Union Finance Minister Nirmala Sitharaman has taken strategic and effective initiatives for the growth and development of Indian startups. Sitharaman has demollshed  the wide use the  of Angel tax. The system of tax was started in 2011 under the UPA-II regime to check the laundering of funds.

Angel tax is one of the instrument to raise money but after the introduction investments or company in a venture capital undertaking were kept outside the ambit of angel tax. The industry was against this tax system because it cn be levied in any premium but need to be paid “fair market value”.

Commenting about the Abolision of Angel Tax,Anirudh A Damani -Managing Partner - Artha Venture Fund commented,"The removal of the angel tax will make it significantly easier for us to complete transactions faster and streamline the investment process. Previously, the requirement for income tax officers to understand and assess valuations led to unnecessary conflicts and delays, involving CAs, valuers, and tax officials. Valuation assessments were never meant to fall within the purview of income tax officers, and this change eliminates those complications. This simplification allows us to focus on our primary job—investing in and supporting innovative startups—without the burden of navigating through cumbersome tax regulations.

Delphin Varghese, co-founder and Chief Revenue Officer, AdCounty Media  mentioned that, the Angel Tax, levying up to 30.9% on investments far exceeding the fair market value, had stopped a lot of potential big investors. This decision will boost   the startup oriented schemes, and launched few programs to strengthen and boost domestic funds.

Ashish Singhal, Co-founder, Lemonn and CoinSwitch, said, “We welcome the Union Budget 2024-25 as a pro-development budget bringing great news for startups. As a founder and angel investor, I’m thrilled that the Angel Tax has been abolished. This will significantly bolster the entrepreneurial ecosystem in India.”

For MSME sector Sitharaman introduced Credit Guarantee Scheme, and in the MUDRA Loan. The limit of the quantity was  enhanced to 20 lakh from the current 10 lakh under the ‘Tarun’ category. During the crunch of MSME government will make credit support.

To develop the skill and create jobs, Twelve industrial parks under the National Industrial Corridor Development Programme. From the CSR fund, government will distribute 5,000 per month along with a one-time assistance of 6,000 for the Indian startups.

Apart from sharpening the edge of the skill of young minds, the budget will provide an incentive amounting upto   30lakh to make their footprints in Job market with 1 month PF contribution.

Neha Patil - Founder, Progen Ventures & Angel Investor said," Angel tax has finally been abolished by the Hon. FM in this year’s budget. This will help in the expansion of Angel investments in the country and improve the funding sentiment in a strong manner. In addition, the launch of a 1000cr space tech fund and support for startups in the vegetable supply chain will enable innovation in these sectors and bring good startups from these sectors to the forefront. Overall, the ecosystem is headed towards a positive trajectory."

Sitharaman also highlighted the contributions of tech based startups and told to strengthen the public infrastructure to support digitalization under the umbrella of ‘Viksit Bharat’.

To encourage the spirit of creating and innovating through research and development, she has increased the allocated fund from 840crore to 1200crore. Nirmala Sitharaman announced that the Indian government will establish a venture capital fund worth 1000 crore to boost the country's space sector.

Mahankali Srinivas Rao (MSR), CEO, T-Hub- “Budget 2024 marks a significant milestone for the Indian startup ecosystem, with initiatives that will undeniably foster innovation and growth. The abolition of the Angel Tax for all classes of investors is a pivotal move that will create a more supportive environment for angel investments, ultimately benefiting startups and paving the way for India to become a global innovation hub. The establishment of a 1,000 crore venture capital fund dedicated to boosting the space sector is another forward-thinking initiative. This substantial investment will propel growth in the space economy by supporting innovative startups and groundbreaking research, positioning India at the forefront of space technology and exploration. Moreover, the introduction of the Anusandhan National Research Fund and a financing pool of 1 lakh crore to spur private sector-driven research and innovation is a game-changer.

Prateek Maheshwari, Co-Founder of PW and Chair of the India EdTech Consortium (IEC) mentioned,"I appreciate the Budget 2024 announcements and see them as positive steps towards Viksit Bharat. The government’s focus on closing the skill gap is clear with five new schemes. One key scheme promotes collaboration between the government, academia, and industry to upskill youth by matching course content with industry needs and adding new courses for emerging demands. This is a crucial development, and the EdTech sector can play a big role in expanding this initiative across Bharat. For students who are not eligible under any scheme or policy, the announcement of a loan of Rs 10 Lakh to pursue higher education at any domestic institution is in line with NEP 2020’s vision of improving the Gross Enrollment Ratio of the nation and the government should also look at introducing academic performance-linked models of funding for Educational programs. Additionally, loans for skilling and schemes supporting women and girls will help harness the country’s demographic and gender dividend, boosting economic growth. However, it’s important to remember that the budget allocation is only part of the solution. The real challenge will be how all stakeholders come together and execute this to pave the way to larger economic progress."

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