The Union budget of 2022 has been a mixed bag for the startup ecosystem. From health to education and agri tech, the government is keen to employ technology to build innovation-led ecosystems and is committed to the creation of a digital economy as India competes with top economies.

On the taxation front, the finance minister capped the long-term capital gains (LTCG) surcharge on unlisted companies at 15 percent, bringing it at par with listed peers. This has been a longstanding demand of the space and one that will encourage investments by high-net-worth individual (HNI) and will boost startups ESOPS.

Further, to deal with issues faced by venture capital and PE investors, the government intends to set up an expert panel. The budget also proposed to extend the eligibility criteria to avail tax incentives for startups by another year.

Additionally, to support pandemic-hit MSMEs meet their working capital requirements, the government will stretch the emergency credit line guarantee scheme (ECLGS) to March 2023 and increase its guarantee cover by Rs 50,000 crore.

Some of the other announcements have been on the creation of a blended fund through National Bank for Agriculture and Rural Development (NABARD) to finance agri startups for farm produce value chain, an open platform for the National Digital Health Ecosystem, a battery swapping policy to encourage the shift to EVs and the ‘Drone Shakti’ programme to push drone-as-a-service.

Ed-tech and e-learning also got a boost with the expansion of the PM e-vidya scheme and the big one -- a 30 percent tax will now be levied on digital assets such as cryptos.

Startup Street spoke to Mughilan Thiru Ramasamy, Co-Founder, and CEO of Skylark Drones; Pallavi Shrivastava, Co-Founder of Progcap; and Arjun Choudhary, Founding Member and CBO of MFine to discuss the impact of the budget on the startup economy.

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