With the Union Budget 2025 only a couple of weeks away, startups in the country are once again looking towards the Modi 3.0 administration to streamline policies to propel the growth story. With the economy showing signs of both resilience and challenges, startups are hoping for measures that might support innovation, ease funding access, and build a more conducive business environment. Here is what the Indian startup community anticipates from the upcoming budget, set to be presented by Finance Minister Nirmala Sitharaman in the Indian Parliament on February 1, 2025.
Ease of doing business
Despite Prime Minister Narendra Modi consistently stating that ease of doing business had improved in the country during his tenure, several bottlenecks remain. Startups, especially in the manufacturing setup have to go through the hoops to get a simple clearance or approval. The government can make it easier for early-stage startups by easing the compliance burden.
Simplified tax regime
Apart from citizens hoping for a reduction in personal tax rates, startups are also wishing for a simplified tax structure that reduces compliance burdens. This includes extending tax holidays, revising corporate tax rates, and simplifying procedures for setting off and carrying forward losses.
Infrastructure development
Research and development (R&D) is a capital and infrastructure-heavy enterprise. The government should aim to improve its infra to ensure that investment in the area continues. Creating startup hubs with state-of-the-art facilities, co-working spaces, and access to essential services can significantly reduce operational costs and provide a nurturing environment for innovation and growth.
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Bet on emerging technologies
With artificial intelligence (AI) being the buzzword, the Indian government has the opportunity to hop on the AI train and make major inroads. The Union Budget 2025 should prioritise innovation and growth with the country’s digital economy, projected to reach $1 trillion by 2028, as per a report in Economic Times.
Edtech startups need help
After accelerated growth during the COVID-19 pandemic, the edtech startups have struggled to maintain the same momentum. The industry will be hoping for potential tax incentives, primarily in the form of Goods and Service Tax (GST) exemptions for under-privileged students, and reduction in GST for educational products and services.
Intellectual property rights
Enhanced support for Intellectual Property Rights (IPR), including faster patent processing, lower fees for startups, and more resources for IP education, is what the startups expect from Ms Sitharaman.
Access to credit
Improving credit availability, particularly for MSMEs and startups, through schemes like the Credit Guarantee Scheme for Startups (CGSS), is crucial. This would help startups scale operations without the burden of high-interest loans.
