Budget 2026: Stronger incentives, easier credit, tax relief & beyond — startups make their pitch

Union Budget 2026 is set to be presented on Sunday, February 1 and the startup ecosystem has laid out a clear set of expectations, calling for policy measures that prioritise early-stage survival, easier financing and simpler regulatory processes. Founders across sectors highlighted that although multiple government schemes exist to support entrepreneurship, young startups continue to struggle with limited credit access, rigid compliance norms and taxation hurdles. They stressed that unless these gaps are addressed, long-term growth and innovation could remain constrained. Electric mobility startup Emobi’s CEO and co-founder, Bharath Krishna Rao, said budgetary support should be closely tied to actual business outcomes.

According to him, “Extending subsidies and providing targeted support to startups based on actual vehicle sales can significantly strengthen manufacturing capabilities, especially for smaller and emerging companies. Such measures would enable startups to scale production, invest in technology and build long-term operational capacity”. Rao also highlighted persistent bottlenecks in institutional lending despite existing credit schemes.

“Although central government schemes such as CGTMSE, MUDRA and PMEGP are intended to improve access to credit, their effectiveness remains limited due to continued collateral requirements imposed by banks and NBFCs. Despite government-backed guarantees, only a small number of proposals are approved, restricting the flow of institutional finance to startups,” he told ANI, urging the government to introduce clearer and more consistent guidelines for lenders. Startups working in social and impact-driven domains are also looking for focused policy attention. Abhinav Rao Kuchipudi, founder and CEO of ParentVerse, said early-stage companies need stronger incentives, streamlined compliance systems and improved access to grants and funding. He said, “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”. Kuchipudi further said that the upcoming budget should prioritise areas such as early childhood development, mental health and digital-first parenting solutions. He added that higher allocations for child well-being, parental education and mental health awareness could help shape a more resilient future generation. From the hiring and workforce perspective, Taggd co-founder and CEO Devashish Sharma said the budget presents a chance to build confidence among employers. He said, “The Union Budget 2026 presents a lucrative opportunity to strengthen the trifecta of labour reforms, workforce readiness, and employer confidence. The implemented labour reforms have started to simplify compliance and improve worker protection.

However, the substantial impact will depend on whether organisations feel secure enough to hire and invest in skilling and reskilling. The upcoming budget can build on this progress by increasing employer-led training and supporting technology adoption without disrupting the workforce”. Concerns around regulatory burden and fragmented funding were also raised by Avinash Deshmukh, COO of health and wellness startup iThrive.

“What is really holding startups back today is not their intent or innovation-it is survival within a complex compliance and funding environment. Access to credit remains fragmented and difficult, especially for those in early-stage businesses doing meaningful work. Without uncomplicated, more predictable mechanisms for financial support, many up-and-coming startups cannot survive,” he said. Deshmukh also called for a revision in taxation thresholds, saying, “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”. As Budget Day approaches, startup leaders remain hopeful that the Union Budget 2026 will respond to these concerns and help create a more stable and supportive environment for innovation, employment and sustainable growth.