Finance minister Nirmala Sitharaman on Monday presented the Union Budget for the fiscal year of 2021-2022. This year, the budget was aimed at boosting the economy which is reeling under the devastating impact of the coronavirus lockdown.
“This budget provided every opportunity for the economy to capture the pace it needs for sustainable growth,” said the finance minister as she tabled the government’s financial statement of the year.
Nirmala Sitharaman also said the budget stands on six pillars—health and wellness, physical and financial capital and infrastructure, inclusive development for aspiring India, to infuse new life into human capital, innovation and R&D, and minimum government and maximum governance. To help India’s startups amid the COVID-19 pandemic, tax holidays for these businesses have been extended by one year till 31 March 2022, said Sitharaman while presenting the Union Budget. “Tax holidays for startups extended by one year, till 31 March 2022,” said Sitharaman in the Parliament. The capital gains exemption given to startups was also extended by a year more. Although, there was no direct policy announced especially for AVGC sector but the initiative to help start-ups amid covid-19 will impact the gaming and technology startups too. Here’s how the industry reacts:
JetSynthesys vice-chairman and managing director Rajan Navani shared, “I’m happy to see the Union Budget 2021 is a forward-looking one, with massive spend commitment by the government across many sectors combined with large divestment and monetisation, along with the privatisation of two public banks and one insurance company. This is a great trajectory for banking in India. Also, the increase in FDI in insurance to 74 per cent with management control will help in attracting FDI from the world, further boosting the economy. I’m particularly excited about the government’s commitment to set aside an outlay of Rs 50,000 Cr for the National Research Foundation, the setting up of a new Fintech hub, and an allocation to incentivise digital payments.
Also, as we complete 75 years of independence, the move to exempt senior citizens over 75 years from filing tax returns if they are only on pension is a great tribute to their contribution to India. The budget also had a number of bold initiatives to simplify tax processes for businesses and honest tax-payers. The extension of the tax holiday and exemption of capital gains will also enable businesses and startups to focus on growing their business. Most importantly, the proposed use of data analytics, Artificial Intelligence and Machine Learning, optimising the Ministry of Corporate Affairs and tax portals, is indicative of the New India of 2022. I hope this forward-looking budget will help revive India’s economy, propelling it further towards a digitally empowered tomorrow.”
Octro CEO Saurabh Aggarwal said, “With the government proposing to provide tax incentives for startups and reducing compliances for one-person companies, we at Octro believe that the government’s decision will benefit start-ups and innovators in India. India is amidst a boom in digital technology adoption and the budget will help raise India’s economic footprint in the global scale and help create greater opportunities for companies to invest and develop services in the country”.
Pocket Aces VP of finance and operations Kunal Lakhara shared, “The Union Budget 2021-2022’s revised fiscal deficit estimate for FY21 which is pegged at 9.5 per cent of GDP seems promising, and has taken on a realistic approach that is focused on spends which are much needed to revive the economy. The tax holiday given to startups for an additional one year brings relief to enabling the sector to sustain and grow, as we recover from the pandemic. Furthermore, the move to encourage one-person companies without any restrictions is a step in the right direction. This will go a long way in encouraging more people to come forward to set up innovative businesses that solve the challenge of the day, and grow the high-potential startup ecosystem within the country.”
WinZO Games co-founder Paavan Nanda opined, “The measures announced by the government demonstrate its bullishness towards the startup ecosystem. The extension of long-term capital gains by another year will offer tailwinds to early stage funding. Extension of tax holiday by one year is also an encouraging offering, however, most of the new-age startups don’t start booking profits in the early years. The Budget’s focus on economic development, infrastructure and health will definitely put India back on the growth trajectory after an unprecedented past financial year.”
Mobile Premier League(MPL) co-founder and CEO Sai Srinivas shared, “Government’s budget announcement has been extremely encouraging for the start-up ecosystem in India. The extended exemption on capital gains for investments will definitely make more funds available for budding entrepreneurs and growing organizations alike. Digital payments infrastructure has played a very important role in the growth of the mobile gaming industry. It is very encouraging to see the government’s efforts to strengthen digital payments through incentivization. The Rs 1,500 crore boost will further support the migration of more people towards digital payments and will have a positive impact on the mobile skill gaming industry.
The incentivizing of one-person companies is especially heartening as it promotes the development of more game creators that will help in strengthening the gaming industry in India. The move has also allowed conversion of one-person companies to any other kind, reducing residency limit from 182 days to 120 days. India is at the cusp of creating a wave of mobile gaming unicorns, these measures only support that momentum. With these announcements acting as winds in our sails the Indian Gaming Industry can aspire to be the Global Hub of game development.”
VideoMeet founder and CEO Ajay Data shared, “The announcement regarding the startups was much required at the moment and will help the fledgling startups with meagre resources to continue with their business operations without worrying about the compliance with complex taxes. The announcement comes soon after Prime Minister announced setting up of Rs 10,000 crore fund for seed funding of startups. These moves by the government make the intent of government clear that it wants to promote entrepreneurship and help the enthusiastic young entrepreneurs in the country. The setting up of separate administration structure to promote ease of doing business is a laudable move by the FM. Also, as predicted startups were given importance under this budget, and the industry is poised to be greatly benefited with the Tax holiday extended by another year till 31 March 2022.”