New Delhi: With falling investments and failing startups, the startup world was hoping for the government to take away the main pain points of its industry. While a few concerns were addressed by the Finance Minister Arun Jaitley during his Union Budget speech in the Parliament, the larger issues seem to be left ignored.

While some are busy hailing the few positive moves, some are not happy with the complete omission of some of the major demands which the startup industry has been raising in the past year.

“Frankly, it is a disappointing budget. Nothing has been done with regards to ease of business or to remove the challenges faced by the startups. Reducing taxes is fine, but what about the losses and the removal of rules. There is hardly anybody who is making profits, the issue is how to handle the losses. The elephants in the room have stayed where they were,” says Seedfund Ventures’ Executive Director Shailesh Vickram Singh without mincing any words.

While the startup world had largely praised the Modi government’s intent to provide a fillip to the startup world through its Startup India plan, however, the interest has been waning and some feel that the Budget made plain the government’s inability to understand startups.

“The challenge in India is that the government has to learn to let go which they are not willing to. The best thing the government can do is to scrap the DIPP (Department of Industrial Policy and Promotion) but, it lacks the courage to do so. This budget seemed like a continuation of the UPA budget,” says Singh.

Notably, while many have praised the increase in tax holiday to startups however, this exemption is only valid for the DIPP recognised startups.

While the Budget has increased the carry over period for the much despised Minimum Alternative Tax, Angel Tax (India is the only country where early stage investments are taxed) did not even find a mention in the Finance Minister’s speech.

“I will say only 40% of the issues have been resolved. There is a considerable harassment that startups are going through in terms of tax notices being issued against them. A solution needs to be found for this. Angel tax is a big issue which needs to be remedied. It has become very important that the government meets all the stakeholders of the startup industry and takes a list of issues, once and for all. In a democracy, if a citizen makes a request the government needs to give an answer as to why they have not addressed that. They need to give a reason why these issues have not been addressed in the Budget,” says Tech Investor Mohandas Pai.

The rising din in the startup industry, however, is that the startup industry like IT industry will do better to fend for itself.

“The startup community does have some legitimate concerns regarding angel tax and MAT but, i think it is an ongoing dialogue and we have made representations. I think that startup ecosystem is not going to rely on sops from the government. Part of the magic of the IT industry was that it grew despite the government,” says Trifecta Capital, Managing Partner, Rahul Khanna while asserting that the government seems keen to listen.

Source: The Economic Times