Startups Get Boost in Union Budget 2019 by Government of India
Union Budget For Startups
Union budget is the Annual Financial Statement which is presented on the 1st day of February by the Finance Minister of India. In the Union Budget of 2019 startups get a major boost who were having a hard time dealing with Angel Tax. Earlier they had to face problems related to high credit cost, inadequate or delayed funds and various regulatory bottlenecks.
- The government has announced in the Union Budget 2019 that startups will not be subjected to any kind of scrutiny on valuation. The Indian Government has been rolling out startup policy to assist setting up at least more than 50,000 startups and 500 new incubators by 2024. Therefore, this announcement has been welcome by the entrepreneurs.
- Government has been planned to set up a TV programme for startups on India’s national television, Doordarshan. This programme is assumed to set a platform to match venture capitalists with emerging start- ups. This will ease foreign direct investment into startup segments like grocery, e- commerce, food delivery, incentives for electric vehicles that would assist EV startups. However, this programme would be controlled by the startups themselves.
- In order to create 75,000 skilled entrepreneurs in agricultural sector, the government has been planned to set up at least 80 livelihood business incubators and 20 tech business incubators.
- Various measures will be taken by the government in labour laws, education and rental housing segments. According to the government all of them would have a direct impact on the startups of the country.
- In 2016, government has introduced the Stand- Up scheme among the women and marginalized entrepreneurs. This scheme is assumed to expand further during the entire period between 2019 and 2025.
- The Government has proposed a reduction in goods and services tax (GST) and income tax rates applicable for electric vehicle makers and owners respectively in the country, which is likely to be considered as welcome move for EV makers like Ather Energy, Her Electric, among others. The current budget has also proposed 100% FDI in insurance intermediaries.
- As part of the Startup India action plan in 2016, announced a Rs 2,000-crore credit guarantee fund. That apart, a Rs 10,000-crore fund managed by the Small Industries Development Bank of India had also been announced.
- According to the Startup India status report, as of late last year, less than 20% of the corpus was allocated to alternative investment funds, with the total commitment at Rs 1,611 crore.
Union Budget For Education
Education would be one of the first preferences of the government as it is the first step towards a developed India. Education is a weapon to vanish terrorism, negative vibes, poverty, unemployment and corruption to maintain a better system for governance and intense focus on innovation and research. The government wants to transform the higher education system of the country. Various ideas are as given below-
- National Research Foundation will be ready to provide funds in the sector of research.
- Finance Minister has announced a corpus of 400 crore under a head titled “World Class Institution”.
- There is a scheme named, Study in India, whose main aim is to attract foreign students to achieve education from India.
- After completing the education students still don’t get the jobs of their own choices. Due to this government has decided to focus more on good skills such as languages, artificial intelligence and robot training.
Union Budget For Infrastructure Development
Infrastructure is one of the major issues in the FY19 budget. It is important for the development of the country. Government need to spend a lot of money on roads, railways, water, irrigation and urban infrastructure. All these things will push the country to compete other development countries in order to become economic superpower.
Since various years public sector has remained dominant but now government wants private sector to do its best for modern and robust transportation and logistics network at par with developed countries.
RAILWAYS: Government has planned various things in terms of railways such as-
- Replacing walking inception with automated inception.
- Upgradation of track management system into a dynamic asset maintenance and management system
- Improved mechanism of track management organisation across zones and greater use of RCM/ CBM
- Introduction of semi- high speed trains which would assist passengers to reach anywhere in less time
- Government is planning to attract private sector for the re- development of their stations and passenger management
LOGISTICS: There has been a thrust on development of multimodal logistics parks (MMLPs) in the past few years to boost multimodality and integration of logistics services in the country. In addition to the proposal for developing 35 MMLPs across the country, the government has also drafted an MMLP Policy to serve as the guiding document for the development of MMLPs in the country.
Setting up and empowering an independent department for Logistics and Trade/ Freight Facilitation. Instead of the present context where multiple agencies undertake development of MMLPs – leading to inefficiency in infrastructure planning and regulatory delays in approvals, this department should act as the nodal agency for providing approvals for all kind of terminal infrastructure, including MMLPs, ICDs, CFSs, PFTs, and logistics parks.
Union Budget For Pension
Common people needs a support of money mainly those who have been financially dependent on others. The Union Government has announced two major schemes which are given below:
- PRADHAN MANTRI KARAM YOGI MAAN DHAN SCHEME- This scheme is beneficial for those traders and shopkeepers whose annual turnover is less than 1.5 crore
- PRADHAN MANTRI SHAM YOGI MAAN DHAN YOJANA- This scheme covers the workers from unorganized sectors whose monthly income is less than Rs. 15,000
Union For Women Empowerment
- The Government has been said that they supported women entrepreneurship since very long through the schemes such as MUDRA, Stand Up India and Self Help Groups movement. However, major reforms will often take place in all these schemes.
- Moreover, the government wants to make women as strong as men because they are the makers of our future. It is the aim of the government to make every woman empowered and powerful. Every SHG Women having Jan Dhan Account – Rs. 5,000/- overdraft allowed: FM. Moreover, they are allowed to take loan amount of at least Rs.1,00,00,000 under MUDRA scheme
Union Budget For Banking And Financial Sector
The motive of the government under this topic is to make reforms to strengthen governance in Public Sector banks.
- NBFCs – that are fundamentally sound, will get funds from the government to a total of 1 lakh crore during the current financial year
- Proposals for strengthening the regulatory authority of RBI over NBFCs – Debenture Redemption Reserve to be maintained
- Proposal to return regulatory authority from NHB to RBI
Union Budget For Technology
Technology is enabler if you want to build a road, house, school, stations and offices for that matter. In short major steps will take place in order to expand it.
- Solar storage batteries and chargers included in 35AD deduction
- Program of mass scaling of LED Bulbs – Approx. 35 crores of LED bulbs distribute
- Machines and robots to be deployed for scavenging
- Focus on VR, AI, Robotics training to youth to align India with the World
Union Budget For Direct Taxation
- Under Section 80EEA, interest deduction on housing loan has been increased by 1.5 lakh for home loans taken on self-occupied house property by 31/3/2020
- People find difficulties when they need to open and account or avail the loans in case when Aadhaar Card and PAN Card are required at the same time. Now the government has solved this problem as they can be interchanged for ease and convenience of taxpayers
- Moreover, Income Tax return can be filed using your Aadhar Number
- Surcharge for individuals having taxable income from Rs . 2 crores to Rs . 5 crores increased to 25% – FY 2019-20. At the same time, Surcharge for those who have taxable income from Rs 5 crores to Rs 10 crores increased to 37% – FY 2019-20
- Proposal to give relief in levy of securities transaction tax.
- Section 35AD deduction extended to Li-On battery, semi-conductor, Laptops, Fabrication & Photovoltaic cell
- Additional income tax deduction of up to Rs. 1.5 lakhs is proposed on payment of interest on loan is taken to purchase electric vehicles under section 80EEB
Union Budget For Household
- Government has decided to provide basic facilities such as Provision of housing, electricity, clean cooking facility, safe and adequate drinking water to all in rural India. As rural areas of our country has always been neglected since many years. These areas has been unorganized and isolated because they have been ignored. Due to this finance minister assures that the government will make possible to provide them basic amenities- Roti, Kapda and Makan
- Encouragement of rainwater harvesting, groundwater recharge, and management of household wastewater for reuse in agriculture
- Har Ghar Jal – to all rural household by 2024
- 7 crore LPG connections delivered to rural households
Union Budget For Ministry of Micro, Small And Medium Enterprises (MSME)
Government wants to encourage the small businesses and planning to take major steps:
- 350 crore rupees allocated for 2% interest subvention for all GST-registered MSMEs on fresh or incremental loans
- MSME: Large-scale extensive reforms planned, government to create a platform for MSME payments
- MSME to get loans up to 1 crore within 59 minutes. Loans worth Rs. 350 crore already disburse