India’s startup ecosystem, being the third-largest and one of the fastest-growing globally, has become integral to the country’s economy and overall development. India’s startups have overcome several hurdles through constant innovation, quickly adapting to changing scenarios, and leveraging cutting-edge technology. Perhaps, the best example for this would be the past two years since the onset of the COVID-19 pandemic.
Although the crisis truly tested their mettle, most startups rose to the occasion by realigning their strategies and building innovative solutions to operate seamlessly, thereby driving business growth.
However, after nearly two years since the pandemic began, the startup community, although it having received substantial support from the government, sought further assistance to help revive business to pre-pandemic levels.
So, naturally, as the Union Budget 2022-2023 approached, the entire startup ecosystem’s attention turned to Finance Minister Nirmala Sitharaman, eager to know about policy reforms/introductions. And it’s safe to say she didn’t disappoint.
Here’s how this year’s budget will benefit/impact the country’s startup ecosystem, especially those in the logistics space.
‘One station one product’ PM Gati Shakti
The pandemic has indisputably proven the need for efficient, streamlined logistics and bolstered logistics infrastructure to allow industry players to ship goods sans delays or damage.
Considering long-term sustainable improvements that will benefit the logistics industry and the entire startup ecosystem, including D2C businesses, ecommerce/social commerce platforms, etc, the ‘One station one product’ policy announced under the PM Gati Shakti plan will assist in bolstering the supply chain of local products. This will also enable the country to achieve its goal of becoming Aatmanirbhar Bharat by boosting procurement from local players/producers.
Additionally, the PM Gati Shakti plan will also significantly reduce logistics costs, which is currently a major challenge for logistics platforms as well as MSMEs and D2C businesses while positively impacting the prices of essential items. These are but a step towards a larger plan – multi-modal logistics.
A transformative approach for sustained economic growth, the PM Gati Shakti plan will facilitate efficient multimodal logistics, including the expansion of roads, railways, airports, seaports, waterways, etc for robust logistics infrastructure. As a part of the multi-modal logistics plan, the above-mentioned will make for increased efficiency in the movement of people as well as goods.
Furthermore, the proposal of a revamped unified logistics interface platform will allow seamless and secure data exchange between logistics operators and access to real-time information. For businesses in the aggregator space, this infrastructure development will enable them to create efficient, frictionless end-to-end logistics.
Tax incentives and digitisation
Understanding the need for assistance post the startup ecosystem’s commendable work amid the pandemic, the Finance Minister announced an extension period of up to a year for startups to avail tax incentives.
This much-needed move has been welcomed and appreciated by the entire startup community as it will help them boost business quickly, bringing it back to or driving it well beyond the pre-pandemic levels.
Apart from this, the government has strongly emphasised the need to bolster digitisation in the country, especially on the payments front. Now, digital payments have seen skyrocketing adoption since the pandemic’s onset, but increasing this further will go a long way in assisting small businesses and startup founders who are just commencing their business. On a larger scale, greater adoption of digital payments with strong infrastructure will equal better financial inclusion.
An overall positive sentiment
While the Union Budget did have some misses, the overall sentiments of the startup ecosystem continue to remain positive. With several people addressing it as the “Budget for Digital India,” it’s safe to say that the slew of proposals and policies will open new avenues and plenty of opportunities for startups to leverage and keep the momentum going.
All in all, the 2022-2023 Budget proved the government's commitment to nurturing the development of startups. If the aforementioned startup-friendly policies are implemented effectively, there will be no stopping the ecosystem’s progress in the coming years.
Edited by Kanishk Singh
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)