To boost employment, the government may provide tax incentives to start-up companies in the upcoming budget. According to sources, the Department of Industry and Internal Trade Promotion (DPIIT) has made several suggestions related to start-ups for the upcoming budget. These include suggestions such as tax incentives to incubators coming through the Atal Innovation Mission, GST reduction for Alternative Investment Fund (AIF) management and tax benefits on Employee Stock Ownership Program (ESOP).

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According to experts, start-ups need talented people and such people can be easily attracted by giving shareholding in the company. Start-ups pay more to employees and their burden increases more than capacity, weakening their chances of success. Chaitos founder Nitin Saluja said that tax exemption should be given in the case of ESOPs. He said that ESOP is a better option for start-ups. ESOP is a plan voluntarily adopted by the company.

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Under this, the company gives its employees a stake in the company instead of higher salaries. AIF fund manager based in the country is paying 18% GST, it is being sought to be reduced. According to sources, the reduction in GST rates can help in making the country an investment hub. Through Start-up India, the government is trying to promote self-employment and create a business-friendly environment in the country. 19 components have been included under the Start-up India Action Plan. These include components such as providing support and incentives to the fund, ensuring industry and academy participation. So far, the government has identified 26,619 start-ups. Most of these are in the IT services sector. Apart from this, a large number of start-ups are also active in the fields of healthcare, life sciences, and education.

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