The pandemic-hit 2020 was the year full of challenges for health, economy and livelihoods for many. The area which saw a major boom in the year before 2020 – start-ups – took a major hit following the slowing of the economy in the times of COVID-19. To help the sector, the Centre has extended the tax holidays for the small businesses by one year till March 31, 2022.

“Tax holidays for startups extended by one year, till 31st March 2022,” said Finance Minister Nirmala Sitharaman while presenting the Union Budget 2020-2021 in the Parliament on Monday.

The Finance Minister said that the “definition of small companies under Companies Act 2013 is to be revised. Companies with paid-up capital up to Rs 2 crore and turnover up to Rs 20 crore will fall under small companies, benefiting more than 2 lakh companies in compliance required.”

To further boost the sector, the government has decided to “incentivise incorporation of one-person companies” and these companies will be allowed to grow “without any restriction on paid-up capital or turnover and to convert into any other type of company at any time.”

Also read: Investors, India Inc sigh in relief at absence of new levies, growth push

The move was welcomed by the industry. “It’ll help bring scale, job and growth. Manufacturing companies need to become an integral part of the supply chain and the government is gearing up to support the economy for sustainable growth. This is a much-needed stimulus to boost demand and consumer confidence,” says Bala Sarda, Founder and CEO , VAHDAM, a consumer brand in food and beverages.

Puneet Gupta, the Founder and CEO of Astrotalk, told Opoyi, “The union budget 2021 has laid a strong framework for a quick economic revival.”

“The core areas of development have been given significant consideration. Massive increase in the healthcare budget shows the government’s intent towards preparing the nation for future risks,” Gupta said adding that “Greater allocation on Infrastructure development is going to have a multiplier effect in the economy.”

Apart from start-ups, the finance minister’s budget has doubled the country’s healthcare spending to Rs 2,23,846 crore. An additional 35,000 crore would be spent on Covid vaccines. Capital expenditure will be increased to Rs 5.54 lakh crore, which is around 34% higher than last year.

Presenting the budget, Finance Minister Sitharaman said the Budget was prepared in circumstances like never before and that the government was fully prepared to back and facilitate a reset of the economy.