Startups hail changes, say will help attract, retain talent

The budget proposal for the startups ecosystem, especially the one on tax on employees stock options (Esops), received a big thumbs up from the fledgling sector.

The budget recommends a five-year tax holiday on Esopss, a 10- year tax exemption for startups with under-Rs 100 crore turnover and also talks of a seed fund to push new businesses.

India is the third biggest startup ecosystem in the world and the government has been focused on pushing innovative startups through policy interventions for some years now.

"The finance minster has delivered a fantastic budget for startups. The measures announced on Esops, taxation and seed fund will infuse tremendous energy into the ecosystem," Indian Angel Network chairman Saurabh Srivastava said.

He said the commitment to having no harassment will also boost the confidence of entrepreneurs.

Restructuring the taxation on Esops is a great breather along with definition of turnover for scaled startups doing good work, said Paynearby chief executive Anand Kumar Bajaj.

"The ESOPs always has been a very strong mechanism for start-ups to incentivize, attract and retain high performing talent. The government proposal would allow startups to leverage ESOPs more effectively," trading platform Connect2India CEO Pawan Gupta commented.

Anuj Golecha, cofounder for the platform Venture Catalysts said the ecosystem has reasons to be satisfied with the budget announcements.

"A dedicated investment clearance cell for providing end-to- end facilitation and support including pre-investment advisory, information on land banks and quicker clearance of funds at the state-level will boost the entrepreneurship culture," he said.