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Monthly newsletter of Prarambh, E-Cell, IMT Hyderabad
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...An Entrepreneurial Insight
July 2014
Vol. XIV Iss. 1 IMT Hyderabad
IMT - H | Prarambh Empressario | July 2014
Contents
1. Prarambh Speaks 1
2. Impact of Budget on Industrial Entrepreneurship 2
3. Budget 2014—Highlights 4
4. Impact of Budget on Indian Entrepreneurs 6
5. Budget 2014—Accentuating Entrepreneurship 8
6. Add Ons 10
7. Team Prarambh 11
Union Budget has always been important for entrepreneurs, it helps forecast
and analyse future prospects and invariably brings hope and confidence to the
whole business community.
There was a significant focus on startups in this year’s budget, with the finance
minister Arun Jaitley proposing several measures to promote entrepreneurship
in the country. One of the many talked about measures was the proposal to
establish a ₹10,000 crore fund to attract private capital by providing equity,
quasi equity, soft loans and other risk capital for startups. This year’s budget
has really created a buzz.
In this edition of Empressario we bring you articles about effects of this year’s
Union Budget on entrepreneurs of our country. Their concerns, hopes from this
budget will enlighten us with the possibilities this budget holds for
entrepreneurs.
Happy Reading!!
Team Prarambh
Prarambh Speaks
IMT - H | Prarambh Empressario | July 2014 | Page 1
IMT - H | Prarambh Empressario | July 2014 | Page 2
Impact of Budget on Industrial
Entrepreneurship
Entrepreneurship was given much priority in the recent Union Budget 2014-15 by the NDA
government. The booming startup and entrepreneurial culture in India got a big boost
when a whole new section of the budget was discussed about it. Some of the notable fea-
tures in it were:
1. Rs.10,000 crore SME and startup fund: The government
allocated this fund for the startups and SME’s that often lack
capital and thus struggle hard to survive. This move is a
motivational push for the budding entrepreneurs. It is, however,
not clear as to how this fund would be utilized.
2. Technology Center Framework: The budget has proposed Rs.200 crore for establishing
technology centers for pushing innovation, entrepreneurship and agro based industries.
3. Start-Up Village Entrepreneurship Program: The Government plans to setup a “Start Up
Village Entrepreneurship Program” that will encourage rural
youth to become entrepreneurs. This program will be a part of
Ajeevika, the National Rural Livelihood Mission (NRLM), which
aims to eliminate rural poverty through sustainable livelihood
options.
4. Digital India: Government of India proposed to allocate Rs.500 crore for software
startups that would ensure broadband connectivity in the rural areas and access to IT
services.
5. District level Incubation and Accelerator Program: To incubate new ideas and to
provide necessary support to accelerate entrepreneurship in India, the budget proposed
to setup nationwide “District level Incubation and Accelerator
Program”. Along with this, entrepreneur friendly legal bankruptcy
framework is proposed to be developed for SMEs to enable easy
exit.
6. E-Governance Benefits to Startups & SMEs: India is one of the unappealing countries
when it comes to “starting a business” not due to the lack of opportunities, but,
because of numerous procedures that should be followed in order to start a business.
The time taken to open a business in India is far too high compared to most countries in
the world. With Digital India and numerous E-Governance initiatives, it will be far easier
for an entrepreneur to start a business, as many procedures will be done online and in a
transparent manner.
The budget indeed shows a fair picture for the emerging and booming startup
community in India. This, however, would depend on the execution of the laws. India
should take a strong decision for this sector as it has got a great potential to contribute
to the country’s GDP, else it is feared that we might lose this talent to the Silicon Valleys
of the world.
Written By:
Prakhar Maheshwari
(IMT Hyderabad, Batch 2013-15)
IMT - H | Prarambh Empressario | July 2014 | Page 3
IMT - H | Prarambh Empressario | July 2014 | Page 4
Budget 2014-Highlights The big idea of budget 2014 depicts that the government clearly believes that innovation
and entrepreneurship are the drivers of economic growth. Most entrepreneurs detest
budgeting, but if you are running a sole enterprise it is necessary to force yourself to
develop a budget to hold yourself accountable. There can be few reasons for the same:
It will help you to become a better manager.
It will help you raise money.
It will help you avoid running out of money.
Below mentioned are some of the highlights of the key changes for
2014/2015 which will impact entrepreneurial activities:
Corporation tax rates: Corporation tax rate will reduce to 21% from April 2014 and 20%
from April 2015. The small profits rate of corporation tax will remain at 20%.
Annual investment allowance (AIA): The increase in AIA will offer further incentives for
businesses to invest in plant and machinery to obtain accelerated tax relief. On the other
hand, this gives only a short window opportunity for businesses to take advantage of these
increased levels.
Seed Enterprise Investment Scheme (SEIS): The government announced that the tax-
advantaged SEIS which are designed to be used by early stage companies to raise equity
finance will now be permanent. So this announcement will continue to be attractive at
least from a tax point of view.
Social investment tax relief: The aim of this relief is to encourage investment in charities,
community interest companies, community benefit societies etc. There is a benefit for the
eligible organisation in receiving financial support and also for the donor in terms of tax
saving.
Research & development: Improvements to the R&D will welcome to start-up and other
companies undertaking R&D and incurring tax losses.
These are some of the plans and allocation to entrepreneurial activities in budget 2014. It
thus becomes important for the entrepreneurs to plan their activities by going through the
budget analysis. It is so because failing to plan financially might mean that you are know-
ingly planning to fail.
Written by:
Team Finecea
The Finance Club of IMT Hyderabad
(Photo Source: www.google.com)
IMT - H | Prarambh Empressario | July 2014 | Page 5
IMT - H | Prarambh Empressario | July 2014 | Page 6
Impact of Budget on the
Indian Entrepreneurs
Introduction of Budget 2014 in the August house by finance minister Arun Jaitley has come
up as a boost for the start up ecosystems in India. The start up fund allocated for the year
is an eye pleasing amount of rupees 10000 crores. In addition to these, rupees 200 crores
have been assigned to scheduled caste entrepreneurs. The
micro, small and medium enterprises (MSME’) which
contribute nearly 8% to the country’s GDP , 45% to country’s
manufacturing output and 40% to the exports have been given
special impetus by redefining the higher capital ceiling that
make up the parameters of the MSME’S. The program has been
designed to magnify the start ups which are expected to make major contribution in the
year to follow. Further, to foster the young minds towards realising their ideas, a
nationwide “District Level Incubation and Accelerator Programme” has been drafted for
providing the necessary support. An Entrepreneur friendly legal bankruptcy framework will
be developed for the small and medium enterprises in order to facilitate easy exit routes.
Stimulation comes from the government in the field of biotechnology which will be
fortified on a large scale. The organic farming industry too has not been left unnoticed, and
an amount equal to 100 crores have been reserved for them. The employment centres are
ready for conversion into career centres with an allocation of 100 crore rupees. The
budget also says that the manufacturing units will be allowed to sell its products through
retail via Ecommerce platforms. To ice the cake a corpus of 200 crores has been set up to
establish Technology Centre Network. This entire fund of funds designated for the Indian
Entrepreneurs have been done solely to revamp the economy and to save the uprising
sector from imperil it might receive from the lack of funds. To have a swift summary the
IMT - H | Prarambh Empressario | July 2014 | Page 7
following is what the industry leaders have to comment about the budget’s fund allocation
to the sector.
Kiran Mazumdar Shaw, Chairman and Managing Director, Biocon Limited; Advisor, NEN:
The FM deserves to be commended for addressing the funding needs of small
entrepreneurs. The Rs. 10,000 crore venture capital funds for start-ups, incubators and
accelerators is a robust beginning. I also see promise in his announcement of a committee
to examine the financial architecture of small and medium-sized enterprises whom he has
rightly referred to as the backbone of the economy.
Kanwaljit Singh, Co-Founder and Senior Managing Director, Helion Ventures; Advisor, NEN:
I believe the Government has taken some very proactive steps to encourage
entrepreneurship. We eagerly wait to see how the implementation of some of these
initiatives is planned, especially the start up fund corpus plan.
SWATI GOEL 13A2HP066 PGDM - FINANCE
(Photo Source: www.google.com)
IMT - H | Prarambh Empressario | July 2014 | Page 8
Budget 2014
Accentuating Entrepreneurship
All business fixed their eyes onto the budget in agog as it was
put forth by the Finance Minister Mr. Arun Jaitley. The budget
brought cheers on the faces of the budding startups and
entrepreneurs as it contained a lot for them. It is for the first
time that the government has realized the vitality of home
grown entrepreneurial businesses and has offered an
environment conducive to their magnification. The chief reason why most of the startups
choke to death in their premature stage is the absence of support or incubation from the
state. The entrepreneurial sector requires a coherent strategy from the government
wherein they expect the government to support the startups through robust business
framework by enacting fiscal policies and R&D.
The Budget 2014 reflects that the government has realized this aspect of entrepreneurial
sector as it has indicated its interest in nurturing the small businesses to grow by setting up
venture fund solely for the startups. In an unprecedented move the government has
decided to encourage the entrepreneurs by announcing Rs 10000 crore funds to support
the budding startups. It is one of the largest venture funds which will place India right after
Silicon Valley and ahead of China in terms of venture capital fund. This year in terms of
funding Rs 3630 crore were invested in startups which was 40% more as compared to that
of the last year but out of this 90% came from the foreign venture capital fund. Now
setting up Rs1000 crore pools will bring in the focus back to India and will be a huge
motivator and will expedite the startup businesses.
Indians enjoy a reputation among the gamut of e-entrepreneurs with companies like
flipkart.com, myntra.com, yebhi.com etc doing well in this business domain and the
IMT - H | Prarambh Empressario | July 2014 | Page 9
investment of Rs 500 crore in setting up National Rural Internet and Technology centers
will not only deepen the reach of internet but will also help the e commerce businesses to
strengthen their presence in the rural market. The budget also brought in the much
awaited FDI in the e-commerce business domain and it will further nurture the web based
business startups by creating foreign capital inflows.
“The budget has kept the hopes of the entrepreneur high by giving them the platform to
grow and leap-frog as never before”, said Mr. Ashish alumni of XLRI Jamshedpur and
founder of online food mart website jsrbazaar.com. He further emphasized on the
importance of propitious state policies in the growth of the entrepreneurial sector. “India
has been a country of entrepreneurs and it seems that we have embarked upon a journey
to reclaim that title” said Mr. Ashish in his concluding remarks.
Raj Kiran Saraswat
XLRI, Jamshedpur
(Photo Source: www.123rf.com)
IMT - H | Prarambh Empressario | July 2014 | Page 10
Add-Ons
Readers’ Corner
Got any comments? Would you like to contribute to the newsletter?
Get back to us at: ecellprarambh@gmail.com.
Your comments/views and articles would be published from the next is-
sue. A few things to be kept in mind:
Articles/comments should not be demeaning / damaging in nature.
Articles should be to the point and of around 500 words.
The decision of selecting the articles to be featured and the number
of such articles rests with the faculty mentor and editor of the news-
letter.
So put on your thinking caps and show us your intellect side.
IMT - H | Prarambh Empressario | July 2014 | Page 11
Team Prarambh
Technical and Design
Pushkar Ghatole
Deeptanshu Pande
Technical and Design Support
Ayush Agarwal Prakash Thakur
Faculty Mentor
Dr.M.Sivagnanasundaram
Core Members
Manish Agrawal
Prakash Jeswani
Suhas Vaitla
Sahiba Pahwa
Saketa Pingali
Editors
Shreya Dasgupta Sarang Pious Neeli Sravya
Vol. XIV Iss. 1 | Empressario | July 2014 | Prarambh | IMT Hyderabad
Institute of Management Technology, Hyderabad
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Shamshabad Mandal, RR District, Hyderabad—501218 (Telangana State)
Tel: +91-40-30461662 Fax: +91-40-30461655
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Write to us: ecellprarambh@gmail.com, prarambh.ecell@imthyderabad.edu.in
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