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The Budget 2019 presented this year focused primarily on increasing consumption and addressing the plight of farmers in India. In his budget speech,Finance Minister,Piyush Goyal, laid down significant steps the government plans to take in order to ease the problems associated with the agricultural population of the country, while also giving the middle-class some major tax relief, exempting those with an annual income of upto Rs. 5 lakh from paying taxes altogether.

Breaking away from its focus on developing the startup ecosystem in the country, this year's budget speech didn’t contain even a single mention of any kind of reforms that were directly related to the startup ecosystem or more specifically, addressed the angel tax’ problem that has been a point of discussion among founders and VCs alike in the past one year. This is in stark contrast to the budget presented last year which had multiple mentions and reforms aimed at the growth of startups.

Here are some of the key highlights of the Interim Budget for the Indian startup ecosystem:
1.Smooth sailing for Consumer Startups
This year’s budget was especially beneficial for the middle-class and more so,for startups in the consumer internet sector,with the announcement that the taxable income of individuals would be increased to Rs.5 lakh and standard deduction would be raised from Rs. 40,000 to Rs.50,000.He further added that individuals earning Rs. 6.5 lakh per annum with savings for investments, would be exempted from paying taxes. This is a great opportunity for startups in the consumer space,since the move significantly increases the purchasing power of the Indian public and since the proliferation of smartphones and increased Internet penetration; consumption of consumer goods and technologies is set to soar higher, both online and offline.
2. Inching towards becoming an AI-focused economy Under the section.Empowering Youth to fulfill their potential’, the Government announced a ‘National Programme on Artificial Intelligence’. Although there was no clear statement in relation to how much funds would be allocated to further this development, the Government plans to set up a National Centre on Artificial Intelligence as a hub along with Centres of Excellence,with 9 priority areas already being identified. With the emergence of AI as a future technology, and India looking for skilled engineers efficient in development of deeptech solutions, machine learning alongside other associated technologies and the government's various other schemes like Digital India and Startup India,will only help in the rise of AI-based startups and solutions. Thus it will promote the growth of digital knowledge and investment in futuristic technologies.
3. Entertainment Startups Receive Boost India is one of the largest consumer of content across mediumswith the advent of online streaming and content-based etc., in the last 2 years. The Interim Budget states that Indian filmmakers and content creators will get benefits such as single-window clearance for shooting films, something which was available only to foreigners till now. The Government will also introduce anti-camcording provisions in the Cinematograph Act, to prevent piracy.
4. Easy Tax Compliance for Startups
The Interim Budget mentions that in two years, all tax assessments will take place electronically.All returns will be processed in twenty-four hours and refunds issued simultaneously.Within the next two years, almost all verification and assessment of returns selected for scrutiny will be done electronically through anonymised back office,manned by tax experts and officials, without any personal interface between taxpayers and tax officers. The threshold limit for presumptive taxation of business has been increased from Rs.1 Cr to Rs. 2 Cr. The benefit of presumptive taxation has been extended for the first time to small professionals fixing the threshold limit at Rs. 50 Lakh.
5. Defense Startups aim for the target
The Finance Minister stated that the Government has singled out a budget of Rs. 3,00,000 crore for 2019-20. The Government now, has brought startups under the ambit of defence procurement by launching the Defence India Startup Challenge last year.
6. Bringing Rural India on the Digital Roadmap
The Government plans to brIng 1 lakh villages on the digital map in the next 5 years. This would be achieved by employment of Jan Dhan,Aadhaar mobile and direct benefit transfer. With rapid increase in smartphone usage and Internet penetration, this move can really help foster true development as a large part of the Indian population still resides in villages and tier-2 and III cities and the implementation of this policy can see the devlopment of ventures that address problems exclusive to small-towns.
7. Farmer’s Rejoice
Minutes into his speech, Piyush Goyal declared the PM Kisan Yojana that would directly benefit 12 crore small and marginal farmer families.Under this programme, vulnerable landholding farmer families, having cultivable land upto 2 hectares, will be provided direct income support at the rate of Rs. 6,000 per year. This is a great opportunity for agritech startups to develop technologies impacting agriculture and to work directly with farmers as well as create value-added farm based products.
8. No Mention of Electric Mobility Policies
While the Indian Government has made a lot of noise regarding its plans to push electric vehicles and to create infrastructure enabling EVs, the budget made no mention of initiatives in this regard that can fast-track the development of an ecosystem supporting Electric vehicles. The budget made only a singular reference,that too, as the need to clean up 'Mother Earth’ and other platitudes, while saying- “India will lead the world in the transport revolution through electric vehicles and energy storage devices, bringing down import dependence and ensuring energy security for our people.”
9. No Mention of Angel Tax
The Budget 2019, made the most news with regards to the issue of angel tax, with startup founders and venture capitalists having constantly demanded for reforms related to angel tax. While the Budget 2018 presented by Arun Jaitley atleast made a mention of the issue, the budget presented this year clearly avoided making any mentions about the same.
By:Manan Trivedi

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CIN- U74999DL2019PTC347107