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Fly high, without fear: Ministers to startups


Bengaluru: Key cabinet ministers conveyed some home truths to India’s startup leaders at The Economic Times Startup Awards in Bengaluru.

Piyush Goyal, minister for commerce and industry, had a clear message: Don’t try to evade taxes or find innovative workarounds to save a few rupees in taxes — do business honestly and there is nothing to fear.

Ravi Shankar Prasad, minister for electronics and information technology and law, said the Narendra Modi-led government would “never compromise with data sovereignty,” referring to ongoing discussions around data protection.

“The data protection bill is a work in progress. We are seeking clarifications with some prominent people in the field. We need a balance between data availability, privacy, and anonymity,” he said.

The ceremony to honour the best and the brightest of India’s growing startup ecosystem came on a day of big announcements for the industry. Goyal referred to finance minister Nirmala Sitharaman’s statement on Friday that angel tax would not be applicable to startups registered with the Department for Promotion of Industry and Internal Trade.

“There was never an angel tax. It was a figment of imagination that either your industry started or some smart CAs thought of because it always made sense to make a bill or two on angel tax from startups. But there never ever was an angel tax,” he said.

Goyal clarified that the only purpose of Section 56 2(b) of the Income Tax Act was “to stop — irrespective of government — shell companies that used to create capital out of nowhere and capital that was going to fund illegitimate businesses.”

Prasad had three suggestions for startups and laid emphasis on inclusion.

“Digital India could succeed because it was designed to bring in digital inclusion. Aadhaar became an important support system for that,” he told the audience.

Prasad added that “you never succeed in India substantially unless there is an element of compassion, care and emotion blended in that” and lauded the energy of young Indians “raring to go.”

Aadhaar role in Digital India

“All of us engage with them politically also. Their vision, their courage, aasman ko chhune ki tamanna (the desire to reach for the sky), that is truly extraordinary. I think the startup movement is going to answer that,” he said.

Prasad highlighted the significant role of Indian startups in raising the country’s profile. “India has become the second largest startup movement in the world. Last year we added about 1,200 startups,” he said.

Prasad hailed the biometric based Aadhaar unique identity programme and its architect Nandan Nilekani, calling it “a low-cost technology developed by Indians having global resonance and becoming, in many ways, the shining meter of Digital India.”

Goyal weighed in on the fracas between Zomato and the National Restaurants Association of India and offered to mediate. “I would suggest that you sort it out quickly amongst yourselves, and if you can’t, I am happy to intervene,” Goyal said. “I have had such meetings and they don’t end until there is a resolution. I may lock you up in a room, and until there is a resolution, we won’t open the door.”

Goyal said there would hopefully be less and fewer interventions from the government and possibly, none. “Very often, when we look at the IT industry, we often say that the one reason why India flourished in that space was that they didn’t have to go to the government for anything,” he said.





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