The slew of booster measures by the government will “positively impact” start-ups in the country, especially in sectors like social infrastructure, atomic energy and space exploration, by providing these fledgling organisations with a larger playing field and improving ease of business, according to Indian Angel Network.
As part of the Rs 20-lakh crore financial package announced by Prime Minister Narendra Modi, the government has announced a number of initiatives to help various sections of the society, including MSMEs, migrant labourers, farmers and entrepreneurs.
“The FM has made some key announcements that stand to positively impact the start-up ecosystem.
These range from the policy changes aimed at improving GST, Direct Benefit Transfer, and ease of doing business to expanding the playing field for startups across sectors such as power distribution, social infrastructure, atomic energy, and space exploration, among others,” Indian Angel Network (IAN) co-founder and Chairman Saurabh Srivastava told PTI.
He added that IAN is hopeful that the government will take more of such relief measures in the near future to enable the start-up ecosystem to play a crucial role in driving the nation towards becoming a self-reliant economy.
On May 13, the government introduced the first set of measures aimed at helping MSMEs by providing collateral-free automatic loans and equity infusion via a Fund of Funds for such businesses, as well as revision in the definition of such enterprises. This had drawn a mixed response from the start-up community as many believed the package will benefit start-ups, even as others disagreed.
Finance Minister Nirmala Sitharaman on Saturday clarified that start-ups were eligible for the measures announced for MSME.
With businesses seeing significant impact due to the COVID-19 pandemic, many start-ups have frozen hiring, slashed salaries and laid off people.
To give relief to companies defaulting on loans due to the COVID-19 stress, Sitharaman on Sunday said no fresh insolvency will be initiated for one year under the Insolvency and Bankruptcy Code, while the minimum threshold to initiate insolvency proceeding has been raised to Rs 1 crore from Rs 1 lakh to benefit MSMEs. Besides, coronavirus-related debt will be excluded from definition of default.
“We welcome the decisions taken by the Government of India today (Sunday) to raise the minimum threshold to initiate insolvency proceedings from Rs 1 lakh to Rs 1 crore which will help insulate MSMEs to a great extent. Additionally, the move to not have any fresh insolvency proceedings for up to 1 year will provide businesses a reasonable amount of time to get back on their feet, in a post-COVID scenario,” Kishan Jain, director at Goldmedal Electricals, said.
He added that the provision will allow MSMEs to “reorganise themselves and put in all their energies towards further growth and expansion”.
For the education sector, the government said PM eVIDYA, a programme for multi-mode access to digital/online education, will be launched immediately. Manodarpan, an initiative for psycho-social support for students, teachers and families for mental health and emotional well-being, will also be set up.
Edu-tech company upGrad co-founder and MD Mayank Kumar said offline education has taken a massive hit since the closure of schools and institutions was imposed in mid-March in wake of the COVID-19 pandemic.
“The push from the government to online education will further drive everyone to get accustomed to e-learning and with SWAYAM PRABHA DTH, within a short period of time, everyone across the country will seamlessly have access to all educational content,” he added.
The government has also decided to allow private sector to use ISRO facilities and other relevant assets to improve their capacities. Liberal geo-spatial data policy will provide remote sensing data to tech-entrepreneurs across various sectors.
This move is expected to help start-ups leverage these technologies to develop cutting-edge products in the country, in line with the government’s vision of ‘Aatmanirbhar Bharat’.
Moneycontrol Ready Reckoner
Now that payment deadlines have been relaxed due to COVID-19, the Moneycontrol Ready Reckoner will help keep your date with insurance premiums, tax-saving investments and EMIs, among others.
Moneycontrol Virtual Summit presents ‘The Future of Indian Industry’, powered by Salesforce
Register Now! and watch industry stalwarts forecast how India Inc will shape up in post COVID-19 world
Date: May 19