Union Budget 2016: Decisions and reactions

The Union Budget didn't do much for consumer technology this time, but startups have something to look forward to.

By Sameer Mitha Published Date
29 - Feb - 2016
| Last Updated
01 - Mar - 2016
Union Budget 2016: Decisions and reactions

The Union Budget 2016 was presented to the public today and while it doesn't do a lot for the consumer technology market, there are some provisions for startups and digital literacy. Here's summing it up..


With the Startup boom hitting India, Finance Minister Arun Jaitley announced that the government will update the Companies Act to ensure a conducive environment for start ups. The government plans to ease the process of registration. The government also hopes to achieve a one-day registration completion.

Industry reactions:

Commenting on the occasion, Anurag Avual, Founder and CEO, Shopmatic said, “It takes a lot of time and effort into running and building a successful business. What is great to note is that a bill is being introduced for ease of doing business and to enable registration of companies in a day, will certainly ease the process. In totality we are quite pleased with the startup and entrepreneurial announcements, specifically the Special Patent Regime proposed to power innovation and research that we believe will nurture and mentor the next wave of tech stars that will drive a successful economy.”

Vinod Murali, Managing Director, Innoven Capital said, “Given the enormous debt burden on Indian corporates, measures which help in improving overall credit health of the economy are welcome and the Finance Minister’s move to hold the fiscal deficit targets at prior levels despite pressure to allow for growth, should be commended. This was not a budget with high expectation of drastic reform and many of the announcements have been tactical or to improve efficiencies. There is more sensitivity to entrepreneurship which is a good start but this area needs more attention in the years to come.”

Vikram Oswal, Founder, Woozoe said, “When it comes to Start-ups, in my opinion, exemption of tax from these companies for 3 years will provide a good boost to many start-ups as when a company begins to grow it needs a huge amount of financial support. With the tax exemption, a startup can look at focusing more on its growth without worrying about taxation.”

Digital Literacy

Moving on to Digital Literacy, the government has announced that it aims to cover about 6 crore houses in rural areas in the next three years. There is also a unified e-portal for agriculture. For power consumption, the minister announced it will be distributing LED bulbs.

Industry Reactions:

Pradeep Singh, CEO and Co-founder, Vidyanext Said,

"While the budget has welcome initiatives to increase educational reach across the spectrum, what is missing is an action plan to simultaneously improve learning outcomes. One solution is to help teachers become more effective by giving them easy-to-use technology tools that help students learn better. This will serve the twin goals of improving learning outcomes while simultaneously ensuring digital literacy for the new generation.”

Spectrum prices being high has been an issue with telcos for some time now and it looks like the pricing is only going to go higher. FM Arun Jaitley today announced that the government’s plans to levy service tax on spectrum auctions. 

Kenny Ye, MD, UCWeb India said, “Finance Minister Arun Jaitley has presented a well-rounded and constructive budget, focusing on most critical aspects of the economy. Thrust on farm sector, increased spending on rural development and infrastructure planning shows that this government means business. The record digitization plan outlined is another major positive. The new digital literacy mission scheme will cover 6 crore additional households and bolster employability of rural youth. There is also the much-needed thrust on entrepreneurship training, higher education and skills development that will help make India a knowledge base. While the reduction in corporate tax is welcome, it is applicable only to select companies and is a minor negative. Measures to reduce tax hassles and address disputes, on the other hand, are a positive. Tax exemption for Start-ups, amendments to Companies Act and allocation for Stand-up India scheme will further aid cost and ease of doing of business in India.”

Nigel Eastwood, Group CEO- New Call Telecom said, “Overall I would view this budget to have a positive push to industries across the board. This budget focuses clearly on growth, development and job creation with particular focus on start-ups by giving them support via exemptions for 3 out of 5 years.  With government initiatives like National Digital Literacy Mission for Rural Households and Stand Up India Scheme in place, these will help boost the startup scenario for the SCs, STs women entrepreneurs as it will help reach out to these under-served sectors of the population by facilitating digital technologies for consumers and markets. This is a balanced growth oriented budget with focus on accelerating on the fundamentals.”

Sameer MithaSameer Mitha

Sameer Mitha lives for gaming and technology is his muse. When he isn’t busy playing with gadgets or video games he delves into the world of fantasy novels.