The Budget 2018 was riding high on expectations from startups, VC funds, middle class and working professionals. The FM did touch upon a few important issues concerning these segments but no significant announcements were made. For startups and angel investors, the biggest area of concern was removal of the ‘angel tax’, for which Nasscom and IAN have been lobbying. But the mention of additional measures to strengthen environment is an ambiguous statement. Does this mean that there could be a clarification in the offing on ‘angel tax’ or the noose is likely to be tightened further? This remains to be seen.
On the start-ups side, this Budget was a mixed bag. While there were big positive announcements on encouraging the use of blockchain technologies, research into developing AI and ML applications under Niti Aayog will give a fillip to startups. This means that startups working in cutting edge technologies like IoT, AI, ML, 3D printing could expect support from Niti Aayog, which will also translate into increase in investors’ interest in this segment.
Another positive is doubling of allocation under Digital India to Rs 3,073 crore and reiterating focus on cyber security spells good news for startups in this space. Cyber security continues to be an area of concern for enterprises and the government, as companies are still not spending appropriately in securing their systems. As India forges towards becoming a knowledge led digital economy in every aspect, cyber security has to become a board level topic with a well thought out strategy to run this important and critical business function.
Rural economy and its growth were no doubt the mainstay of the Budget, but the announcement on connecting 1 lakh gram panchayats via optic fibre and setting up of 5 lakh public Wifi spots will give a boost to data consumption in the country.
As more Indians are given free data, the market for selling a variety of product and services online opens up in a big way.
The FM also highlighted that the MSME sector should have easier access to funds to meet their working capital requirements. While this is good news for fintech companies, however, absence of any formal announcement makes this mention a half-baked thought into the burgeoning fintech and MSME segment.
The biggest blow, perhaps, came for crypto currency startups or at least the entrepreneurs who would have been planning to launch their business operations in this space. Declaring crypto currency an illegal tender is sure to break some hearts.
While a large section of experts were predicting a populist budget with elections only a few months away, Mr Modi has yet again gone against popular sentiment.
Bhaskar Majumdar, Managing Partner, Unicorn India Ventures
