The Indian government has issued the Union Budget of 2021, which contains several policies that are conducive to startups:

(1)   Incentivize the incorporation of one-person companies (OPCs), will be allowing them to grow without restriction on paid-up capital and turnover, allowing conversion into any other type of company at any time, reducing the residency limit for an Indian citizen to set up an OPC from 182 days to 120 days, and allow non-resident Indians to incorporate OPCs in India.

(2)   Set up a development financial institution (DFI) with Rs 20,000 crore to increase credit channels for SMEs, manufacturing, infrastructure, and other key areas, in the next three years.

(3)   Preferential tax policies for start-up companies, including capital income tax exemption, will be extended for another year, and the qualification for start-up companies to apply for the tax exemption period will also be extended until March 2022.

(4)   Revise the definition of small companies in the 2013 Companies Law, increase the capital threshold standards of small companies from no more than 5 million rupees to no more than 20 million rupees, and the turnover from no more than 20 million rupees to no more than 200 million rupees Rupee.