As the nation awaits the presentation of the Union Budget 2026 on Sunday, February 1, India's vibrant startup community has voiced a unified set of demands. Founders across the spectrum are urging the government to introduce concrete measures that address the core challenges of early-stage survival, access to easier financing, and a simplification of complex regulatory processes.
Core Challenges: Credit Access and Compliance Burden
Despite numerous government schemes designed to foster entrepreneurship, young companies continue to grapple with significant hurdles. Limited access to credit, rigid compliance norms, and taxation issues are repeatedly cited as major impediments. Industry leaders warn that without addressing these gaps, India's long-term growth and innovative potential could be severely constrained.
Bharath Krishna Rao, CEO and co-founder of electric mobility startup Emobi, emphasized the need for outcome-linked budgetary support. He argued that extending subsidies and providing targeted aid based on actual business metrics, like vehicle sales, could dramatically boost manufacturing capabilities for smaller firms. "Such measures would enable startups to scale production, invest in technology and build long-term operational capacity," Rao stated.
He also pointed out a critical flaw in existing credit schemes like CGTMSE, MUDRA, and PMEGP. "Their effectiveness remains limited due to continued collateral requirements imposed by banks and NBFCs," Rao told ANI, highlighting that only a small fraction of proposals get approved. He called for clearer and more consistent lending guidelines to ensure institutional finance actually reaches startups.
Sector-Specific Demands: From Impact Ventures to Workforce
The call for a supportive budget extends to social impact and family-focused ventures. Abhinav Rao Kuchipudi, Founder and CEO of ParentVerse, stressed the need for stronger incentives for early-stage companies. He advocated for streamlined compliance, better access to grants, and specific tax benefits for startups in family-focused innovation, women-led enterprises, and tech-enabled education. Kuchipudi further urged the budget to prioritize funding for early childhood development, mental health, and digital parenting solutions, arguing that higher allocations here would help build a more resilient future generation.
From a employment perspective, Devashish Sharma, Co-founder and CEO of Taggd, sees the budget as a chance to bolster employer confidence. "The substantial impact of recent labour reforms will depend on whether organisations feel secure enough to hire and invest in skilling," he said. Sharma recommended that Budget 2026 build on this progress by incentivizing employer-led training and supporting technology adoption that doesn't disrupt the workforce.
Simplifying Survival: GST Threshold and Fragmented Finance
Avinash Deshmukh, COO of health and wellness startup iThrive, encapsulated the sentiment of many by stating that intent and innovation are not the barriers—survival is. "Access to credit remains fragmented and difficult, especially for those in early-stage businesses doing meaningful work," he said. Deshmukh called for uncomplicated and predictable financial support mechanisms.
He also proposed a significant revision to the GST registration threshold, a move that would provide relief to countless micro-startups. "Another important reform is to raise the GST registration threshold from Rs 20 lakh to a minimum of Rs 1 crore. With inflation and operational realities, Rs 20 lakh is no longer a meaningful benchmark," Deshmukh asserted.
With Budget Day approaching, startup leaders across sectors remain hopeful that the Union Budget 2026 will be responsive to these pressing concerns. The collective appeal is for a budget that moves beyond schemes to actionable implementation, thereby creating a more stable and nurturing environment for innovation, job creation, and sustainable economic growth.
