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Union Budget 2021 To Redefine The Growth Trajectory Of The Indian Economy In The Post-Pandemic World
The COVID-19 pandemic has reaffirmed the significance of startups for exemplifying out-of-the-box thinking, creativity and innovation.
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The first paperless Union Budget 2021-22 had evinced keen interest as the startup ecosystem tries to redefine its trajectory in the post-pandemic era. Over the years, startups have emerged as the new torchbearers of the Indian economy. As per the statistics, there are approximately 40,729 startups in India. A spate of policy initiatives such as revisiting the definition of startups, simplifying regulations, providing income exemptions, and setting up 'Fund of Funds' has had a multiplier effect in terms of catalyzing entrepreneurship, generating employment, and giving a fillip to innovation besides encouraging the growth of startups.
Bolstered by a conducive policy landscape, the startup ecosystem has leapfrogged the traditional growth patterns to burgeon into the third-largest in the world, encompassing 38 unicorns. The COVID-19 pandemic has reaffirmed the significance of startups for exemplifying out-of-the-box thinking, creativity, and innovation. The disruption of the global supply chains catapulted the Indian startups to the scene and emboldened the clarion call towards Aatma Nirbhar Bharat. Despite the majority of 2020 being marred by COVID-19, the year witnessed the emergence of 12 new unicorns and attracted investment to the tune of $11.5 billion, according to an estimate. These achievements are a testimony to the agility and resilience that will be key to the survival of businesses in the post-pandemic world.
The Year 2021 also began a positive note for Indian startups with the government earmarking INR 945 crore for Startup India Seed Fund Scheme. The Union Budget marks a continuation of government efforts to handhold startups until they reach maturity. The Budget takes cognizance of the significance of infrastructure in the shaping of economic trajectory and prioritizes its growth. The large scale infrastructure projects such as the Delhi Mumbai Industrial Corridor and Dedicated Freight Corridor will create an enabling framework for the growth of startups.
Riding on the wave of infrastructural developments and push by respective state governments, the Tier 2 and 3 cities will emerge as the next frontiers. Incentivizing the emergence of One Person Companies (OPCs) by no restriction of paid-up capital and allowing the conversion into any type of company will further provide an impetus to entrepreneurship, especially in Tier 2 and 3 towns. The extension of the tax holiday till March 31, 2022, will boost sentiment aid towards the paradigm shift from 'job seekers to job creators.' Allocation of Rs.50,000 crore for the National Research Foundation for the period of five years will further boost the startup ecosystem to innovate and create cutting-edge technology products for all sections of society.
2021 witnessed a milestone with the first presentation of the paperless budget in history that clearly indicates that digitization will be the formidable undercurrent in the startup ecosystem in the coming years. The announcement of the launch of data analytics, AI, ML-driven MCA 3.0 version, and an e-court system as a special framework for MSMEs underscores the government's commitment to spur digitization to enhance the ease of doing business and propel Indian startups. The establishment of the National Language Translation Mission by the government is a much-needed step towards the availability of regional content over the internet, making accessibility & inclusion of government services and schemes to the last person in the queue.
The interplay of technology, policy reforms, and initiatives and digitization presents an exciting time for Indian startups. The Union Budget is a step forward to propel the Indian economy onto a higher growth trajectory. While much will hinge on the on-ground implementation of the policies, the Union Budget has made a significant leap to bolster the startup ecosystem.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.