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...An Entrepreneurial Insight July 2014 Vol. XIV Iss. 1 IMT Hyderabad

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Monthly newsletter of Prarambh, E-Cell, IMT Hyderabad

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Page 1: Empressario July Edition

...An Entrepreneurial Insight

July 2014

Vol. XIV Iss. 1 IMT Hyderabad

Page 2: Empressario July Edition

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

Page 3: Empressario July Edition

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

Page 4: Empressario July Edition

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

Page 5: Empressario July Edition

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

Page 6: Empressario July Edition

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.

Page 7: Empressario July Edition

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

Page 8: Empressario July Edition

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

Page 9: Empressario July Edition

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)

Page 10: Empressario July Edition

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

Page 11: Empressario July Edition

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)

Page 12: Empressario July Edition

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: [email protected].

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.

Page 13: Empressario July Edition

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

Page 14: Empressario July Edition

Vol. XIV Iss. 1 | Empressario | July 2014 | Prarambh | IMT Hyderabad

Institute of Management Technology, Hyderabad

Survey No 38, Cherlaguda Village

Shamshabad Mandal, RR District, Hyderabad—501218 (Telangana State)

Tel: +91-40-30461662 Fax: +91-40-30461655

E-mail: [email protected] Website: www.imthyderabad.edu.in

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Write to us: [email protected], [email protected]