The Union Finance Minister (FM) Mrs. Nirmala Sitaraman has presented the Union Budget 2023 on Wednesday dated 01.02.2023- Budget of the Amrit Kaal for 2023-24.
The Budget has made several important proposals for Startups and Agriculture sector. The proposals are aimed at strengthening the Startup ecosystem and the agriculture sector.
India is a rapidly growing economy and is today emerging as a leader in innovation and entrepreneurship. Being the world’s fifth biggest economy in terms of GDP , India has the 3rd largest startup ecosystem in the world which is expected to witness YoY growth of a consistent annual growth of 10-12% which is aided by several government initiatives, favourable demographics and amazing speed of digitalization. The budget has proposed several measures such as Tax Holiday Scheme , Carry Forward and Set Off of Losses Funds for Startups, National Data Governance Policy to further help the start ups.
Several measures have been announced in the budget for accelerating growth of the agriculture sector alongwith making Indian agricultural produce more competitive globally and enhancing the incomes of the farmers. Some important measures as proposed are Agriculture Accelerator Fund, Digital Agriculture Infrastructure Scheme, Atmanirbhar Clean Plant Program.
The Key announcements on Startups and Agritech, are listed below:
A. STARTUPS
The Centre announced tax holidays along with many regulatory changes for Startups. They are listed below:
a). Tax Holiday Scheme
The Tax Holiday Scheme for startups has been extended for start ups incorporated till March 31, 2024, which was earlier available for startups incorporated till March 31, 2023. Now, even the start ups incorporated till 31st March 2023 can avail the benefits of certain tax measures , such as, relaxation on carry-forward, and set-off of losses etc.
b). Carry Forward and Set Off of Losses
The time limit for carry forward and set off of losses for startups has been increased to 10 years , which earlier was 7 years. For availing this benefit, the condition is that the shareholders who hold minimum 51% of the shares should continue to hold those shares.
c). Funds for Startups
As a part of the “Startup India” program, the government aims at providing funds/capital to the startups during different phases of a startup’s journey and business cycle. The various funds implemented under the Startup India program are :
a) The Fund of Funds for Startups (FFS) scheme
b) Startup India Seed Fund Scheme (SISFS)
c) Credit Guarantee Scheme for Startups (CGSS)
d). National Data Governance Policy
With a vision aimed at enabling access to anonymised data, the government will create a “National Data Governance Policy “.The National Data Governance Policy will also unleash innovation by startups and academia, the finance minister said. This policy aims to regulate the collection, storage, processing, and usage of data in the country. Access to anonymised data will be a tremendous help for start-ups
The FM also announced that three Centres of Excellence (CoEs) for artificial intelligence will be set up to enable ‘Make AI for India’ and ‘Make AI work for India’
e). Angel Tax
The budget has proposed to widen the scope of Angel Tax with effect from 01st April 2024 to include transactions involving non-resident investors. Till now, the scope of this angel taxation specifically included only residents. This change is aimed towards the government’s anti tax avoidance move. Private companies which issue shares for consideration higher than fair market value are subject to angel tax.
B. AGRICULTURE SECTOR
Following are the important announcements made in Budget 2023.
a). Agriculture Accelerator Fund
A new Fund called “Agriculture Accelerator Fund” has been set up by the government to support and encourage new startups and businesses. The Fund has been set up with a view to provide a forum for the farmers to share knowledge and to promote information and sharing new ideas in the sector.
b). Digital Agriculture Infrastructure Scheme
Under the “Digital Agriculture Infrastructure Scheme” the government has recommended an investment of INR 2516 crores to digitalize 63,000 main agricultural credit societies. This is with a view to widen the benefits of digital payments to the agriculture sector.
c). Atmanirbhar Clean Plant Program
The Government has launched the “Atmanirbhar Clean Plant Programme” for improving the value of the horticultural crops by providing the farmers access to disease-free planting materials and other amenities. The budget allocation for this new programme is Rs. 2,200 crore.
The programme will be under the ageis of the “National Horticulture Board”. With the aim ensure global competitiveness of Indian horticulture sector, the board shall set up Clean Plant Centres across the country to provide access to disease-free horticulture planting material for the farmers.
d). National Green Hydrogen Mission
The aim of this mission is facilitate demand creation, production, utilization and export of Green Hydrogen. The National Green Hydrogen Mission, which has been allocated Rs. 19,700 crores as a part of the national budget 2023. With an aim towards a cleaner and more sustainable future, this mission would help to facilitate the transition of the economy to low carbon intensity and reduce dependence on fossil fuel imports.
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About the Author: CA. RAJESH B. MANGLA rbmangla@gmail.com 9810059858 www.rbmanglaandassoc.com Fellow Member of the Institute of Chartered Accountants of India. A seasoned professional with verifiable year after year success in the field of Audits, Management Consulting, System Design and Controls, Due Diligence Reviews, M&A, ERP Implementation, MIS and Client Relationship Management and carries his core competence in accounting standards, audit procedures, internal controls and international accounting procedures including GAP accounting. He has vast experience in dealing with FCRA matters and has also been advising various NGOs (including Sec.8 companies) including those funded by International Funding Agencies. He has been practicing under the name & style of Rajesh B. Mangla & Associates, Chartered Accountants, New Delhi for over 25 years. He is member of ASSOCHAM, Empaneled with Ministry of Corporate Affairs (MCA) as Mediator/ Conciliator, Special Auditor for Delhi VAT Dept, Member Delhi University Court, Arbitrator- Cooperatives(Delhi Govt.) etc. Holds certificates in International Law and International Politics from "International Business Management Institute"-(Berlin) Germany.
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Posted on: February 9th, 2023
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