Indian startups have urged the government to introduce additional startup-friendly policies and rationalise taxes to enable spending on innovation, ease-of-doing-business, and reducing compliance costs. They are looking for policies to aid small businesses and empower entrepreneurs in the Union Budget 2022-23.

Harshil Mathur, CEO, and Co-founder of Razorpay, told IANS that digital payments have seen a substantial spike and in the upcoming budget the government should think of alternatives to the Zero MDR (merchant discount rate) policy to promote e-payments and drive significant digital adoption among businesses.

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He added that it would also be desirable for the government to increase contribution to the Fund of Funds for Startups (FFS). “Hassle-free loan disbursements, automation of tax and compliance, paper-less approvals, and incentives to adopt digital banking practices will also be welcome changes that can support the growth of MSMEs,” he told IANS.

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Mathur said that deferring tax payments when exercising  ESOPs, plus waiving tax for some ESOP receipts, will also be a welcome change in the  budget.

Ravish Naresh, CEO, and Co-founder, Khatabook, said he was hoping for a progressive Budget. New reforms, policy assistance, and support mechanisms for establishing a focused approach in solving unmet financial needs through technology will significantly benefit the economy.

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Focusing on augmenting offline MSMEs with online distribution could be a game-changer for economic transformation, said Vidit Aatrey, Founder and CEO of Meesho, as reported by IANS.

The government should focus on policies that will create a level playing field for offline and online sellers with less than Rs 40 lakh turnover, Aatrey told IANS.

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Simplification of GST compliance for online sellers will enable millions of small businesses to leverage the potential of e-commerce and contribute to India’s growing digital economy, he added.

Startups also expect the government to incentivise capital formation in the area of logistics and cold chains through policies and infrastructure development.

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Akash Gupta, Co-founder, and CEO of Zypp Electric, said that they are expecting some new initiatives to encourage local EV manufacturing, facilitate easy finance, and create an innovative EV ecosystem.

He urged the government to reduce GST on EV purchases and rentals from 5% to 2% as it would allow consumers to smoothly shift to EVs, reported IANS.

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According to a Nasscom-Zinnov report released last week, Indian startups raised a record $24.1 billion in 2021, a two-times increase over pre-Covid levels, while $6 billion were raised via public markets with 11 startup IPOs

The Indian tech startup base continues to experience steady growth as it added over 2,250 startups in 2021, which is 600 more than 2020.