Budget 2019 expectations: Start-ups demand investor friendly budget from Narendra Modi, Arun Jaitley
Line of credit is the major problem that start-ups are facing. The situation further worsens after the IL&FS crisis as NBFCs were the major source of lending for start-ups.
The Indian Small and Medium Enterprises (SMEs) the Micro, Small and Medium Enterprises (MSMEs) — who are together called start-ups— have demanded the Narendra Modi government to present an investor friendly budget to help emerging businesses to overcome the fund crisis. They said after the IL&FS crisis, funds for them have dried up as NBFCs have stopped funding for last few months.
Commenting over the matter Rajeev Chawla, Chairman, IamSMEofIndia told Zee Business online, "Line of credit is the major problem that start-ups are facing. The situation further worsens after the IL&FS crisis as NBFCs were the major source of lending for start-ups. Hence, I demand from the central government to make provisions in the budget that would make conducive environment for investors in the Indian markets."
Standing in sync with Rajeev Chawla of the IamSMEofIndia; Anindya Banerjee, Analyst at Kotak Securities told Zee Business online, "The government of India is facing huge pressure of fund as the lack Rs 20,000 crore in GST revenue generation. To pare that lack, they can either attract foreign investment or go for disinvestment. Since, disinvestment is a long process, budget looks a top source for the GoI to pare that GST loss else the fiscal deficit would go beyond the target of 3.5 per cent of the Gross Domestic Product (GDP)."
Agreeing with Anindya Banerjee's views Vijay Bobba, Co-founder at Wizely — a Bengaluru-based start-up told Zee Business online, "Entrepreneurship remains paramount to innovation driven growth. While India missed the bus on many of the technological innovations of the last few decades - aerospace, electronics, automotive, computing etc. I believe that there is tremendous scope for us to embark on the AI and ML innovation journey, that is expected to create new industries whilst disrupting existing ways of doing business. The Government can certainly play a big role here; from encouraging investments to conducive policy making."
Bobba of Wizley went on to add, "I hope that the government sets into motion, policies for reduced regulatory supervision to enable start-ups to thrive. I also hope that the government continues to promote the digital narrative for financial inclusion. We must also immediately seek the removal of policies that stifle progress such as taxing angel investments, thus making it easier for start-ups to get incubated."