In the Union Budget 2018, referring to the startup ecosystem, Finance Minister Arun Jaitley referred said that the government will take additional measure to strengthen startups and angel investment environment for their growth.
“Venture capital funds and angel investors need an innovative, special development and regulatory regime for their growth. We have taken a number of policy decisions, including the launching of the Startup India program building a robust investment,” Jaitley said in his speech in parliament.
Startup industry had anticipated a relaxation in the tax levied on angel investment.
Currently, funds from angels are taxed at over 30 per cent, which resulted in bringing down angel funding to 53 per cent. Angel tax clause was introduced in the Income Tax Act in the 2012 budget.
Since angels invest in startups at a very early stage of their business cycle it is considered a high-risk investment. Angels have been thus calling for a relaxation in this tax policy. Startups had filed a petition through change.org against Angel Tax demanded by the income tax department.
However, there were no such announcements made by Jaitley.
Ease of Doing Business
The govt is also working on ease of doing business, the FM said. It has identified 372 basic business reform actions. Improvement in ease of doing business will help attract more investments and better business climate for investors. Telangana and Andhra Pradesh (AP) jointly topped the 2016 all-India Ease of Doing Business rankings.
Recently, India took a jump of 30 places to break into the top 100 out of 190 nations ranking in ease of doing business.
Besides, the government in the last three years claimed to have scrapped around 1,200 complex laws and procedures for easy registration of start-ups.
Jaitley also announced that NITI Aayog will establish a national programme for artificial intelligence.
Jaitley speaking on cryptocurrencies like Bitcoin said that the government will eliminate virtual currencies usage for illegitimate financing.
“Cryptocurrencies are not legal tender and the government discourages its use. However, the government will look at the utilisation of Blockchain (a distributed digital technology that supports cryptocurrencies),” Jaitley said.
Finance Minister has repeatedly warned the people dealing in cryptocurrency would not get any legal protection.
In Telecom sector, the govt plans to set up 5 lakh Wi-Fi hotspots that will provide internet connectivity to five crore rural citizens in 2018-19. The government provided Rs 10,000 crore for creation and augmentation of telecom infrastructure in 2018-19.
Department of Telecom will support the setting up of indigenous 5G centre at IIT Chennai.
Meanwhile, customs duty on mobile phones was increased from 15 per cent to 20 per cent. The move will push foreign players towards manufacturing and sourcing components within India.
In the education sector, the FM said technology will play a major role in redefining India’s education system. It will be used to upgrade skills of teachers through the portal, Diksha.