Expectations of Startups from Budget 2019

By Mithun Srivatsa, co-founder &CEO, Blowhorn

"E-vehicles can be a real driver of MakeInIndia jobs as they are enabling a whole new breed of entrepreneurs take over the mantle of mobility. We do not see this fully replacing the IC engine ecosystem, but augmenting the current mobility channels, taking advantage of growth. This is a sunrise industry and government sops under FAME will drive the adoption and manufacturing prowess. We also need homegrown support for battery startups to ensure that we have full control on verticals of the supply chain. Considering our dependence on Oil, the US becoming completely inward with Shale powering all of its consumption and supply tremors; going 'long' on e-Vehicles is a good strategic-geopolitical bet and government should accelerate JVs of e-Vehicle makers and homegrown manufacturing. We need to be proactive rather than reactive and this can truly create a whole new swathe of manufacturing jobs.

Smart Cities and city planning should involve mobility startups. Goods mobility in urban centres is 3x as large as people mobility for the same regions. We need to have a dialogue on planning the flow of people within cities as urbanization will only increase as an increasing number of Indians transition into the middle class. Bangalore is a prime example of lost output which can be measurably improved by better urban planning and coordination between agencies. Having central and Federal smart-city plans with deeper engagements with new-age startups will be a good play.

We need to rethink our mindset when it comes to regulating innovative industries. A 'big brother' attitude leads to killing the opportunity before it is born. Majority of blockchain talent in India is currently scared to stay back and we will have an exodus. Drones can be ideal in the rural distribution of essentials. Can we have Special Innovation Zones (SIZs) where the lack of restrictive regulation and innovation is the key focus? Can we expand this concept to earmark some cities as SIZs? Can we use them like a sandbox and expand them to other cities?

We wish to see the government actualize '30% EV Mobility' vision by 2030, and the recommendations above will thrust forward India’s clean fuel vision."

By Gaurav Anand, co-founder & Director, Namaste Credit

"The current GST mechanism binds working capital i.e. SMEs have to pay GST at an event of raising the invoice but they also have to extend a line of credit to their customers. This leads to reduced working capital. SMEs are borrowing to maintain working capital when they should be focused on building capital (like infrastructure and tech-enablement). This is a big deterrent to the growth of MSME sector. We hope the government will re-look at GST levying and make it more friendly to SMEs. With respect to GST, there are just too many slabs complicating the computation and creating inefficiencies. This should be made a simpler and effective rate of interest should be lowered.

The government must also take steps to revive real estate by making home loans more attractive. There is a massive unsold inventory in the country which could be liquidated by taking simple steps like increasing rebate on home loans. The increased rebate is not an actual fund outflow for the government but can be really helpful to the reeling real estate sector.

The government should give confidence NBFCs to alleviate the current liquidity crisis for SMEs. We are not talking about operating issues but in case of macro events like global liquidity squeeze. The government should dedicate funds in the Digital India Program for complete digitization of loan documentation and processing. This will reduce the cost of credit and fasten the access to credit."

By Arpit Ratan, co-founder, Signzy

"Startups find it very difficult to engage with PSUs when applying for tenders and RFPs. So, what possibly the government can do is allow PSUs to have an innovation fund to invest in technologies such as AI and Blockchain, which make it easier for startups to get through the RFP route. Most of the blockchain and AI companies are small young startups, and in most cases, they find it challenging to get through RFPs, which usually mandates experience from the participating companies. The idea of the innovation fund is to allow startups to reach out to PSU in a more accessible manner than what it is today. This will possibly also allow PSUs better accessibility to new technologies."

By Tanuj Choudhry, Chief Business Officer, HomeLane.com

"With MSMEs (funded and bootstrapped) increasingly becoming a formal part of the mainstream economy, our hopes and aspirations from the first budget of Modi Govt 2.0 are high. Two big ones: (a) "Angel tax", which didn't find a mention in the Feb 2019 budget, should be abolished. Free flow of capital to help start new ventures is important, and risk capital needs to be better valued; (b) ESOP - early / growth stage ventures need to continue attracting top talent if we are to see the next 100-200 global leaders emerging from India. As a first step, it's critical that we move to taxing ESOPs when the actual sale happens."