Budget 2023: ‘Faster regulatory policies for startups are the need of the hour’

According to a recent Deloitte Budget Expectations 2022 report, GDP growth in FY2023 is predicted to be between 5.5 – 6.1 %. India in 2023 will face challenges in terms of balancing the disparity between a rebounding domestic economy and receding global demand. With India being the world’s 3rd largest startup hub, founders operating across education, hospitality, FMCG and AI share pre-budget expectations for 2023-24 to ensure an optimistic business and entrepreneurship ecosystem.

Ramit Sethi, Founder, Seclude, which Operates Luxury “Branded Homestays & Villas” across India. The present GST rate for Homestays is graded at 12% to 18% based on room tariffs.  “This should be singularly made into 12% across all room rates to promote homestay and boutique property ecosystem which is a fast-growing category within the hospitality industry. The licensing of Homestays and Resorts should be made simpler, with a single-window system be created to promote ease of doing business. We also recommend that there should be incentives given to homestays which hire local staff in terms of ESI/ EPF benefits.”

Ramya Yellapragada, Co-founder & CEO, Neuracle Health said that Neuroscience and AI-focused mental health startup building a wearable medically certified device for Depression, and a digital health solution to manage Mental Health conditions better. “WHO predicts that by 2030, overall spending on Mental Health will cross the combined spending on cardiovascular disease, cancer, and diabetes. Total spending on lifestyle and chronic diseases will touch approximately USD 18 trillion. Today more than 80% of Medical devices are imported, mainly from China, and have long regulatory cycles of upto 8-12months minimum, which is killing Indian startups and innovation. Faster regulatory policies for startups are the need of the hour, similar to how the US set up a Breakthrough Devices Program via the US Food and Drug Administration. Digital Health programs have the potential to be a game-changer and are a cost-effective method of managing and in some cases reversing lifestyle conditions. Their inclusion under GoI medical insurance scheme, Ayushman Bharat will encourage private players to adopt it as well. In 2022, 94% of the Mental Health Budget, went to just two Tertiary care hospitals - NIMHANS and Lokpriya Gopinath Bordoloi Regional Institute of Mental Health. The remaining 6% went to the National Mental Health Programme which caters to 90% of cases. In the present budget, GoI needs to have a more equitable distribution for the Mental Healthcare budget, or launch programs to incentivize collaboration with startups and accelerate innovation.”

Dr Amit Sata is Associate Dean, of Innovation and Entrepreneurship, Marwadi University and Heads the Marwadi University Innovation and Incubation Research (MUIIR) Center, set up to create a conducive start-up ecosystem fostering industry-academia connect. Sata said that according to the Ministry of Commerce & Industry, India imports more than 17,000 commodities worth of USD 475 billion in FY 2022-23 (till January 2023). “At the same time, more than 88,000 start-ups are recognized with DPIIT since the startup India initiative was launched in 2016. However, startups that contribute directly to the Indian economy by reducing imports are observed to be very rare. Taking that into account, especially in the domain of aerospace, biomedical, defence, and semiconductors, the government should set up a mechanism to disburse zero collateral loans of upto INR 5 crores and provide tax exemptions for up to 5 years, to promote indigenous innovation.”

Anika Parashar, Founder & CEO, The Woman’s Company which produces Eco-friendly feminine hygiene products. Parasher said that with Women’s wellness and health becoming mainstream there needs to be a relaxation of taxes on essential wellness products. “The Union Budget must emphasise Women's wellness, especially menstrual hygiene. We do have tax exemption on sanitary pads and that does help. However, this could be extended to manufacturing and production which will further make sanitary products accessible to a wider range of women from different socio-economic groups. Besides this, decreasing import duties for raw materials could bridge the gap between supply and demand. This will also encourage more Indian manufacturers to start manufacturing biodegradable pads in the country.”