Union Budget 2024: Indian Startups, Investors, & Experts Questions What's Next?

Regardless of being a focal point for investors, the e-commerce startups are also affected by insufficient funding over the past two years. In order to overcome these circumstances, e-commerce startups have a couple of wish-lists towards the government such as stressing the center to encompass the benefits of tax to startups and concentrating more on export-related policies and initiatives which has a potential to foster the overall economic development of the nation. They also want the Union to articulate significant policies that scale the operations in business and nurture the digital payment innovations.

Even the Spacetech startups list some demands including the allowance of GST exemption for all rocket vehicles, ground equipment and satellites. The spacetech ecosystem wants the Union government to release a clear note on its stand on FDI – Foreign Direct Investments in the industry. The early-stage and mid-level startups in the sector are looking for PLI – production-linked incentive scheme to augment the manufacturing of space components and seeking considerable budget allotment for space industry.

“Stringent regulations and compliance standards enforcement is necessary in the BFSI and fintech sectors. Regular cybersecurity audits and assessments for financial institutions therefore should be mandated to ensure robust protection,” said Ruchin Kumar, VP-South Asia of Futurex.

The Fintech industry is foreseeing the union budget as a potential point to set a revolutionary agenda that paves the path for tech-enabled access to financial services for all the citizens in India through empowering the startup players in the sector.

The emerging players in the industry are hoping for regulatory policies that would stimulate the digital accessibility in India including payment regulations and technological frameworks. Within conductive regulatory initiatives and improved private-public partnerships coupled with technological disruption such as block chain and AI, the fintech startups in India rigorously awaiting to unleash the digital financial transformation in India.

MobiKwik, Co-Founder & CEO, Bipin Preet Singh says, “The Union Budget 2024-25 can support this growth with clearer regulations, tax exemptions, and lower capital costs, boosting profitability. A lot needs to be done to bring the under-banked into the financial mainstream, especially in Tier-II & III cities and beyond, where the penetration of fintech products and solutions remains low”.

India has seen a skyrocketing improvement in the agritech sector with 3000 agritech startups. More than 1,300 of these startups are utilizing technologies like AI, ML, and IoT to boost productivity and efficiency.

Dhanashree Mandhani, Founder & CEO, Salam Kisan and PRYM Aerospace mentioned, “The proposed agriculture budget of approximately Rs.1.17 lakh crore for FY25 highlights the government’s robust commitment to revitalizing India’s agricultural sector”.

Investors & Entrepreneurs Perspective

We can say there is a mutual wavelength between the entrepreneurs and investors, as entrepreneurs need investors to unleash their stunning ideas and investors need stunning entrepreneurs to put their resources which will offer them a good return on investment.

So, towards the upcoming Union Budget, both investors and entrepreneurs seek to reform the taxations that nurture investment, support entrepreneurship, and streamline the funding process to cut down the compliances and burdens.

Also, they trust the implementation of initiatives to amplify the access to simplified funding such as easier credit obtainability, seamless venture capital funding, and strategic programs to enhance investments in small businesses and startups.

Early-stage startups seek help from the government for infrastructure development by empowering them to handle the core operations without any hassles including logistics, digital infrastructure, and logistics. And both the innovators anticipate essential measures to restructure the regulatory processes in order to create a more feasible and conducive environment to run business which directly impacts the investment and entrepreneurship.

Anand Sri Ganesh, CEO, NSRCEL IIMB mentioned,

"The budget has traditionally looked at a combination of grants, SPVs and tax breaks to support startups. Where we may have attempted to create capacity, we may have erred in not enabling an ecosystem that facilitates economic and societal outcomes through innovation. We’d like to see the budget create incentives that allow innovation ecosystem players – science & technology institutions, incubators, corporates and institutional investors – to come together and create multiplier effects for innovators.

A voucher system that can be ‘redeemed’ by startups with labs & research institutions and corporates will allow for collaboration in product development and rapid prototyping. Policy sandboxes can enable testing, validation and interoperability in areas like inclusive finance, affordable healthcare and pervasive insurance. Fiscal incentives for institutions and corporations to proactively create an open-innovation environment create a win-win for all players.

India is the third-largest startup ecosystem in the fastest-growing major economy; yet economic contribution by startups is still in single digits. There is an opportunity now to dramatically alter this."