Hey Startups! Look What Rahul Gandhi Has For You?

If elected to power in 2024, the Congress party has pledged to eliminate the Angel Tax for startups. In its manifesto, known as Nyay Patra, the party promises to eradicate not only the Angel Tax but also 'all other exploitative tax schemes that inhibit investment in new micro, small companies, and innovative startups.

“We will eliminate “Angel tax” and all other exploitative tax schemes that inhibit investment in new micro, small companies and innovative start-ups,” Congress said in its Election Manifesto for 2024.  

However, it is interesting to note that Angel Tax was introduced in 2012 by the UPA government aimed at detecting money laundering practices and catching bogus startups.

Taking a jibe, Commerce and Industry Minister Piyush Goyal last week said that the “the angel tax was introduced because fly-by-night entities were using this route to inflate value and create capital”. 

“There was a time when fly-by-night companies were being used for Hawala transactions or for creating capital. "They created a company and issued shares at inflated values and created capital. That was the reason that (angel) tax was brought in to ensure valuation norms," Goyal said.

Congress' 'Nyay Patra' (Manifesto) for 2024 Lok Sabha Elections

Congress unveiled its manifesto for the forthcoming Lok Sabha polls on April 8. Spearheaded by party chief Mallikarjun Kharge, alongside former presidents Sonia Gandhi and Rahul Gandhi, the Manifesto outline its 'five pillars’ focusing on 'Youth Justice', 'Gender Justice', 'Farmers' Justice', 'Workers' Justice', and 'Equity Justice'. It also incorporates the party's electoral pledges for the upcoming Lok Sabha elections.

The 2024 Lok Sabha elections will be held in seven phases starting on April 19 and concluding on June 1. 

With only few days to go for polling for the first phase of the Lok Sabha elections, political parties are conducting several rallies across India to win votes and making promises to woo the voters.

 Startup Ecosystems in Congress Ruled States

 Currently, INC is in power in the three states of Himachal Pradesh, Karnataka and Telangana.

It must be noted that Karnataka has one of the most mature startup ecosystems with around 15000+ startups and was the first State in the country to announce a dedicated Startup Policy in 2015. Telangana is home to 6660+ DPIIT Registered startups.

What Does Congress Propose to Bring to the Table for Startups?

The party has pledged to restructure the Fund of Funds Scheme for startups, allocating 50 percent of the available fund, as evenly as possible across all districts, to provide funding to individuals under 40 years old to initiate their own businesses and create employment opportunities.

The Fund of Funds Scheme, introduced by the Prime Minister on January 16, 2016, as part of the Start-up India Action Plan, has allocated a corpus of Rs 10,000 crore for contribution to various Alternative Investment Funds (AIFs) registered with SEBI."

Congress Ambitious Tax Reform Promises for Businesses

Congress, in its Manifesto, said, “Taxation forms the core of governance. The last ten years of the BJP/NDA government is a case of “taxation gone berserk”.

The share of taxes paid by the common person and the poor through regressive indirect taxes has increased significantly and the share of taxes paid by corporates has decreased – the exact opposite of what a people-friendly and progressive taxation policy should be.”

The Congress party promised a comprehensive overhaul of India's taxation system to prioritize fairness, efficiency, and incentivize private savings and investment.

The party said that under the Congress leadership, a Direct Taxes Code will be enacted to ensure transparency, equity, and impartial administration. Stable personal income tax rates will be maintained, providing certainty for financial planning. Harmful schemes like the "Angel tax" will be abolished to encourage investment in innovative startups. Moreover, MSMEs will receive tax relief to alleviate their burden.

The Congress proposes replacing the current GST laws with a more equitable GST 2.0, featuring a single, moderate rate to prevent undue strain on the poor. Additionally, the GST Council's structure will be revamped to enhance policy effectiveness, and a portion of GST revenues will be allocated to local governments. Tax relief will be extended to small retailers facing competition from online businesses, and judicial tribunals will operate autonomously, free from government interference. 

Let us see how much these promises woo the young startup voters of the country. Also, with Modi Government aiming for “apki baar 400 paar, all eyes are set on the Bhartiya Janta Party (BJP) manifesto which is set to release soon.

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