Angel tax repeal, SME support and more: How Modi 3.0 government continues to push for ease of doing business

Prime Minister Narendra Modi’s government on Tuesday completed 100 days since assuming power for the third consecutive time. As the Modi government 3.0 completed 100 days, various cabinet ministers highlighted the achievements of their ministries during this period.

Among other sectors, Modi 3.0 has given special emphasis to the ease of doing business in India. From tax breaks to encouraging innovation, the central government has taken several steps to make it easier for Indians to start businesses.

Startup support

To provide financial relief to start-ups and promote innovation, the 31 per cent angel tax that had been levied on start-ups since 2012 has been abolished by the Modi 3.0 government. “To strengthen India’s start-up ecosystem, encourage entrepreneurial spirit and support innovation, I propose to abolish the so-called angel tax for all classes of investors,” Finance Minister Nirmala Sitharaman announced while presenting the Union Budget 2024.

The corporate tax rate for foreign companies has been reduced from 40 per cent to 35 per cent to make India more globally competitive and attractive to investors.

The Modi 3.0 government has also taken steps to boost innovation in the country. In a bid to make India a leader in the global space economy, a Rs 1,000-crore venture capital fund will be set up for space startups.

The Gen-Next Support for Innovation Startups (GENESIS) programme has been approved to support startups in Tier II and Tier III cities.

The government also announced that under the National Industrial Corridor Development Programme, 12 industrial hubs will be created, which will provide facilities for investors and facilitate running a business.

Focus on SMEs

Meanwhile, the MUDRA loan limit has been increased from Rs 10 lakh to Rs 20 lakh, which is beneficial for entrepreneurs who have already repaid their previous loans.

A credit guarantee program for SMEs has also been launched, allowing small entrepreneurs to borrow without collateral, making it easier for them to buy machinery and other goods.

E-commerce export centres for SMEs and traditional craftsmen will be established in the PPP mode, providing export services and enabling easy access to the global market.