Startups Seek Stronger Incentives, Easier Credit and Tax Relief Ahead of Union Budget 2026
New Delhi, January 12: Ahead of the presentation of the Union Budget 2026 on February 1, startups across sectors have urged the government to announce stronger incentives, easier access to credit, and simplified compliance norms to support early-stage ventures and ensure sustainable long-term growth.
Industry leaders said that while several government schemes are in place, gaps in implementation—particularly in funding access, taxation and regulatory compliance—continue to pose major challenges for young startups.
Bharath Krishna Rao, CEO and Co-founder of electric mobility startup Emobi, emphasised the need for targeted subsidies linked to actual vehicle sales.
“Extending subsidies and providing targeted support to startups based on real vehicle sales can significantly strengthen manufacturing capabilities, especially for smaller and emerging companies. Such measures would help startups scale production, invest in technology and build long-term operational capacity,” he said.
Rao also pointed out limitations in existing credit schemes. “Although central government schemes such as CGTMSE, MUDRA and PMEGP aim to improve access to credit, their impact remains limited due to continued collateral requirements imposed by banks and NBFCs. Despite government-backed guarantees, only a small number of proposals are approved,” he added, calling for clearer and uniform lending guidelines.
Startups in social and impact-driven sectors have also sought focused support. Abhinav Rao Kuchipudi, Founder and CEO of ParentVerse, said early-stage startups need enhanced incentives, simplified compliance and better access to funding.
“We look forward to enhanced incentives for early-stage startups, simplified compliance structures and better access to funding and grants for impact-driven ventures. Tax benefits for startups investing in family-focused innovation, women-led enterprises and tech-enabled education would further accelerate growth,” he said.
Kuchipudi also urged the government to prioritise early childhood development, mental health and digital-first parenting solutions, adding that increased budgetary allocations in these areas would help build a resilient future generation.
From the HR and employment sector, Devashish Sharma, Co-founder and CEO of Taggd, said the upcoming budget presents an opportunity to strengthen labour reforms and workforce readiness.
“The Union Budget 2026 offers a chance to build on labour reforms by encouraging employer-led training, skilling and technology adoption, while boosting employer confidence to hire and invest in human capital,” Sharma said.
Meanwhile, Avinash Deshmukh, COO of health and wellness startup iThrive, said complex compliance norms and fragmented access to funding continue to hinder startup survival.
“What is holding startups back today is not innovation, but survival in a complex compliance and funding environment. Access to credit remains difficult for early-stage businesses. Without predictable and simplified financial support, many promising startups struggle to survive,” he said.
Deshmukh also called for raising the GST registration threshold from Rs 20 lakh to at least Rs 1 crore, citing inflation and rising operational costs.
Overall, startups hope the Union Budget 2026 will address these concerns and create a more supportive ecosystem for innovation, employment generation and sustainable economic growth.
