Digital University with its hub-and-spokes model could also lead to generation of employment, say experts
Ankit Agarwal, Founder, Do Your Thng (DYT): Startups are indeed drivers of growth for the Indian economy, and it’s encouraging to see the extension of the existing tax benefits and 25% of the R&D budget allocation. It will give nascent startups more breathing space.
There’s one part of the budget that heralds a new era for the Creator Economy in India. Taxation of income from virtual digital assets is proof we are finally embracing NFTs and Web3.0. Together they are the cornerstones of the burgeoning creator ecosystem! Couple this with a blockchain-based digital Rupee, and it will create a knock-on effect.
Akshit Bansal, Co-Founder of Statiq: The Union Budget 2022-23 has made a strong case for clean energy and environment by supporting the EV charging segment and according us the freedom to re-evaluate ways for promoting ease of charging EVs with low-cost renewable energy (RE) systems. Pairing EV charging with RE structure has resulted in the positive development of the economics of adoption of both factors. By broaching the guidelines in the speech, the Ministry of Power has opened the gates for discussion and investment in favour of public EV charging stations, by prescribing a timetable for open access applications and the applicable fees. And for that we, as a sunrise sector and as a nation, are extremely grateful.
Abhishek Malhotra, Managing Partner, TMT Law Practice: Cryptocurrency has been brought into the tax net of 30% which is a welcome move, as the same does not seem to be subject to a complete ban anymore. Further, as gains from its trading will also be taxed now, this will bring in some faith in the investors.
The proposal to start digital rupee by 2022/ 2023, only indicates that the government is abreast of the changes taking place around the world and will take lead in granting approvals and investments. This also gives assurance to individuals that digital currencies will not be outlawed.
With data centers having been moved to a harmonized list for infrastructure sectors, this only will incentivize players as the need for data localization and storage requirements increase, with the existing norms, and the pending data protection legislation.
With roll out of 5G services in 2022, post spectrum allocation, this might also be a boost to the telecom services in general. This will assist in proliferation of other online services, reliant upon fast internet connections.
The adoption of Kisan drones for crop assessment, digitization of land records, spraying of insecticides and nutrients, will bring about a phenomenal change in assisting the need of the farmers, and may stall the constant migration that takes place when the farmers are rendered without work during the off seasons.
An open platform for the National Digital Health Ecosystem will be rolled out. It will consist of digital registries of health providers and health facilities, unique health identity and universal access to health facilities. This is in line with the vision of universal healthcare, and this linked to a robust data privacy framework, will bring about a revolutionary change in the management and availability of health data and records.
Digital University, once set up in the hub and spoke model could also lead to generation of employment and boosting vocational jobs.
Swapnil Pawar, Founder, ASQI: The move to tax digital assets is a welcome one, since it removes the potential confusion in tax filing by crypto-investors. Taxing of gifts and TDS are also useful to reduce abuse of anonymity in the crypto domain. We believe that the future of crypto innovation is in KYC-compliant transactions in legally recognized tokens.
Rupee in CBDC form, if not constrained by only existing banks being allowed to participate, can be a game-changer for payments, credit and capital markets. It can significantly improve financial inclusion in India - by enabling faster innovation not constrained by legacy systems.
Mohammad Azhar, Lead Government & Public Sector Initiatives at Villgro:
The tax incentives and effective redressal of issues like payment of Tax even after the country lockdown are one of the more debatable concerns for 2-3 years old startups. The startups differ from traditional businesses and they are focused on innovation, technology, and exponential scaling/sustainability. Therefore, their tax issues are also slightly different from other businesses. Proposal of tax holidays from 3 years to 4 years is a welcoming step from going good to great in bringing sustainability in the startup ecosystem."
Nishant Arora, Co-Founder, Sixth Element Finserv’s Setup Services India: In the Budget, the Government's goal was to complement macro-growth with micro-all-inclusive welfare, digital economy and fintech, tech-enabled development, energy transition and climate action. The announcement of the launching the Digital ecosystem for skilling and livelihood will lead to the growth of startups; the development of Digital universities will provide manpower to strengthen the startup ecosystem further. Another positive for the startups was an extension of the period of incorporation by one year until March 31, 2023, for tax relief. It was a balanced Budget where every sector was given due consideration with a special focus on streamlining the growth after the effects of the pandemic. Government directly venturing into blockchain shows that technology is the way to go ahead. The budget also highlighted that all startups will be promoted to facilitate ‘drone Shakti’ for the promotion of drone as a service, it is a big leap for tech startups. The new tax rule was a unique addition, wherein taxpayers can file an updated return on payment of taxes, within two years from the end of the relevant assessment year. However, corporate employees were pinning high hopes on a move like providing benefits to salaried individuals by extending standard deductions and increased allowance of medical expenditure amid the pandemic.
Priyadarshi Mishra, CEO/Founder, TradeSmart – Startups: With announcement of Union Budget 2022 by honourable Finance Minister, the budget has focussed more on the Made in India initiative to minimize the dependency. To encourage the start-up ecosystem government has relaxed the tax and introduced flexible policies to help start-ups in the country.
With an expected growth of 9.27% percent the budget has given enough flexibility for start ups which will help to create new job prospects. The use of drones for startups will push the start ups for excellence. The promotion of fintech and technology based development will help the economy gain a pace as well as create a better job prospects for individuals.
Ravi Mittal, Founder and CEO QuackQuack: The budget was startup friendly with the government showing support in drone tech and the EV space which will benefit these sectors to grow. This shows the government is thinking futuristic. The rollout of 5G in the coming years will be a boon for startups as more people will have access to cheaper and faster internet and startups in digital space will benefit from this. However, the 30% tax on digital assets like cryptos and NFTs has come as a sudden move and will effect the growth in this space in the last year. One interesting and positive outcome of the budget is the reduction in long term capital gains will be an advantage for startups.
Harshad Chetanwala Co-founder MyWeathGrowth.Com: The increase in capital expenditure across sectors and the focus on infrastructure and education are big positive of this budget. The budget has tried to cover all the sectors and also laid emphasis on job creation and technology. It continues with the growth-oriented approach which is more like taking ahead the previous year’s budget.
The tax of 30% on Virtual Digital Asset along with 1% TDS on transfer and no set-off for losses is something that directly impacts avenues like cryptocurrencies and NFT. Many retail investors have been investing in these assets by just looking at high returns potential. The taxation part may work as some sort of roadblock as these virtual digital assets continue to remain unregulated.
'One Nation, One Registration' that will facilitate anywhere registration to facilitate ease of doing business will be helpful to many existing and upcoming businesses, thus encouraging more domestic and international investors to invest in India