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Does the Budget Really Matter? Yes!

Mahesh Murthy argues here that the budget does not matter any more - especially not to entrepreneurs. He laments that the booty being promised for special focus areas is not meant for genuine entrepreneurs but for those who are politically connected.

While I may not disagree with Mahesh on the fact that most funds outlay on Govt. schemes benefits the big co's and politically connected, I don't agree a wee bit with him that the budget does not matter to an entrepreneur. For example, here's how this year's budget announcements may help entrepreneurs:
  • Now you can hire an individual for upto 1.6 lakhs and forget anything about paying taxes to the Govt on his behalf - that's substantial admin cost savings for a small firm
  • If you are a bootstrapper, funding your business with your salary or of a spouse/friend - you have a little more cushion for your startup
  • If you are selling a service to end consumer, you know know that they have a little more money in their hands to invest/spend which you could attract to your product/ service
  • If you are a start-up in clean energy, the rising oil prices and tax breaks on CFL's help increase the sense of urgency and awareness (respectively) in the public in moving towards a cleaner alternative and reducing their fuel costs
  • If you are a small technology/ services company, you know that Nandan Nilekani's UID project will require lots of manpower and technology to provide for filling up a national database. So while the main software may be made by an Infosys / Wipro / TCS - you will still be able to reap the downstream flow of funds
There can be many more reasons depending on the sector which you are in - discarding the role of the government may be the biggest mistake that the intelligentsia of India can do! I prefer intellectuals like Nilekani and Tharoor who are going into the system to change it than those like Murthy who are just ridiculing it from the fence!
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