The overall mood created by the budget presented by Finance Minister Arun Jaitley is positive. Several measures announced like leaving the choice of Provident Fund to employees, the Rs. 1,000 crore allotted to start-ups and many such decisions will have a long-term positive impact on the country’s economy.
However, the fine print of the budget has to be seen for understanding the nitty-gritty of the various decisions announced by the Government.
However, the budget has not done enough for the start-up ecosystem. The Budget has not talked about the Rs. 10,000 crore Venture Capital Fund that it announced in a grandiose manner in the July 2014 Budget.
It is not clear if the Rs. 1,000 crore allotted to enable IT start-ups is part of that Rs. 10,000 crore. The Government’s plans o encourage start-up culture and budding entrepreneurs is not reflected exactly in the budget. The mechanism to support self-employment to support all aspects of start-up businesses should have been outlined more clearly to take encourage young entrepreneurs and enthusiasts.
The increase in service tax to 14 per cent is surely a burden, especially on small enterprises and start-ups. Of course, while most of it would be encompassed by the Goods and Services Tax, the Government should have announced some steps to provide relaxation to certain services with a specified threshold limit to ensure that the burden is eased initially.
As it is, service tax is perceived to be an additional burden and it is transferred to the end-user.
Reduction in corporate tax from 30 per cent to 25 per cent is a welcome decision.
