Startups Call for Enhanced Support for Deeptech and Resolution of ESOP Taxation Ahead of Union Budget

The startup sector is advocating for increased backing for deeptech ventures and targeted funding for crucial tech areas ahead of the Union Budget. During the National Startup Day event, Anjali Bansal, Founder of Avaana Capital, highlighted the supportive policy environment startups have experienced in recent years. She emphasised the need for more support in core technology and innovation, which require different strategies and longer development periods.

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Prashanth Prakash from Accel stressed the importance of focusing on multiple deeptech areas, similar to the AI mission. He mentioned that sector-specific funds are necessary and highlighted the unresolved issue of ESOP taxation. "Just like we had a disruptive initiative in the last Budget on the angel tax, we are hoping we will see something on ESOP taxation this year," he said.

Deeptech Innovation and Support

Bansal pointed out that India's next frontier in entrepreneurship lies in core technology fields such as spacetech, biotech, and precision manufacturing. She suggested that these areas require enhanced research and development support. The focus should be on engineering, product development, and manufacturing innovations to drive deeptech advancements.

The need for thematic financing aligned with national priorities was also discussed by Bansal. She advocated for funding that supports a range of deeptech technologies beyond AI. This could include incentives and mandates to encourage growth in these sectors. "Thematic financing that is aligned with national priorities like AI, but also a whole host of other deeptech technologies is what we would like to see even more support for," she added.

Sector-Specific Funding Needs

Prakash emphasised that just as there is a dedicated AI mission, similar attention should be given to various deeptech sectors. He called for sector-specific funds to address unique challenges and opportunities within these fields. This approach could foster innovation and growth across multiple technology domains.

The startup community's call for enhanced support reflects their desire to build on past successes while addressing current challenges. By focusing on core technology and innovation, they aim to position India as a leader in deeptech advancements. The upcoming Union Budget presents an opportunity to address these needs through strategic funding and policy measures.