startups: What happens to India’s startups with a coalition government at the Centre? Here is what they want

As a new coalition government prepares to take office, the startup industry is calling for clearer regulations, streamlined processes for relocating headquarters to India, and a simplified legal and enforcement framework to support their growth, TOI reported on Friday.“The approach of the tax departments towards startups is one area that is concerning the industry a lot… whether it is the misinterpreted angel tax issue or the GST notices that a lot of startups are getting and other law & enforcement challenges. This is one aspect we expect the new govt to address. They should ensure that startups building in this country are not unnecessarily harassed at the hands of various authorities. Generally, startup business models are unique and many times, tax department misinterprets issues,” the CEO of a top unicorn firm told TOI on condition of anonymity.

Sabyasachi Goswami, CEO of recently established unicorn Perfios, suggested that simplifying registration processes and establishing clear rules could facilitate the establishment and operation of startups.

“In the upcoming term, we look forward to policies encouraging ease of doing business and reforms that support businesses,” he said. As per Goswami, the ecosystem would benefit from tax breaks wherever possible and better access to debt financing for businesses.

Furthermore, startups aiming to relocate their operations to India from countries such as the US or Singapore are requesting assistance from the new government to expedite the relocation process. A founder of a unicorn undergoing such a transition stated that the current process takes more than 12 months.

“It’s a long and cumbersome process. We urge the new govt to simplify the same and cut down the time taken for such transactions,” the founder said.In the fintech sector, many advocate for the implementation of a tiered Merchant Discount Rate (MDR) system for UPI merchant transactions. “This is our biggest ask… else, the ecosystem will become financially unviable,” said an executive with a top fintech.Ritesh Agarwal, the founder and CEO of Oyo Hotels and Homes, emphasized the importance of government support for promising startups in small towns. He suggested enhancing infrastructure, simplifying funding access, and setting up more incubators. Additionally, he advocated for the expansion of initiatives like the production-linked incentive (PLI) scheme to reduce reliance on imports and promote local economic growth.

“As we look to the new govt, there is a collective expectation for policies that continue to foster a conducive environment for growth. Enhanced regulatory clarity, improved access to funding and incentives for technological advancements will be crucial,” said Harshil Mathur, CEO & co-founder at Razorpay.