Finance minister Nirmala Sitharaman held pre-budget consultations, meeting with stakeholder groups of new economy that is start-ups, fintech and digital sector.

Talking on behalf of the tech sector, Asish Agarwal, senior director & head-public policy of NASSCOM said the key focus is maximizing the advantage India has in terms of talent and its ability to scale up. We need to leverage it.

In terms of the suggestions they gave to the FM, he said, “For manufacturing, for new companies, the corporate rate of tax has come down to 15 percent. Given the fiscal constraints, in the special economic zones we can look at new services companies to be given 15 percent rate.”

The second suggestion was that since deep tech companies and start-ups in India need a push and there is challenge in terms of accessing capital, we can look at creating a deep tech fund. This fund could provide capital. "China, has been able to attract USD 8 billion worth of capital. India’s potential by 2035 is roughly that of a trillion dollar through deep tech start-ups,” he added.

The third suggestion was that of creating an innovation cluster where our engineering and R&D capabilities can be showcased. "So walk in with a design and walk out with a prototypes of design to manufacture innovation cluster,” Agarwal further added.

With regards to start-ups, he said one of the perennial issue has been around the ESOPs. "The taxation point occurs when you exercise the option. At that point of time there is no liquidity because the share is still not sold. Therefore, we would like the government to push this event of taxation where the liability has to be paid to a later date when the shares are actually sold. This will help incentivize the ESOPs itself.”

There are also a lot of the issues around ease of doing business that the startups face, which can be considered. For example minimum alternate tax (MAT). Startups are not exempt from MAT, which means the money that can go into R&D and investments, right now is being paid as MAT. said Agarwal.

The FM listened to ideas and was quite receptive, said Agarwal.