Angel tax abolished in budget to boost startups

The Government of India has announced the abolishment of the Angel Tax and also introduced paid internship programs in the first Union Budget of 2024 during its third term. The Mudra loan limit has been hiked to ₹20 lakh, ₹1 lakh crore has been given to the Anusandhan National Research Foundation, a vision which will increase five times in five years, with a ₹1,000 crore Venture Fund for space startups. All these efforts put together will ensure that the startup ecosystem in India is strengthened.

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It had, in its agenda, nine priority areas related to boosting startups, generating employment, and Skilling for Modi’s third term. This became the first budget since the administration came into office.

Job Creation and Skilling

Employment and skilling retained the centre stage as the Minister announced a package of five schemes for generating opportunities for 4.1 crore youth over the next five years. The Minister explained that the first scheme under the PM’s package would provide one month’s wage to all those entrants in the workforce.

One of the big-ticket announcements was a plan for a five-year comprehensive scheme for internship and apprenticeship opportunities in the top 500 companies for 1 crore youth. In this line, the government envisions instilling a culture of skilling and apprenticeship, with almost 20 lakh youth expected to be skilled during that period. Another 1,000 Industrial Training Institutes will also be upgraded in a hub-and-spoke arrangement under a collaborative effort with state governments and industry for skill development.

The Model Skill Loan Scheme is going to be revamped to provide for loan guarantee cover to loans up to ₹7.5 lakh, thereby benefiting about 25,000 students every year to pursue self-employment or skill development courses.

Taking the Mudra limit from the existing ₹10 lakh to ₹20 lakh in cases where the loan is serviced and repaid properly is indeed a radical step in the direction of encouraging entrepreneurship under the ‘Tarun’ category.

Research and Development

The Union Budget 2024-25 announced the setting up of Bharat Small Reactors in partnership with the private sector and collaboration in the research and development of Bharat Small Modular Reactor. It is part of a larger strategy to integrate nuclear energy into India’s energy security framework.

Like, about ₹1 lakh crore has been given to the Anusandhan National Research Foundation to act as a catalyst, through a linking process, for private sector-driven research and innovation at a commercial scale.

Space Economy

Besides, the budget has given a fillip to the space economy by creating a VCF of ₹1,000 crore with an aspiration to grow the space economy fivefold in ten years. Other than this, the outlay to the Department of Scientific and Industrial Research has been increased from ₹5,746.51 crore in 2023-24 to ₹6,323.41 crore in 2024-25, which becomes an increase of 10.03%. Out of this, an amount of ₹6,265.80 crore has been provided for the Council of Scientific and Industrial Research.

Women’s Development

The contours of women-led development are reflected in an outlay of over ₹3 lakh crore for women’s welfare schemes alone, reflecting the government’s strong commitment towards gender equality and women empowerment.

Analysis

The Union Budget 2024 has been a proactive document, especially in its strong overtures to innovation, skill development, and entrepreneurship. Ending the Angel Tax and increasing Mudra loan limits will further support the growth of startups and small businesses. Huge investments in R&D, particularly in the nuclear and space sectors, are likely to accelerate technological progress and economic growth.

The laying of much-needed attention on skilling and employment, umbrellas, and enhanced outlays should deliberate upon a skilled workforce in India. Revise the Model Skill Loan Scheme and increase the outlay for the Anusandhan National Research Foundation; such actions point toward the commitment of the government toward innovation and self-employment.

A better impetus to women’s welfare and space economy is a pointer to its balanced character, aiming to attack social development and high-tech industry growth simultaneously. The Union Budget 2024 therefore lays a strong foundation for a much more dynamic and inclusive economy in India, priming the country for sustained growth and development in the coming future.