Budget 2023: Govt likely to introduce measures to strengthen start-up ecosystem

Union Budget 2023: Finance Minister Nirmala Sitharaman is expected to announce in the forthcoming Budget steps to further strengthen the startup ecosystem in the country and address inverted duty issues in certain sectors to promote domestic manufacturing, official sources said. The government has prioritsed the start-up sector and introduced several measures in the last few years.  

Fiscal incentives under the production linked incentive (PLI) scheme to some more sectors are also likely to be announced in the Budget, which will be presented by the Finance Minister on February 1. 

In a recent interview with Zee Business, Dr. Bhagwat Kishanrao Karad, Minister of State in Finance Ministry, said that the start-up and medium and small enterprises (MSMEs) have created nearly 6 crore jobs in the past years, and thus, the government is likely to introduce more schemes to strengthen the sector. 

The government may consider providing funds to infrastructure projects approved by the Network Planning Group (NPG), constituted under the PM Gati Shakti initiative, sources in the finance ministry said. 

Prime Minister Narendra Modi had launched the Gati Shakti National Master Plan in October 2022, with an aim to develop an integrated infrastructure and reduce logistics costs. 

The NPG comprises various connectivity infrastructure ministries/ departments involving their heads of network planning division for unified planning and integration of the proposals.  All these departments need to approach the NPG first for approval before making a DPR (detailed project report) at the planning stage. 

Inverted duty structure refers to the taxation of inputs at higher rates than finished products that result in the build-up of credits and cascading costs. 

The government has already taken a series of steps to promote startups in the country, which include schemes like the Startup India initiative, the Fund of Funds for Startups (FFS) scheme, Startup India Seed Fund Scheme (SISFS) and Credit Guarantee Scheme for Startups (CGSS) are implemented to provide capital at various stages of the business cycle of a startup. 

The government had launched the Startup India initiative in January 2016 with the intent to build a strong ecosystem for nurturing innovation and encouraging private investments in the startup ecosystem. 

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