Majority of Indian start-up founders and venture capitalists welcomed the Union Budget 2022 -23 presented by Finance Minister Nirmala Sitharaman, while some pointed to the missing mention of GST reforms. 

According to Kalyan Krishnamurthy, CEO, Flipkart Group, today’s budget is an inclusive and growth-oriented balanced budget with a clear focus on strengthening physical and digital infrastructure, boosting the ‘Make in India’ start-up ecosystem and providing a strong digital push.

“The various initiatives will significantly contribute to the Indian dream of creating a 5 trillion dollar economy. The creation of the technology and innovation-based Unified Logistics Interface platform, and the development of cargo terminals will further boost an efficient supply chain ecosystem in India and create millions of new livelihood opportunities,” he added.

Further, Kunal Bahl, Co-founder and CEO, Snapdeal said, “This is the digital revolution budget. We welcome the government’s emphasis on creating new digital touchpoints to empower multiple aspects of our society and supercharge the start-up ecosystem. New initiatives across currency, banking, education, skilling, health, passports, and logistics will enable a large part of the country to benefit from India’s growing digital revolution. The government’s focus on augmenting India’s road, rail, and telecom infrastructure will help further accelerate growth opportunities across Bharat.”

On the other hand, Byju Raveendran, Founder and CEO, BYJU’S noted that there is a significant jump of 12 per cent in the budgetary allocation to the Ministry of Education. He appreciated that the government continues to approach education reforms with a digital-first mindset. Programs such as ‘One class One TV channel’ for supplementary education in school, DESH-stack for upskilling India’s youth and virtual labs for developing critical thinking skills, which will go a long way in fulfilling the liberating vision of NEP 2020. 

“I have always maintained that the digital learning gap is easier to bridge than the physical learning gap. The plan to connect all villages and their residents with optical fibre by 2025 is a welcome step in this regard. The proposed digital university with a personalised learning experience will make higher education more accessible and equitable,” he added. 

Talking about the announcement of digital rupee, Vijay Shekhar Sharma, Chairman, Managing Director and Chief Executive Officer, Paytm, said, “The Union Budget today made way for digital rupee, which is a monumental step in driving the next phase of growth in the digitisation of financial services and payments in India and will bring efficiency of transactions. Clearly, the success of digital payments is prompting the next milestone of this journey. Through the massive adoption of Paytm, QR code, and digital banking, we have seen that customers are ready for mainstream digital money. I’m excited that India will be at the forefront of new financial services that can act as a big gamechanger in lowering the cost of banking, which in turn will drive financial inclusion.”

Reducing Surcharge on long-term capital gain 

“The way the Finance Minister has recognised the start-up’s contribution to the Indian economy, is really commendable. Appreciating start-ups for being part of the Indian growth journey is good and reducing surcharge on long-term capital gain, capping it up to 15 per cent, I feel that this will boost the investment in the start-up sector in the future,” said Akhil Gupta, Co-Founder and CTO, NoBroker.com.

Agreeing with Gupta, Dr. Apoorva Ranjan Sharma, Co-Founder & President, Venture Catalysts and Managing Director of 9Unicorns Accelerator Fund, also said, “The Finance Minister announced a reduction in the surcharge on unlisted shares from 28.5 per cent to 23 per cent, which will make it easier for entrepreneurs and unicorns to exit, thereby impacting the investment churn.”

However, Anirudh A Damani, Managing Partner, Artha Venture Fund argued that while there has been some rationalisation on the surcharge of selling start-up investments, it is only a small drop in the ocean. “I am quite disappointed that the government hasn’t done more to rationalise the taxation between listed and unlisted investments – that would have encouraged more participation of investors in the ecosystem. Alternatively, the government should have provided tax benefits for making investments in the start-up space, which although riskier than the listed space, are critical for the nation as recognised by the honourable FM in her speech. I’m looking forward to the active actions by the ‘expert committee’ that will be setup for the PE/VC space. I truly hope that it is not simply for academic purposes and has a wide participation to include all stakeholders,” he added.

  Gopal Jain, Co-founder and Managing Partner, Gaja Capital said, “The budget provides a level playing field for start-ups by capping LTCG to 15 per cent. It aims to expand funding for start-ups by sponsoring more funds. This path breaking move will help onshore our offshore PE/VC industry and provide a boost to start-ups as each fund of funds will in turn fund between 150-200 start-ups.” However, he added that a miss for the budget to balance the narrative is the silence around GST reform.

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