‘Private Equity/Venture Capital committee to benefit ecosystem’

Hyderabad: Even though the union Budget did not make any major announcements for the overall startup ecosystem, some of the announcements that stood out include forming an expert panel for easing growth of Private Equity/Venture Capital investments and tax incentives for startups extending by one year.

The government on Tuesday announced to extend the period to avail tax incentives by one more year. To incentivise startups, the government had last year extended the eligibility for claiming tax holidays for startups by a year to March 31, 2022. It had also extended the capital gains exemption for investment in startups by a year to March 31, 2022 to boost funding.

“The only ray of hope in this budget is one-year extension of tax incentive to startups and apart from this, nothing worth mentioning is in the budget for startups,” says Sri Charan Lakkaraju, founder of Hyderabad-based startup Stumagz.

To attract investment from venture capital and private equity players, the government said it will set up an expert committee to address regulatory issues faced by the industry. KPMG India, emerging giants and startups, partner and national lead Amarjeet Singh said, “The new committee being appointed to look at regulatory and other challenges for PEs and VCs will increase the confidence of the community to look at India and its opportunities more favourably.”

Rupifi co-founder and CEO Anubhav Jain also added that the budget has recognized the fact that startups have emerged as a growth driver of the economy. “Incentivizing startups through measures such as extending the sunset date for eligibility for tax holiday by one more year will provide the required thrust to the ecosystem,” he added.

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