High Expectations as India’s 2024 Budget Nears, Startups Awaiting Boost Amid Funding Challenges

As India anticipates the Union Budget for the fiscal year 2024, the entrepreneurial community is keenly awaiting its potential impact on economic policies, particularly within the dynamic startup landscape.

India boasts the world’s third-largest startup ecosystem, housing over 92,683 emerging companies as of December 2023. This forthcoming budget holds heightened significance for startups, especially amid funding challenges, with startup funding in India hitting a five-year low of $7 billion in 2023, a stark decline from the $25 billion recorded in the previous year.

Avinash G Singh, Executive Vice President of Investment Research and Advisory at Aranca, emphasized the need for directions that could boost the startup e0cosystem. Key areas of focus include tax policies related to carry-forward losses, employee stock options, and the possibility of dedicated funds for industries like electric vehicles and renewable energy.

As the budget announcement approaches, a pivotal question emerges: Will Union Budget 2024 serve as the catalyst for growth in India’s lively startup landscape?

Leaders in the Industry Express Optimism

Industry leaders and innovators have shared their expectations, emphasising the role of fiscal measures in shaping the growth trajectory of startups. Scrutiny of budgetary allocations and policy decisions is underway to assess their potential to provide a robust push to the startup ecosystem.

Fostering a Favourable Environment for Entrepreneurs

The details of the budget are anticipated to play a crucial role in establishing an environment conducive to entrepreneurial ventures. Observers are eager to see if fiscal measures will act as a catalyst for startup progress and garner support from the investor community.

Call for Standardizing Capital Gains Tax

A significant expectation from the investor community revolves around the standardization of capital gains tax. The desire is for uniform tax rates and holding periods for both private and publicly listed shares, viewed as crucial for reinforcing the startup ecosystem by ensuring consistency and predictability in tax policies.

As the countdown to the budget continues, the startup community remains vigilant, hopeful that Union Budget 2024 will introduce policies supporting growth, innovation, and sustained momentum for India’s flourishing startups.