Union Budget 2015: E-commerce start-ups get the much needed push

Entrepreneurs believe the Budget will mark the dawn of a new era of higher growth in the online start-up and e-commerce industry

e4m by Ankur Singh
Published: Mar 3, 2015 9:01 AM  | 6 min read
Union Budget 2015: E-commerce start-ups get the much needed push

The Union Budget 2015-16 had some good news for Indian entrepreneurs—especially ecommerce startups. With the technology and startup sectors receiving allocations of  Rs 1000 crore, promotion of cashless transactions via RUPay debit cards backed by major reduction in corporate tax from 30 per cent to 25 per cent over next four years.

It is clear indication from the government’s end that it is focusing on promoting e-commerce, innovation and entrepreneurship.

The past couple of years have seen a marked rise in e-commerce players is industries beyond retail and fashion. exchange4media spoke to e-commerce startups in various industries to gauge the impact of the budget announcements. Most believe that this will mark the start of a new era of higher growth in the online start-up and e-commerce industry.
Services industry

Suvro Ghosh, Founder of, a portal which has 360° service for all healthcare needs online, said, “The budget has been very encouraging and truly inspiring for all entrepreneurs and the youth of India. As a first-generation entrepreneur, I know how hard it is to chase a dream. It would be splendid for India to not only get ideas from its brain-bank, but also get   support from the Government. This way the young, driven youth can fulfil their dreams and make significant contributions to the domestic economy over the coming years. Welcoming FDI is a cornerstone for a turnaround and to create and enhance infrastructure.”

Tapan Kumar Das, CEO and Co- Founder of, (Intelligent Tiffin) an online and offline healthy meal providing company , says “The allocation of Rs 1000 crore for  start-ups was one of the major announcements of this year’s budget. It’s definitely a breakthrough move for entrepreneurship in the country but the implementation of the same is a daunting challenge. Reduction of corporate tax by 5% is another step that favours emerging companies immensely. But, according to me, for start-ups, it’s the growth of the company that matters more than just making profits. Looking at the positive side, the saved money can help companies invest in employee training to enhance their productivity. The announcement to set up Mudra Bank for priority to SC/ST entrepreneurs will greatly boost confidence in the business eco-system but again implementation will be the real game-changer. Lastly, bolstering cashless transactions through RUPay debit cards and reduction of tax on royalty fees for technical services by 15% will be of tremendous help to e-commerce start-ups."

Vinamra Pandiya, COO at said, “Hike in service tax will increase the cost of online shopping. Eating out and ordering food home also becomes dearer which is a slight disappointment. Decrease in corporate tax is a welcome relief for us though.”

“I am elated with Rs 1000 crore fund that has been allocated for start-ups, especially those that are technology-based. This announcement will encourage entrepreneurship and generate more employment opportunities in the sector. Also, the reduction in corporate tax from 30 % to 25% over the next four years is encouraging for e-commerce companies as low tax is equivalent to more inflow of cash. The promotion of cashless transactions through RUPay debit cards also works for the benefit of internet-based companies as this will reduce the propensity for Cash on Delivery, which is very high at present. Besides this, the tax reduction on royalty fees for technical services from 25% to 10% will make these services more cost-effective and bolster the operations of various tech-based firms,” said Suresh Sharma, Founder & Director,, a price comparison website. 

Fashion retail industry

According to Ashish Sood, Co- Founder, Youshine, an omni-channel fashion jewellery and accessories retail brand, it is great that the Indian entrepreneurial system is being encouraged by the announcements of a start-up Fund of Funds and the special MUDRA Bank to take of MSME funding needs. “Being a very young population, these measure will go a long way promote entrepreneurial activity in India. However, it is disappointing that GST implementation has been put forward by another 12 months. Retailers like us, who are looking to establish a Pan-India presence were really looking forward to this announcement."

“Making current loans refinanced for MSME segment will let corporates think better and will help them create more jobs. It’s a huge temptation for expansion of the present MSME segment and to think differently. Reduction of corporate tax to 25% from 30%, shows a powerful vision,” he added.

Travel industry

Online travel networks that accounts for nearly 71% of e-commerce business in India are equally elated with the proposals on Visa on Travel and reduction in the corporate tax.

Swaminathan Vedaranyam, Chief Executive Officer,, said, “The  Finance Ministers' proposal to  increase Visa on arrival scheme  from the current 43 countries to 150 countries is a very welcome move as it will push the incoming to India dramatically which will in turn help the entire local eco system of India. It's proposal to invest in heritage sites was a much awaited and extremely beneficial move as  there was an urgent need for well-defined policies and clear commitments to ensure that all cultural heritage points are given more attention with improved infrastructural facilities.  There is a recent spurt in domestic travel as well as a higher influx of foreign tourists in India and with dedicated upkeep of the tourist hotspots, we can ensure higher growth for the travel industry.  The reduction on corporate tax is another major move that will help companies put aside more cash which can be ploughed back into the business.”

Shefali Singh, Founder of Mysha, an online travel solutions to corporate clients, said, “Arun Jaitley’s budget included some very positive announcements for the travel and tourism industry. The fact that the government will open up Visa on Arrival facilities to 150 countries, from the current 43, will result in a high inflow of tourists. The emphasis on restoration of World Heritage Sites is also likely to bode well for the sector as it will induce both domestic and foreign tourists to travel to these spots. Additionally, for a company such as ours, which offers complete travel solutions to MICE and corporate clients, the reduction of corporate tax will result in a boost for the overall business."

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