“The recently announced Union Budget for 2016-17 holds a lot of promise, especially for the country’s burgeoning start-up segment. The move to enable Registration of Company in one day for start-ups is extremely welcome, as it will cut through the bureaucratic red tape and will help in streamlining the process of start-up inception. Under the budget, start-ups will also get 100% tax exemption for 3 years, except the minimum alternative tax which will apply from April 2016-2019 for creation of jobs. This will nurture a more vibrant start-up ecosystem, whilst at the same time also providing a massive boost on the employment front.
From the perspective of someone associated with the automobile industry, certain announcements in the latest budget – such as SUVs and luxury cars becoming more expensive, introduction of a 4% high capacity tax for SUVs and an additional service charge of 1% being levied on the purchase of luxury cars over INR 10 lakhs – may dampen the recent enthusiasm surrounding the automobile market. Since increased taxes cover almost all car segments such as petrol/diesel/SUV, there could be a reduction in the sale as compared to previous years. On the other hand, this might just encourage Indian consumer to adopt more eco-friendly alternatives when purchasing vehicles. We are expecting the manufacturers to provide more vehicle options in alternative fuel and EVs in the near future to adapt to this change in market dynamics and to capture the maximum share of the Indian automobile market.
The much-awaited amendment in the Motor Vehicle Act in the passenger vehicle segment, however, is expected to drive more innovation in the automobile segment. While the details are still to be rolled out, we are expecting progressive changes that can ease the transfer of ownership of vehicles and reform the massive, booming used car space.
Moreover, it seems the government is actually walking the talk as far as supporting entrepreneurship in the country goes, and looks set to invest heavily in skills development. The Finance Minister, Mr. Arun Jaitley, has announced that entrepreneurship training will be provided across schools, colleges and massive online courses, and has also earmarked a corpus of INR 1700 crore for creating 1500 multi-skill development centres. The objective of this move is to skill 1 crore youth in the next 3 years under the Prime Minister Kaushal Vikas Yojna in order to provide skilled workforce to support the country’s growing start-up landscape. We welcome this move by the government to launch initiatives built around start-up growth and skills development, as it will lead to the creation of more jobs and will also increase the number of skilled professionals actively contributing to the continued growth of the Indian economy.”