Budget 2015: Start-ups like SETU, unlike online ad tax

By Amrita Premrajan, TimesJobs.com Bureau

Start-ups have welcomed the e-biz platform, SETU mechanism and bankruptcy reforms announced in the Union Budget 2015 but are wary of the service tax on online and mobile advertising.

Thumbs up for e-biz platform

With an aim to boost entrepreneurship in India, the Budget has pitched for the widespread usage of the recently launched e-biz portal. This integrates 14 regulatory permissions at one source, enabling faster clearances for setting up businesses.

"States are embracing and joining the e-biz platform. However, if we really want to create jobs, we have to make India an investment destination which permits the starting of a business in accordance with publically stated guidelines and criteria," Finance Minister Arun Jaitley said while presenting the Budget 2015-16.

"I intend to appoint an Expert Committee for this purpose to examine the possibility and prepare draft legislation where the need for multiple prior permissions can be replaced with a pre-existing regulatory mechanism," he said.
Reacting to this move, Divakar Vijayasarthy, founder, MeetUrPro, said: "Consolidating start-up approvals through e-biz portal by including state approvals will certainly bring down the complexities in setting up business. With more and more states participating in this initiative, this portal would eventually act as a single window for obtaining regulatory approvals and licenses.

"If implemented, this would be the single-most important development to improve the ease of doing business in India."

SETU spreads optimism

Another major announcement in the Budget is setting up of SETU (Self-Employment and Talent Utilisation) - a techno-financial, incubation and facilitation programme to support all aspects of start-up businesses and other self-employment activities, particularly in technology-driven areas.

"I am setting aside Rs 1,000 crore initially in NITI Aayog for this purpose," said Jaitley.

Commenting on this, Shashank ND, founder & CEO, Practo, said: "The financial allocation of Rs 1,000 crore under SETU will significantly help boost the start-up ecosystem in India. The additional focus towards strengthening of IT infrastructure, the backbone of the Indian start-up industry, will accelerate growth." Easy exit norms to help start-ups The budget also announced bankruptcy law reform to make the process of shutting shops easier. On this, Saurabh Srivastava, co-founder, Indian Angel Network, said that reform will help start-ups in taking a leap of faith and give boost to setting up of more indigenous companies. Service tax on online and mobile ads unwelcome

The budget has proposed levying service tax on online and mobile advertising.

Commenting on this, Zafar Rais, CEO, MindShift Interactive said: "We believe this move will adversely affect the industry's growth. Currently, India's exponential mobile penetration and app consumption patterns are driving growth of the mobile advertising industry and this development could hamper innovation efforts of the entire ecosystem comprising of mobile development start-ups, advertisers and publishers."