasekhar reiterated the demands of the small and medium business owners and said that the new government should implement measures that will make the ecosystem more favourable for ‘entrepreneurs, start-ups and innovation’.

Entrepreneurs and small business owners table budget wish list

The wishes of small business owners and entrepreneurs in India and their expectations from the 2014 Budget have been voiced by NASSCOM. According to NASSCOM, there are a number of areas that the Union Budget 2014 can rectify to facilitate the development of small-scale business units.

Apart from making it easy for small business owners to obtain credit, the Modi government should also ease the tax burden and simplify the laws to provide greater opportunities to entrepreneurs to invest in their ventures, make more profit and expand. These would, in turn, lead to greater employment generation. The budget should also simplify company laws to enable easy opening, operating and closing of business units. These reforms will, for instance, resolve the problems regarding transfer pricing, imposition of royalty charges on software and tax exemption under the SEZ (special economic zone) guidelines. A simplified legal machine with standardised regulations will encourage entrepreneurs to diversify and also to shut shop and prevent wastage of resources should a venture fail to break even.

Small business owners and entrepreneurs in India expect that the budget round the corner will finally introduce the Goods and Service Tax (GST) that has been in the pipeline for several years now. If implemented, this development has been touted to become the most effective tax reform to have been put in place in India. More specifically, business owners across the board want the Modi government to cement a concrete plan to execute this taxation reform.

Entrepreneurs hope Budget 2014 will encourage and drive the use of technology

Prime Minister Narendra Modi is known as a man who is keen to adopt new tools and technology and harness their scope to better working conditions. So it is not surprising that small business owners and budding entrepreneurs wish that in the upcoming budget, Prime Minister Modi will slash broadband taxes and make Internet accessible to all. The earlier UPA government had imposed a 12% Service Tax on broadband service providers, and this had resulted in Internet becoming costlier. Entrepreneurs hope that the current BJP government will rectify this measure.

On the other hand, NASSCOM feels that theBudget 2014 should launch the technology entrepreneurship mission that takes a holistic view of the problems plaguing small business and start-up owners and prospective entrepreneurs and then formulate approaches to resolve the issues. For instance, NASSCOM has harped on creating comprehensive entrepreneurship development programs in academic institutions that will teach hopefuls how to go about bringing their ideas to fruition. Given India's talent pool, NASSCOM predicts that such a mission has the potential to create more than 50,000 technology start-ups that will employ about three million people and bring in $100 billion as annual turnover by 2020.

The wish list for the Union Budget 2014 voiced by the small business owners and entrepreneurs of India makes it evident that these segments not only want the present government to correct the ills perpetrated by the UPA government, but also adopt many bold measures that will make the business environment favourable for those who have the ideas, are willing to innovate, take risks, work hard and make an impact on the economy. Here's hoping that Narendra Modi and Arun Jaitley do not fail those who are pinning their dreams, hopes and aspirations on them.
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