With only a few weeks till the Union Budget 2025, companies across the country are once again looking to the Modi 3.0 administration to streamline policies and drive growth. Startups are searching for measures that will foster innovation, make capital more available, and create a more favorable business climate as the economy demonstrates both resilience and challenges. What the Indian startup community should expect from the next budget, which Finance Minister Nirmala Sitharaman will present to the Indian Parliament on February 1, 2025, is as follows.

Ease of Conducting Business

Despite Prime Minister Narendra Modi's repeated statements that the country's economic environment has improved during his rule, considerable hurdles remain. Startups, particularly in the manufacturing industry, must go through hoops to gain basic approval or license. The government may make things easier for early-stage companies by lowering compliance requirements.

A side from citizens expecting reduced personal tax rates, startups seek a simpler tax system that reduces compliance expenses. This includes extending tax rebates, lowering corporate tax rates, and streamlining the procedures for deducting and carrying forward losses.                          

Infrastructure Development

Infrastructure Development Research and development requires significant cash and infrastructure investment. To maintain investment in the region, the government should work to develop its infrastructure. Creating startup centers with cutting edge facilities, co-working spaces, and quick access to essential services can significantly reduce operational costs while encouraging innovation and growth.

With artificial intelligence (AI) being the buzzword, the Indian government has the opportunity to get on board and make major progress. According to the Economic Times, the Union Budget 2025 should foster innovation and growth in the country's digital economy, which is estimated to be worth USD 1 trillion by 2028.          

Following tremendous growth during the COVID-19 pandemic, edtech companies have struggled to maintain their momentum. The business will be searching for potential tax benefits, particularly in the form of GST exemptions for impoverished students and GST discounts on educational goods and services.                   

Intellectual Property Rights.

Startups ask Ms Sitharaman to give better Intellectual Property Rights (IPR) support, such as faster patent processing, lower startup fees, and more IP education tools.

 

Access to Credit

It is vital to increase credit availability, particularly for MSMEs and startups, through initiatives like the Credit Guarantee Scheme for Startups (CGSS). This would allow entrepreneurs to expand their companies without the need for high-interest loans.