In this budget 2016 appraisal, we look at special aspect like reservations, exemptions and deduction of taxes. Like all governments of the past and those of the future too most probably, the Modi government is eager to put its best foot forward with the budget. More importantly, it wants to ingratiate itself with the ‘majority chunk’ of the voting population with the idea that this will bring stability to its government and have the goodwill of the people. Not a bad idea but then they forgot to consider the ‘thinking population’ of India which probably causes all the problems.
True progress comes only from a skilled workforce. Enthusiasm should begin from the entrepreneurs who recruit this workforce and impart training of basic and advanced skills to them. This will convert the lowest segment of unemployed and unskilled people into a dynamic and vibrant group ready to partake in active development programs of the country.
In this context, India represents energetic environments for start-ups in the world. This budget 2016 appraisal will look at the plus points and the shortcomings that this budget has put forward. Well, look at the proposals that look as bright as the sun in our Indian skies:
Well, this certainly is in line with Indian Prime Minister Modi’s promise made before the elections. The two things, tax breaks on company profits and easing of norms for startups have certainly been fulfilled.
The NDA government initiative ‘Startup India Stand Up India’ had a warm welcoming from the entire entrepreneur sector. Side by side, Modi announced the allocation of Rs. 500 crores for new entrepreneurship programs from Dalits and women. There are a few who decry such increase in ‘quota’ schemes since this will increase the number of people who are less qualified. I mean, consider the more qualified person who is without a job or a chance to begin his or her own startup. The overall average of the participating economy drops by several percentage points. However, we can expect to see 2.6 lakh new entrepreneurs under this scheme. After all, everyone began at the same place.
In view of the existing 49.5% reservation in government jobs for the backward classes, OBC, SC and ST, this kind of incentive proves to be a positive thrust towards making people more self-reliant. Sweet as it all sounds, there are some minus points in all this.
First, the capital gains tax exemption will not serve any purpose since most startups do not make any profit during the initial years. So the 100% deduction for 3 out of 5 years amounts to nothing. In addition, compare the 20% that you pay in India to the 0% of Singapore. If you want to save a couple of millions, move your business to Singapore.
Moves to deregulate startup registration and beginning steps so that companies would face less difficulty seem good. Just pick up your mobile and do the 1-day incorporation of your business. It used to be a 20 – 30-day affair. It will still involve lots of online paperwork like Name Approvals, digital signatures and obtaining Certificates of Incorporation.
There has been some hue and cry in the commodities market asking for parity in prices especially in the case of gold. This entails removal of all tax and duty on the precious metal. This could boost rankings of India as a gold trading centre and make it the capital for gold trading. Certainly, will help perk up Dalal Street and the trading community considerably.
Another positive move was the proposed 10% on patents. This could bring more inventors to patent their products and in most cases manufacture their goods in India.
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