Budget 2023: Expectations from sectors of Indian Startup Ecosystem

Budget 2023

The Indian startup ecosystem has high expectations for the 2023 budget, which is to be presented by Union Finance Minister Nirmala Sitharaman. The “halwa” ceremony, which marks the start of the budget process, took place last Thursday and marks the first budget after a relatively pandemic-free year. Stakeholders in the startup ecosystem are hoping for stable and progressive policies to support their growth.

With a focus on tech-led innovations, the technology sector is looking for announcements to drive growth in the segment. The recent interest in AI and upskilling the workforce has also brought renewed focus to these areas. The government’s goal of a $5 trillion economy by 2024-25 has made it important for the budget to continue the momentum of growth from last year, which focused on jumpstarting investments and technology advancements after the pandemic.

Expectations from the 2023 budget range from easing taxation and licensing norms to supporting the tech sector. The budget is widely seen as a key opportunity to propel the growth of the Indian startup ecosystem and achieve the vision of a thriving digital economy.

#Budget2023: Expectations from VC Ecosystem 

  • Tax breaks for angel investors and VCs to incentivize investment in early-stage startups.
  • Parity of taxation on long term capital gains on private and public securities
  • Quick Clearance on Complinace for Investments after due diligence
  • Doing away with double taxation on ESOPs to encourage startups

#Budget2023: Expectations from Tech Startups

  • Increased focus on Emerging Technologies such as AI/ML, Data Science and Cloud
  • A strong push towards upskilling
  • Encouragement towards R&D Investments by providing Incentives
  • Offer to operate smoothly and financially feasibly at Special Economic Zones

#Budget2023: Expectations from FinTech Sector

  • GST Exemptions for Small Fintechs with a revenue cap
  • Tax benefits for serving the underbaked regions and population
  • Income cap-based Tax Incentives for P2P lenders
  • Allow for Asset-based lending
  • Enable defaults to be considered as Capital Losses and Bad-debt Write-offs
  • Simply the regulations for Co-lending
  • Extend the ESOP(Taxation reforms) Eligibility Criteria 

#Budget2023: Expectations from EdTech Sector

  • GST Exemption on supply of Goods & Services to Educational Institutions
  • Incentivise ESOPs with correlative structure like Shares
  • Attract addl. tax provisions for acceleration of Upskilling and Digital Education
  • Extend policy and regulatory support towards the EdTechs to Streamline and Formalize Operations

#Budget2023: Expectations from AgriTech Sector

  • Export Policy to evolve India’s Agri exports
  • Awareness policy and programs for farmers about Tech-driven and Sustainable models of farming
  • Reducing the legal burden and Number of licenses for AgTechs.
  • Digitizing the licensing process for AgTech Sector 
  • Service-based incentives for Industry by matching the realistic operations
  • Investments to support Logistics and last-mile connectivity

#Budget2023: Expectations from EV Sector

  • Extension of FAME subsidies towards EV Batteries and EV 3-wheelers
  • Policies for development and investments into charging infrastructure
  • Introduce policies to encourage domestic EV Manufacturing
  • Subsidize other EV Components with GST rates or Provide clarity


  • MSMEs are expecting revisions to existing MSME Act 2006 and Tax Relations followed by Credit changes.
  • MSMEs also asking for a quick shift towards complete online loans to make credit available easily.
  • The Expansion of Women Entrepreneurship Policy is also anticipated with Budget 2023.
  • Interest-free loans, Funds dedicated to women Entrepreneurs, Tax relaxations are some of the key expectations from Women Entrepreneur and Leaders.
  • Web 3.0 Startups are looking for the repeal of 1% TDS rule.
  • Web 3.0 leaders are also calling for Virtual Digital Assets to be classified under regulated Asset Class for feasible operantions.
  • Legal frameworks to boost the use cases of Blockchain.
  • The Gig economy sector is looking forward for a framework to formalize Blue and Grey-collar workers

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