Startups get boost in Budget 2013

Encouraging the innovation ecosystem in the country, finance minister P. Chidambaram in his Budget speech on Thursday said that funds provided by the corporates to academic incubators will qualify as part of the corporate social responsibility. This move by the finance minister will enable incubators to have access to a wider pool of funds. These incubators set up in engineering colleges like the IITs, NITs and other institutes like IIIT-Hyderabad are largely dependent on the government funds to invest in start-ups that are incubated at these centres. Given that the new Companies Act mandates firms to set aside two per cent of their profits for CSR activities, these institutions that house tech incubators will gain from the proposal.  According to Ramesh Loganathan, vice-president, products and centre head, Progress Software, linking academic incubators with CSR is a “very smart move.”

- iitian.me

– iitian.me

“This not only means that you’re supporting start-ups but also bring in a social change,” he said. Giving wings to angel investors was the announcement that the angel investment would be tax-free. “Initially, we were nervous about angel investment being taxed. In that case, even start-ups would be hesitant to take money from angels. This Budget has clear those apprehensions,” said Murali Bukkapatnam, TiE Hyderabad president. Prasad Pingali, cofounder. veeoz.com and member of tech incubator at IIIT-Hyderabad, said the government is acting as a catalyst to make big corporates part of the start-up ecosystem. “Because investing in start-ups needs high-risk appetite, exempting angel investments from tax is a breather,”  he said. Commenting on the proposal to permit SMEs including start-up companies to list on the SME exchange through informed investors, Mohan Gandhi, CEO of Entersoft Inc, said: “This would provide the financial strength to young firms. It would also give confidence to angel investors, PE funds and venture capital funds to invest in start-ups.” 

-DC

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