Startups seek funds, tax benefits for faster growth
Urge Centre to create favourable ecosystem for innovation, skill development
Hyderabad: Many entrepreneurs in the city, feel that innovation in this age of digital growth and technology is going to be driven by startups rather than established companies.
So, they seek higher fund allocation and tax incentives in upcoming Union Budget to create favourable ecosystem for the uninterrupted growth of startups.
Sreenivas Tirdhala, Founder, Startup Sharks, says: "we are looking at total abolition of Minimum Alternate Tax. The current tax regime is a major reason for startups to move away from India.
Therefore, there should be changes in taxation structure for startups to stay afloat and flourish. This needs to be addressed to motivate innovation".
Lack of funds is another major hurdle for startups. "Lot of work has been carried out in creating technology business incubators and access to initial seed money.
The government should provide more quality funding for proof of concept and validation," says Prabir Mishra, Founder, Saatra Capital.
Funding from banks is yet another challenge, says Mishra, despite the presence of CGTMSE (credit guarantee fund trust for micro and small enterprises).
"Banks still have reservations on CGTMSE which provides non-collateral loan to startups. We work on social impact and agriculture sector, with direct influence on farmers and agriculture value chain.
We don't have any specific incentive or policy which could encourage more startups to enter agritech," he adds.
Along with providing funds, startups in tech domain look for free flow in working capital, which according to them is hindered by GST.
"GST and input credit mechanism needs to be modified in such a way that they do not end up blocking the much-needed working capital.
The cost of acquiring digital and technology solutions has increased with 18 per cent GST. If the GST slab for technology products and services is reduced to 12 to 15 per cent, it will boost early adopter market for startups," adds Tirdhala.
Startups providing solutions in the fintech segment demand for RBI's sandbox initiative to be implemented soon.
"Regulatory sandbox initiative needs to go live as quickly as possible as it will enable all the fintech players to develop more products in an accelerated manner.
Also, a fintech Innovation fund should be created to boost startups in this space," says Saru Tumuluri, CEO, Khosla Labs.
Edtech startups are also looking for some support from Union Budget 2019 to be presented to Parliament on July 5. "Ed tech startups have entered the skill development space.
Their scalable solutions can be launched across the country in partnership with National Skill Development Corporation to achieve the government's aim of skilling one crore youth by 2020.
For this, an increase in budgetary allocation to the Ministry of Skill Development and Entrepreneurship will allow the ministry and NSDC to onboard more training partners," says Udit Hinduja, COO, Enguru.
Startups also seek equal opportunity in terms of investments, policies, and support centres across every state and Tier 2 & 3 cities. Sathish Reddy, Co-Founder of AirFi says, "startups working in deep-tech, artificial intelligence and blockchain need tech arrangements and hubs in every State to provide services like legal, mentoring, accounting, and funding."
In the same breath, Abdur Rahman, CEO of Sky 7 Training & Consulting, urges the government to provide a level playing field with other listed companies, where startups can participate and win tenders for Central and State government projects.
The entrepreneurs that The Hans India spoke to also urged the Centre to initiate steps to fuel innovation in India, while clearing hurdles that are hampering the growth of startups.