Finance Minister Nirmala Sitharaman proposed extending the date of incorporation for income tax benefits to start-ups from 31.03.23 to 31.3.24. The FM also proposed extending the benefit of carrying forward losses to startups for a period of ten years.
“Entrepreneurship is critical to the economic development of a country. We implemented a number of start-up-friendly policies, and they have yielded positive results. “India is now the world’s third largest startup ecosystem and ranks second in innovation quality among middle-income countries,” Sitharaman said. The budget measure comes at a time when the startup sector is experiencing a funding winter, with investors only investing about $25 billion in Indian startups in 2022, a 40% decrease from the $42 billion raised across 1,500+ deals in 2021.
The government allocated Rs 283.5 crore for the Startup India Seed Fund Scheme in Budget 2022-23, which was higher than the Revised Estimates of around Rs 100 crore in the previous budget. The Fund of Funds for Startups received a budget allocation of Rs 1,000 crore.
The government has taken a number of steps to encourage the growth of startups in the country. The Startup India initiative implements the Fund of Funds for Startups (FFS) scheme, the Startup India Seed Fund Scheme (SISFS), and the Credit Guarantee Scheme for Startups (CGSS) to provide capital at various stages of a startup’s business cycle.
In January 2016, the government launched the Startup India initiative with the goal of creating a strong ecosystem for nurturing innovation and encouraging private investment in the startup ecosystem.
