Startups

Startups laud tax holiday to stay afloat amid pandemic, eco slump

Read more at timesofindia.indiatimes.com

Kolkata: The announcement on extension of tax holiday and exemption of capital gains tax in the Union budget is showing a glimmer of hope to several startups in eastern India which have been reeling under economic slowdown and lack of adequate funding.
Analysing the post-Budget condition of the startups, Rajeev Singh, director-general of Indian Chamber of Commerce (ICC), told TOI: “We have seen startups suffering from lack of demand for a niche product or service and mismanagement. Exemption of capital gains tax and extension of tax holiday till 2022 are motivating the investors to stay invested in profit-making startups. If a corporate giant invests in equity of a startup or purchases goods from it or avails of its services, they should get a tax relief.”
Speaking about the crisis, Alok Patnia, managing partner, ProfitBoard Ventures, said, “About 39% of our startups implemented salary cuts ranging from 21-30%. About 42% of our startups faced deal postponements from investors while 10-15% startups downed their shutters. One common trend that we have been witnessing among most of the startups is pivot. About 50% of our startups considered pivoting their business models to grab new opportunities.”
However, the growth trajectory of the startups in eastern India has been revived since the unlock phase. “Both startups and traditional retails were worst-hit during the pandemic. But things have started stabilising from the supply side while the demand has been consistently rising,” said Sourjyendu Medda, founder of the e-commerce startup, Dealshare.
Echoing the view of Medda, Ashish Gupta, co-founder & CEO, Bambinos, an ed-tech startup, said, “We have seen an uptake in demand in eastern India in the past few months and that is why, we are planning to focus on this region to gain a higher share.”
The business of traditional offline startups saw less growth during the lockdown and new normal phases.
Consider Kolkata-based Alfatech System dealing with 3D modelling and 3D bio-printing technology. “The pandemic hit us and some of our employees, who live in suburbs, could not join us until local train services resumed operations,” said Sumant Bhutoria.
The provisions stated in the budget, though, may not cater to the entire startup ecosystem, according to many startup owners and market experts, who think that while the Rs 945crore allocation for Seed India Fund scheme would be a good support base.
“Some changes were needed as compliance filing still remains a huge burden on this business sector,” said Abhishek Kumar, COO and co-founder of My Gate, a startup on security and community management that logged 70% growth in business over 2020 in Kolkata alone.

Read more at timesofindia.indiatimes.com

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