Why chain startups?

Why chain startups?
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First Published: Thu, Mar 01 2007. 01 23 AM IST
Updated: Thu, Mar 01 2007. 01 23 AM IST
Anjana Vivek
Consultant and entrepreneur, Bangalore
For sustainable growth, long-term planning is important, particularly in health, education, agriculture and infrastructure. This Budget has touched on these. Our best assets are our people. It is right that the Budget speech started with a strong focus on education and empowering our youth. The benefits will accrue in the long term—if and only if things go the way they are stated on paper.
To truly become a world class economy, India needs many more world class companies. Some of these will come from start-up ventures created today. VC investment can provide much-needed funding for these high-risk companies. But the Budget has restricted investment by VC funds to start-up ventures in a handful of areas. This is not constructive. Start-ups with potential may be unable to get funding if they are in the ‘wrong sector,’ as investments will favour certain sectors over others. Some marginal benefits have been given for small companies by withdrawal of the tax surcharge if their profits are less than Rs1 crore.
Of course, well-managed companies with strong fundamentals and strong management teams would not see value erosion in the long run.
For the tax-paying individual, there is some relief in the increase in the tax exemption limit. But some of this will be taken away in the form of the increased education cess. The overall impact on their cash flows may not be significant. Moreover, inflation, if not controlled, will negate any benefits and erode their cash flows.
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First Published: Thu, Mar 01 2007. 01 23 AM IST
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