This is how top startup founders reacted to budget 2020

Finance Minister Nirmala Sitharaman called startups the ‘strength of India’ as she pushed “job seekers” to turn “job creators”.

In a big move, employees at startups who have stock options will be exempt from tax if they leave the company or sell their shares in the first five years.

She proposed the tax relief given to startups. Earlier, a startup with turnover up to ₹25 crores was allowed 100% tax deduction on profits for seven years. The budget also proposed to expand it on two counts that can include older startups and those which are larger too.

Here are some top reactions:

Neelesh Talathi, CFO, Pepperfry

“The Finance Minister has been empathetic about no tax harassment, resolving litigations. Resolving credit issues, app-based working capital solutions and more strategic aspects like National Logistic Policy are all initiatives that address core issues of our MSME sector.”

“While these efforts will help boost the economy, it is imperative to arrest slippage in the Fiscal Deficit. To augur investment in our economy an aggressive disinvestment agenda, reforms including that of the government machinery etc. would have been welcome."

Mayank Kumar, Co-founder and MD of upGrad

We at upGrad believe that upskilling is the critical route to steer India towards becoming a $5 trillion economy. But I would have been happier if the Government had taken steps to encourage investment in reskilling among professionals by allowing them a tax-break privilege under Section 80C from the Income Tax Act, 1961, like that of Mutual Funds or Life Insurance."

Kunal Bahl, CEO & Co-founder, Snapdeal

“We are thankful for accepting the start-up sector's request for ESOP taxation reforms. Also, the higher time & turnover limits for carry forward of losses for start-ups will enable them to optimize growth decisions in formative years."

Overall, Budget 2020 is a thoughtful weaving together of specific proposals to tackle varied issues. Measures to improve access to finance for MSMEs and reduced taxation for the middle-income segment are welcome steps. Boosting physical infrastructure, expanding digital connectivity and growing use of technology in government functioning are important building blocks for the long-term growth of the Indian economy."

Vivek Goyal, Co-Founder, PlayShifu

"One of the core reasons behind a successful startup is the ability to hire from a very talented pool and to keep them motivated during the long and hard journey of scaling. This is the reason why startups from hubs like Silicon Valley grow up to become world-renowned and add value to society at large. The tax deferment on ESOPs will prove to be one of the significant factors and levers in motivating growth-enabling employees, a great step in helping startups in India to scale by hiring and retaining them! Reforms like these give more power to the Indian startup hub to make a mark on a global scale and contribute towards India's $5 Trillion vision by 2025."

Raghav Gupta, Managing Director, India and APAC, Coursera

“It is a progressive budget that acknowledges the role technology can play in addressing challenges and improving access to quality higher education and employment opportunities for India's youth. Government's announcements related to the development of emerging technologies like AI, ML, Data Analytics ecosystem in the country and skilling opportunities for the youth, clearly reflect the focus on preparing the youth for jobs of tomorrow."

Vamsi Krishna, CEO & Co-founder, Vedantu

“The vision of making education accessible to the farthest corner of the country will greatly benefit students. The allocation of budget to hone the skill sets of teachers and educators will positively impact quality learning and thereby provide a boost to the education sector. Additionally the allocation of budget to BharatNet will also have a deep impact on skilling rural India as it has the potential to open up online learning to students and professionals from remote villages. With better bandwidth internet, a qualified teacher located in a metro city can impart LIVE online classes to students in small town India, where there’s a dearth of quality education. Technology will soon disrupt the entire concept of the classroom and make it an extremely personalized, one to one teaching-learning experience tailored for each mind.”

Ola Mobility Institute

“The clean-air fund of Rs 4,400 crores to be provided in the form of incentives to be notified by MoEFCC should consider measures to link the incentives to the electrification of vehicles and associated infrastructure such as battery-swapping and charging."

Padmaja Ruparel, Founding Partner, IAN Fund

“The budget 2020 represents a big win for the country’s startup ecosystem. The Government has paid heed to our concerns and rolled out reforms like a 5 year tax holiday for ESOP. This positive sentiment is evident in the Government’s drive to roll out “no tax harassment” policies along with the establishment of the investment clearance cell for assisting entrepreneurs in India."

See also:
Good news for startup employees - your ESOPs won’t be taxed for five years

IKEA furniture and Jimmy Choo shoes will get costlier after budget 2020

Budget 2020: Indian education sector will now get students and funds from foreign lands