Budget 2023: Emphasizing the growth of AI and the Start-up industry

This year is going to be very crucial for the government’s efforts to boost digitization in India, in the tech and startup industry, especially the AI solution providers, have pinned a lot of hopes on the upcoming Union Budget. The policy decisions and budgetary allocations that the government would make are expected to shape the future of India’s thriving startup ecosystem. Given the fact that the country is at the cusp of a technological revolution, it is imperative that the government supports and empowers startups in this domain to thrive and innovate for a better future. The AI and startup sectors are in anticipation of steps like increasing the angel investor pool at the seed stage and a tax relief incentive of 30% of the cost of equity shares set off against the investor’s income tax liability for the year in which the investment was made. In many cases, employees tend to use ESOPs to accumulate wealth and use the same to launch their own startups. That’s why the startup sector has been demanding that the ESOPs should be taxed at the time of sale, and not at the time of vesting.

Another critical need is to establish a single window for all registrations including company incorporation, shop establishment, GST registration, MSME certificate, etc. This is going to simplify things and save startups crucial time, money, and effort.

Also, there has been a lot of buzz about the creation of new industries and startups in the domains of Robotics, SAAS, Deep Tech, Clean Energy, Fintech, and Digital Health for the year. We hope to see the upcoming budget address all these aspects for the country to move ahead toward the vision of achieving a GDP of $5 trillion by 2024/25.

(The author is Mr. Bhaskar Mishra, Head of Product, Mihup and the views expressed in this article are his own)

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