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Why Budget 2024 is for Startups, Innovation, Entrepreneurs and Jobs?

Union Finance Minister Nirmala Sitharaman presented Modi's govt's final budget before the Lok Sabha polls. What initiatives did Sitharaman unveil for startups, innovation, and entrepreneurs? How do industry experts analyze it, and who are the top gainers?

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The Interim Budget 2024-25, presented by Union Finance Minister Nirmala Sitharaman, aims to foster the country's innovation and entrepreneurial ecosystem. The budget reveals a significant plan to propel the nation into a golden era for its tech-savvy youth. Despite being an Interim Budget and not a full-fledged one, it still demonstrates the government's vision and roadmap. 

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Prioritizing innovation, tech-savvy youth, small entrepreneurs, and women entrepreneurs are undoubtedly among the top agendas for the government's focus on economic growth.

“As our Prime Minister firmly believes, we need to focus on four major castes. They are, ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth) and ‘Annadata’ (Farmer). Their needs, their aspirations, and their welfare are our highest priority. The country progresses, when they progress. All four require and receive government support in their quest to better their lives. Their empowerment and well-being will drive the country forward” the Finance Minister said in her Budget Speech.

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Sun Shines at Sunrise Sectors

The Finance Minister announced to set up a corpus of Rupees One Lakh Crore, a substantial investment aimed at boosting private investment in sunrise technologies.

Sitharaman emphasized the importance of this initiative, stating, "This will encourage the private sector to scale up research and innovation significantly in sunrise domains. We need to have programs that combine the powers of our youth and technology."

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The corpus, established through a fifty-year interest-free loan, will provide long-term financing or refinancing with extended tenors and low or nil interest rates.

PM Modi

Sitharaman said that Prime Minister Modi has furthered the slogan of “Jai Jawa, Jai Kisan” to “Jai Jawan Jai Kisan Jai Vigyan and Jai Anusandhan”, as innovation is the foundation of development.

In her Budget Speech, she said, “For our tech savvy youth, this will be a golden era. A corpus of rupees one lakh crore will be established with fifty-year interest free loan. The corpus will provide long-term financing or refinancing with long tenors and low or nil interest rates. This will encourage the private sector to scale up research and innovation significantly in sunrise domains. We need to have programmes that combine the powers of our youth and technology.”

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TICE News Spoke to Mr Anil Joshi, Managing Partner, Unicorn India Ventures, on what impact this announcement have on startups in the sunrise sector.

He says, "I think it is a very positive move and defines the importance of this growing segment, which otherwise finds difficult to get any credit line for business from any institute or financial. I think this is a very positive move and will certainly help a lot of innovative ideas to prosper with this line of credit. Certainly it's going help entire length and breadth of the country. There are so many unsung heroes who work on innovative ideas, but because of a very limited background, they lack the ability to attract credit line. I think this new initiative by FM in this interim budget will certainly help boost this segment and especially startups. So very positive move. 

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Deep-Tech Technologies for Defence

Acknowledging the transformative power of technological changes, the finance minister proposed a new scheme dedicated to strengthening deep-tech technologies for defense purposes.

“A new scheme will be launched for strengthening deep-tech technologies for defence purposes and expediting ‘atmanirbharta’,” the finance minister proposed.

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This strategic move aligns with the overarching goal of achieving 'atmanirbharta' or self-reliance, showcasing the government's commitment to fostering indigenous technological capabilities.

Wings for the Startups

Addressing tax proposals, the finance minister maintained the existing tax rates for both direct and indirect taxes, including import duties. However, certain tax benefits for startups and investments made by sovereign wealth or pension funds are set to expire on 31.03.2024. In a bid to provide continuity in taxation, Sitharaman proposed an extension of the expiry date to 31.03.2025.

Furthermore, the Minister announced measures to improve taxpayer services, aiming to address long-standing issues with outstanding direct tax demands. Outstanding demands up to Rs 25,000 for the period up to the financial year 2009-10 and up to Rs 10,000 for financial years 2010-11 to 2014-15 will be withdrawn, benefiting approximately a crore taxpayers.

Empowering Amrit Peedhi, the Yuva

The Finance Minister highlighted that under the Skill India Mission, as many as 1.4 crore youth have been trained, 54 lakh youth have been upskilled and reskilled, and 3000 new it is have been established. A large number of new institutions of higher learning, namely 7 IITs, 16 IIITs, 7 IIMs, 15 AIIMS and 390 universities have been set up.

Under the PM Mudra Yojana, 43 crore loans aggregating to Rs 22.5 lakh crore for entrepreneurial aspirations of our youth. Besides that, Fund of Funds, Start Up India, and Start Up Credit Guarantee schemes are assisting our youth. They are also becoming ‘rozgardata’.

Economic Management and Inclusive Development

The finance minister highlighted the multipronged economic management over the past decade, emphasizing its role in complementing people-centric inclusive development.

Digital Public Infrastructure was identified as a crucial factor of production in the 21st century, instrumental in formalizing the economy. Strengthening the financial sector, through initiatives like the GIFT IFSC and the unified regulatory authority IFSCA, has enhanced the efficiency of savings, credit, and investments.

Focus on MSMEs and 'Amrit Kaal' Strategy

The Minister outlined a strategic vision for 'Amrit Kaal,' emphasizing the importance of timely finances, relevant technologies, and appropriate training for Micro, Small, and Medium Enterprises (MSMEs) to grow and compete globally. Aligning with the 'Panchamrit' goals, the government aims to sustain high and resource-efficient economic growth, contributing to energy security in terms of availability, accessibility, and affordability.

Guided by the principle of 'Reform, Perform, and Transform,' the government plans to undertake next-generation reforms, building consensus with states and stakeholders for effective implementation.

“It is an important policy priority for our government to ensure timely and adequate finances, relevant technologies and appropriate training for the Micro, Small and Medium Enterprises (MSME) to grow and also compete globally. Orienting the regulatory environment to facilitate their growth will be an important element of this policy mix,” said the finance minister.

Sharing expert views in announcements for the MSMEs, Mr Praveen Khandelwal, General Secretary, Confederation of All India Traders (CAIT) told TICE News that this will boost the investment sentiment for small industries, traders and startups.

"When the Finance Minister mentioned a Capex exceeding 11 lakh crore, signifying an 11% increase, it is earmarked for infrastructure and various projects. As this money is spent, raw materials will be procured from the market, benefitting traders and entrepreneurs. Ultimately, when funds circulate in the market, businesses will reap the rewards," said Mr Khandelwal.

The ‘Nari Shakti’ Budget

Sitharaman emphasized the empowerment of women through entrepreneurship, ease of living, and dignity. As much as 30 crore Mudra Yojana loans have been granted to women entrepreneurs, and female enrolment in higher education has risen by twenty-eight percent in the last decade. This commitment to women's empowerment is reflected in their increasing participation in the workforce.

In a conversation with TICE News, Ms Priya Puranik, State Secretary, Laghu Udyog Bharati said, "The BJP has truly demonstrated 'Sab ka saath, sabka vishwas, and sabka vikas.' In this budget, they have placed emphasis on women, youth, poverty alleviation, and farmers, introducing schemes for development in these four sectors. I am very pleased with this focus. The emphasis on solar rooftop initiatives is promising, potentially generating employment for many. Overall, it is a good budget."

Startups for 'Annadata' and Global Opportunities

Recognizing farmers as 'Annadata,' the government continues to support them through schemes like PM-KISAN SAMMAN Yojana and PM Fasal Bima Yojana. The Electronic National Agriculture Market, integrating 1361 mandis, has facilitated trading with a volume of Rs 3 lakh crore.

The focus on farmer-centric policies, income support, and technology promotion through startups is poised to drive inclusive, balanced, higher growth, and productivity.

India-Middle East-Europe Economic Corridor: The Economic Game Changer for India

Highlighting India's global engagement, the finance minister pointed to the recently announced India-Middle East-Europe Economic Corridor, calling it a strategic and economic game-changer. The corridor is expected to become the basis of world trade for centuries to come, marking a historic initiative on Indian soil.

Development of Tourist Centres: Opportunity for Small Biz and Job Creation

The success of hosting G20 meetings in sixty places showcased India's economic strength to the global audience. To leverage this strength, the government plans to encourage states to comprehensively develop iconic tourist centers, rating them based on quality of facilities and services. Long-term interest-free loans will be provided to states for such development on a matching basis.

The move will benefit the small industry and the startups in the tourism sector and generate jobs in the market.

To address the growing fervor for domestic tourism, the government will initiate projects for port connectivity, tourism infrastructure, and amenities on islands, including Lakshadweep. This multi-faceted approach aims to not only promote tourism but also generate employment.

Budget 2024 reflects a comprehensive strategy to propel India into a new era of innovation, entrepreneurship, and economic prosperity. The measures outlined are poised to empower various sectors, with a particular focus on startups, MSMEs, and women entrepreneurs, contributing to inclusive and sustainable development.

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