Economic Survey 2018-19 suggests rationalisation of tax policy for startups to encourage 'innovative investments'

The Economic Survey for 2018-19 noted that countries across the world recognised the need to evolve a tax system that can foster innovation

Press Trust of India July 04, 2019 17:32:30 IST
Economic Survey 2018-19 suggests rationalisation of tax policy for startups to encourage 'innovative investments'
  • Survey said that growth in new economy cannot be fostered without an ecosystem that rewards innovation and entrepreneurship

  • Economic Survey emphasised that continuing the creation of an ecosystem for private investment is critical

  • It said IT services accounted for around 15 percent, followed by healthcare and life sciences at around 9 percent

New Delhi: The Economic Survey Thursday suggested rationalisation of tax policy for startups to encourage 'innovative investments' in the Indian economy, as it acknowledged their role in driving economic growth and creating jobs.

The Economic Survey for 2018-19, tabled in Parliament by Finance Minister Nirmala Sitharaman, noted that countries across the world recognised the need to evolve a tax system that can foster innovation.

Economic Survey 201819 suggests rationalisation of tax policy for startups to encourage innovative investments

Representational image. Thinkstock.

"Therefore, tax policy and its implementation for startups must be rationalised to foster innovative investments in the Indian economy," the Survey said.

It pointed out that growth in the new economy cannot be fostered without an ecosystem that rewards innovation and entrepreneurship.

"Startups and innovative ventures face significantly greater uncertainty than traditional “brick-and-mortar” firms. Yet, policy ambiguities that create collateral damage for genuine risk-takers can affect investments by dampening the animal spirits in the economy," the Survey added.

Underlining the vibrant startup ecosystem that has developed in India, the Economic Survey emphasised that continuing the creation of an ecosystem for private investment, especially in the new economy, is critical to enable the cycle of investment, demand, exports, growth and jobs.

Economic Survey 201819 suggests rationalisation of tax policy for startups to encourage innovative investments

The 'Startup India, Standup India' initiative in 2015 has aimed to create an ecosystem that is conducive for the growth of such companies. As on 1 March, 2019, 16,578 new startups were recognized across 499 districts, 47 percent startups from Tier 2 and 3 cities.

Elaborating on the industry-wise distribution of recognized startups, it said IT services accounted for around 15 percent, followed by healthcare and life sciences at around 9 percent and education at 8 percent.

Updated Date:

Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply

also read

Hong Kong to spend $15.4 billion in fiscal measures to stabilise virus-ravaged economy
World

Hong Kong to spend $15.4 billion in fiscal measures to stabilise virus-ravaged economy

Finance Minister Paul Chan predicted that compared to the economic contraction of 6.1% last year, the economy is set to grow 3.5% to 5.5% this year

West Bengal govt to reduce tax on petrol and diesel by Re 1 per litre from midnight on 22 Feb
India

West Bengal govt to reduce tax on petrol and diesel by Re 1 per litre from midnight on 22 Feb

State finance minister Amit Mitra said the move will provide respite to those stung by fuel prices and alleged that the Centre had imposed cess to avoid devolution with states

EPFO likely to announce interest rates on provident fund deposits for FY 2020-21 today
India

EPFO likely to announce interest rates on provident fund deposits for FY 2020-21 today

New EPFO enrolments have grown to 12.54 lakh in December 2020, a staggering 24 percent rise when compared to the same month for the year 2019