Post Budget: Amazon, Flipkart & Uber To Be Affected By New Increased Service Tax Rate

Finance Minister Arun Jaitley presented the Super Budget 2015 on 28^th February and got a thumbs up from most of the industry people. According to a proposal under the newly presented budget, the ecommerce industry will now come under the new service tax rate of fourteen percent. This new proposal is surely going to have a huge impact on web base aggregators of bus operators, retail sellers, hotels and taxi owners like OlaCabs, Amazon, Snapdeal, Flipkart and Uber.

According to the new proposal, which became effective from March 1, all online aggregators that own and operate a web based application will now come under the tax net.

Related - Budget 2015: All Talks, No Work For Tech-Startups, Reacts Tech Industry

"All aggregators which by means of an application and a communication device, enable a potential customer to connect with persons providing service of a particular kind under the brand name or trade name; shall fall under the service tax bracket," said a notification issued by the Finance ministry's department of Revenue, effecting the amendments to the Service Tax Rules of 1994 introduced in the Union budget 2015 on Saturday.

“We applaud the government's decision to include specific language pertaining to aggregators in the 2015 Union Budget that will drive improvements to tax compliance,” said a statement given by an Uber spokesperson to the Economic Times.  This new proposal to include online commerce industry under the ambit of the new service tax can be seen as a result of intense discussions that have been taking place between Uber and the Indian Tax authorities over the last few months. The Tax authorities of India questioned Uber last year over the payment of service tax in the country.

Until recently, the service tax rules did not imply on the web based aggregators. According to Uber India, this new proposal will ensure that there is transparency in the flow of tax revenues directly to the Indian government.  On the other hand, OlaCabs is hopeful that such new rules will bring the foreign players and domestic players on a level playing field and give them equal chance to grow and flourish.

As per the new rules introduced in the Budget 2015, even if such web based aggregators employ just a country head or liaison, their officials will still be liable to pay service tax on the behalf of the company.

These new service tax rules will also be applicable to classifieds players, deal websites and online aggregators like Stayzilla, Quikr, Cashkaro, Zomato, Mydala, FoodPanda, Housing and Olx

Post Budget: Amazon, Flipkart & Uber To Be Affected By New Increased Service Tax Rate

Finance Minister Arun Jaitley presented the Super Budget 2015 on 28^th February and got a thumbs up from most of the industry people. According to a proposal under the newly presented budget, the ecommerce industry will now come under the new service tax rate of fourteen percent. This new proposal is surely going to have a huge impact on web base aggregators of bus operators, retail sellers, hotels and taxi owners like OlaCabs, Amazon, Snapdeal, Flipkart and Uber.

According to the new proposal, which became effective from March 1, all online aggregators that own and operate a web based application will now come under the tax net.

Related - Budget 2015: All Talks, No Work For Tech-Startups, Reacts Tech Industry

"All aggregators which by means of an application and a communication device, enable a potential customer to connect with persons providing service of a particular kind under the brand name or trade name; shall fall under the service tax bracket," said a notification issued by the Finance ministry's department of Revenue, effecting the amendments to the Service Tax Rules of 1994 introduced in the Union budget 2015 on Saturday.

“We applaud the government's decision to include specific language pertaining to aggregators in the 2015 Union Budget that will drive improvements to tax compliance,” said a statement given by an Uber spokesperson to the Economic Times.  This new proposal to include online commerce industry under the ambit of the new service tax can be seen as a result of intense discussions that have been taking place between Uber and the Indian Tax authorities over the last few months. The Tax authorities of India questioned Uber last year over the payment of service tax in the country.

Until recently, the service tax rules did not imply on the web based aggregators. According to Uber India, this new proposal will ensure that there is transparency in the flow of tax revenues directly to the Indian government.  On the other hand, OlaCabs is hopeful that such new rules will bring the foreign players and domestic players on a level playing field and give them equal chance to grow and flourish.

As per the new rules introduced in the Budget 2015, even if such web based aggregators employ just a country head or liaison, their officials will still be liable to pay service tax on the behalf of the company.

These new service tax rules will also be applicable to classifieds players, deal websites and online aggregators like Stayzilla, Quikr, Cashkaro, Zomato, Mydala, FoodPanda, Housing and Olx

Budget Reactions From Hyderabad Inc For 2015 - Startups, IT &Telecom Sectors, Industry Associations.

After finance minister Arun Jaitley presented Union Budget 2015 just a day before yesterday, Hyderabad Inc. gave budget reactions. These include inputs from Startups, IT & Telecom Sectors, Industry Associations from Hyderabad city, arguably a Silicon Valley of India.

Mr. Y Guru

Chairman & Managing Director
Celkon Mobiles

"Overall it was a strong and structural budget with clear roadmaps to achieve the target of more than 8% economic growth and reduce the fiscal deficit to 3% in the next 3 years. Government has shown its intent to create a business friendly environment and boost the 'Make in India' initiative. The thought process of merging the Skill India initiative with Make in India is the right approach as skill development and manufacturing complement each other in the long run. The focus of the budget has been more towards boosting infrastructure, agriculture, healthcare and manufacturing and hits the right chords. Bringing the middle class under a unified pension scheme to prevent India from being a pension less society is commendable. Boosting the business environment by easing the regulations will be an impactful decision."

"From the industry perspective, reduction of the corporate tax from 30% to 25% is appreciated. GST implementation is another welcome move which will end taxation uncertainties in a lot of aspects. High allocation for infrastructure projects such as roadways and railways will give further boost to manufacturing. Reducing the CVD on certain goods in another area the industry is looking forward to, however more clarity is needed in terms of its implementation. Having said that; the budget missed considering the challenges faced by the telecom industry." Guru, Chariman & MD, Celkon Mobiles added.

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Mr. Suman Reddy

Managing Director
Pegasystems India

"It looks like a mixed budget from the IT Industry perspective. While there has been a significant reduction in the Corporate Tax from 30% - 25% and of tax on Royalty from 25% to 10% that will benefit the industry; on the other hand the budget did not provide any clarity on the transfer pricing issue which the industry was awaiting. Having said that, the budget has given the right direction to the economy going forward, the 150 Cr corpus on making India world class IT hub will bring in a positive sentiment. Focus on Infrastructure, Skill development and Manufacturing will enhance economic growth in the long term. Public expenditure in terms of investment in Infrastructure has also increased. It is good to see the government taking initiatives for startups, particularly the setting aside of Rs 1000 crores to set up Self Employment and Talent Utilization SETU supporting incubation and startups. The special attention on incubators and technology led startups is welcome as these will help the industry move from a services led to products led industry. The hike in expenditure on education by setting up premier institutions in states such as J&K, AP, Punjab, Bihar Karnataka etc and strengthening the primary, secondary and higher secondary education along with the increase in specific educational scholarships for students is will further support skill development in the country."

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Mr. Ramesh Loganathan

Vice President and Managing Director Progress Software
President HYSEA – Hyderabad Software Enterprises Association

While there was nothing dramatic in the budget, it broadly seems to be a growth inducing one. The budget provided a decent balance of Social reforms and growth initiatives including Make in India. Several small items seem like they may add up to have an impetus to make in India. The corporate tax reduction to 25% from 30% is straight away making more money available to the companies for investments and growth. The technical services tax reduction and reduction of duties on raw material import both should help the manufacturing sector. Streamlining the foreign investment process as well as the increased visa on arrival facility will hopefully also simplify external investments. Simultaneously, few measures seem in place to promote startups. While the details are unclear, the 150cr world class IT hub will hopefully encourage development of new technology and products. The 1000cr startup corpus, given the wording seems like will help setup and grow incubators and startup seeding. An interesting clause is 'mechanism for self employment to help with startups - SETU"

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Mr. Debasis Chatterji

CEO
Netxcell Limited

"The budget was great in terms of showing the direction for accelerating economic growth. The government has taken a long term approach by focus on improvement in existing services. The Jan Dhan Yojana, Coal Auction and Swacch Bharat program have given a very good start by dealing with the fundamentals of government fund distribution honestly, starting thermal power plants and to make India disease free. The budget showcases the fundamental change in the government’s thought process and is different from so called popular measures. The initiative to build 6 crore toilet under Swacch Bharat Yojana, will trigger growth in FMCG and ancillary industry and create lots of service jobs."

"It was a good budget for the It industry with an initial sum of Rs 150 Cr announced to create a world class IT hub to take advantage of our competitiveness. Further the reduction of Corporate tax and support to tech Start-ups with a mechanism for techno-financial incubation corpus of Rs 1000 crore; has given tremendous boost to the IT sector and startup ecosystem. Implementation of GST has been the greatest economic reform so far that will aid India to become business friendly. From the telecom industry perspective, there were a lot of expectations from the industry however the budget failed to offer any concrete initiatives for the sector."

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Mr. Neeraj Jewalkar

Founder and CEO
Smartur.com

The Budget in totality looks positive with enhanced focus on fast-tracking growth in Healthcare, IT, Infrastructure and Education sectors. The government has linked many initiatives to support and provide a boost to Make in India. Therefore giving additional attention to startups, the government has introduced a corpus of Rs. 1,000 Cr to support technology led startups and incubation centers. This will further enhance the startup ecosystem in India. Another significant move is the government’s emphasis on making the country more business and investment friendly. Easing of regulations and focus on increased public sector investments in infrastructure will boost the business environment in the coming year. IT Industry has received a good uplift in terms of reduction in the corporate taxation from 30% to 25% and also reduction of taxes on royalty being reduced from 25% to 10%. Moreover a 150 Cr corpus has been announced to make India a World Class IT hub; which should attract further investments in the sector. Strengthening of the education system through up gradation of primary, secondary and higher secondary education, enhanced funds allocation to the sector and introducing premier institutes in states like J&K, Punjab, AP, Karnataka etc will enable skill development across the country. The budget thus included a good pipeline of reforms which will be implemented in detail and bear fruits in the coming years.

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Mr. BVR Mohan Reddy
Executive Chairman Cyient Ltd. and Vice Chairman NASSCOM.

"Budget has a positive thrust on Startup and Technology but concerns persist:

Positives: For Start-up and SMEs, the Self Employment Talent Utilization (SETU), the techno-financial incubation scheme is a big positive; Atal Innovation Mission (AIM) platform to foster R&D and Innovation is another positive. Tax on royalty / fee for technical services reduced from 25% to 10% will be helpful in reducing cost of technology and give more incentive for technology deployment. Public Procurement Dispute resolution Bill is likely to streamline the government procurement process, and also address some of the pending disputes. This will give a fillip to Industry participation in domestic markets.

Negatives/Misses: Increase in Service Tax rate, by 1.5 %, is disappointing. Further, with mounting backlog in service tax refunds, the Industry will be impacted. Angel tax continues – Fair market valuation applicable to angel investments and capital receipts taxed in start-ups. This problem is unaddressed in spite of the focus on entrepreneurship and start-ups. Duality in service tax and sales tax applicability to product companies not addressed"

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Mr. Safir Adeni

President – TiE (The Indus Entrepreneurs) Hyderabad

"We have mixed reactions to the Union Budget. It is encouraging that the government has laid emphasis on job creators by promoting entrepreneurship. However, so far there were talks of Rs. 10,000 crore allocation for startups so we don't have a clarity whether in this budget the allocation of Rs 1000 crores under Self Employment and Talent Utilization (SETU) for the startups is in addition to the same or it is Rs. 1000 crore only now. Although the corporate taxes have gone down by 5%, the increase in service tax and surcharge will have negative impact on the startup ecosystem. Due to the change in the permanent base treatment, this could be a boost in Fund Manager startup space."

Budget 2015: All Talks, No Work For Tech-Startups, Reacts Tech Industry

Yesterday, Finance Minister Arun Jaitley presented the Union Budget 2015 at Lok Sabha, however not much space has been given to startup ecosystem of India in this year's budget except for just one scheme called SETU (Self- Employment and Talent Utilisation), which is essentially a mechanism of techno financial and incubation platform for tech-based startups. The government will be spending Rs 1,000 crore to help incubate these new companies.

Not to forget, in last year Union Budget of 2014, government announced $1.6 billion or Rs.10,000 Startup Fund to attract private capital by providing equity, quasi equity, soft loans and other risk capital for startups. Now, a next union budget has been announced but nothing has been done on ground level for previous announced startup fund, nothing has been released about how the fund will be used by the government and not even some kind of initiation process has been kicked off so far for the same.

Additionally, this year government again announced Rs.1000 crore startup fund with the scheme named as SETU. Questions are being asked about last year promised startup fund (Refer - What happened to Rs.10000 crore startup fund, YourStory, FirstPost).

Before this year's Union Budget are about to announced the highest expectations of startups from 2015 Budget was a favorable tax reform, as an Indian tech startup has to pay service tax, which is at the rate of 12.36 per cent - a rate similar to what large corporates pay and in this this year's budget service tax has been increased to 14%, biggest disappointment for startups. This is in addition to startups having to pay excise and income tax.

Additionally, startups in India wanted to make starting-up business in India a lot more easier as current procedure for starting a business requires the entrepreneur to run from corner to corner, office to office in order to get all the approvals, clearances and licenses for his new venture. The sector has been long demanding the setting up of one single window for all these approvals, so that the entrepreneurs can concentrate more on his business and less in running around.

"Modi has said a lot of wonderful things, but so far nothing has happened, other than a lot of public relations," legendary investor Jim Rogers, who co-founded the Quantum Fund with George Soros in the 1960s, said in a recent interview.

NASSCOM's Vice Chairman BVR Mohan Reddy reacted in on budget 2015 and said - "Increase in service tax rate is disappointing. Angel tax continues - fair market valuation applicable to angel investments and capital receipts taxed in start-ups. This problem is un-addressed in spite of the focus on entrepreneurship and start-ups. Duality in service tax and sales tax applicability to product companies not addressed."

8 Startups' Expectations From Budget 2015-16

With the budget announcement for the year 2015-2016 around the corner, all eyes are set on Finance Minister Arun Jaitley and what all he has in store for the citizens, companies of the country. Every industry and citizen of India expects something in the budget which will help them/him grow strong financially.  Whether the designer briefcase is able to stand on their expectations is something which we will have to wait and watch. The new government’s first budget last year gave a ray of hope to all young entrepreneurs as it announced a sum of Rs. 10,000 crore to boost capital growth in small and medium enterprises (SMEs) and startups in the country. What magic does the designer briefcase unfolds this year for the startups can only be seen on 28th February.

We at IndianWeb2 have put together a list of top 8 things the startup sector can expect in this year's budget.

1. Making starting up easier - The current procedure for starting a business requires the entrepreneur to run from corner to corner, office to office in order to get all the approvals, clearances and licenses for his new venture.The sector has been long demanding the setting up of one single window for all these approvals, so that the entrepreneurs can concentrate more on his business and less in running around.The sector hopes to get its long withstanding demand of a single window getting fulfilled in this year's budget.Young Entrepreneurs were quite encouraged when the Ministry of Entrepreneurship was set and there's for sure a need for someone to give this idea a push. In India there are about twelve different ministries operating their own startup and skill development programmes and there is an extremely urgent need to bring all these programmes, schemes etc. together so that they can prove to be effective for the industry.


2. Capital problem - While things have surely changed for good, entrepreneurs still face a hard time raising money for their new venture.The startup sector expects the budget 2015 to make capital more accessible and affordable for new businesses.Angel and venture investments needs to be encouraged in the country and there's an urgent need to sort out the issues surrounding the angel tax.Currently, the venture capital firms have to deal with three set of regulations for their each and every move.These are- CBDT Guidelines for Venture Capital Companies, 1995, Guidelines for Overseas Venture Capital Investments issued by the Department of Economic Affairs of Ministry of Finance in the year 1995 and Security and Exchange Board of India( SEBI)  1996.Each of these above said regulations come with their own set of rules and regulations that make it very difficult for a venture capital to follow. For an investor, time is money and the Venture Capital investors end up wasting a lot of their time fulfilling each and every rule and regulations set by these above said three regulations. The startups would be hugely benefited if the government is able to consolidate all these three regulations into one single regulation of SEBI.


3. Growth Scale - One of the primary concerns that startups have nowadays is the Minimum Alternate Tax (MAT). According to the current directions, an unlisted private company needs to pay MAT at 18.5% if the company is making a substantial amount of income under the Information and technology act, but  may not be showing profits on paper when income is calculated according to the rules under the Companies Act. For Startups this becomes a major hurdle as they have to pay a huge chunk of their incomes in taxes when they could have used the money to expand their businesses. Further, there are startups who are not making any profit at the moment but end up incurring loses due to taxes that they have to pay. This ends up affecting the cash flow of these startups.The budget this year can help such startups by making special provision of MAT for startups. The government can make special provisions where the startups don't have to pay MAT for an initial period of five years or make the top line 25 Crores. Such provisions will provide startups enough space for breathing to grow and set their business.


4. Thinking outside India - The Software Technology Parks of India (STPI) scheme played a major role in the initial success of India's Information and Technology industry.  The government  needs to introduce such STPI like schemes for startups in order to encourage entrepreneurs to come with more and more unique ideas and startups.The STPI scheme initially provided the new IT companies with physical spaces to work. It later went on to provide statutory support and good infrastructure facilities to technology based companies. There's an urgent need for such a scheme for all the startups (not just IT companies) and ring fence these new businesses in order to protect them from all the infrastructural and regulatory hurdles. All these schemes can also be synchronized with the Modi government's Make in India campaign.


5. Ease of Business - India as a country has a very bad image internationally when it comes to doing business in the country. All the successive governments haven't been able to much about the issue but the Narendra Modi government seems to be promising. Most of the regulations and rules that one needs to follow to run a business in this country are mainly old and obtuse. There is an urgent need to change these archaic rules according to current situations and scenarios. Manufacturing startups particularly find it very hard to survive as the powers of an inspector makes the acquiescence cost very high.Different taxes like VAT, excise, octroi and service only add up to the startup's troubles as they find it extremely difficult to come in terms with the complexities at play. This budget, the government mantra should be rules and regulations that are easy to identify and follow.


6. Ease of Exiting - If opening a business is difficult in India, it is approximately ten times more difficult to close a failed business venture. As a country India should make sure that if an entrepreneur fails in his/her venture, he is able to close his venture without much difficulties and start afresh. The existing process of exiting can be made so much easier if India's government focuses on digitizing it.In this age of technology when everything from booking tickets to  mobile recharging can be done online, the government can make similar arrangements of filling documents for a new venture. This would make the lives of new entrepreneurs so much easier as they will not have to run from pillar to pillar to get the business started.


7. Encouraging Risk Financing - There's a paradox situation at play here. Currently. the Foreign Institutional Investor (FIIs) registered with SEBI are allowed to freely invest and disinvest without taking prior approvals from FIPB/Reserve Bank of India.However, foreign based Venture Capital firms wanting to invest in startups based in India are required to take prior approval from RBI or FIPB. Same is the process when a foreign based investor is looking to sell his/her stake in a startup to a another foreign Venture Capital firm. Majority of the PE and Venture Capital firms operating in India are from foreign lands and such lengthy processes of approval makes it very unattractive for investors.


8. A detailed outline of the Rs. 10,000 crore startup fund declared in last year's budget - While the government was able to gain much appreciation about its declaration of  Rs. 10,000 crore startup fund in last year's first budget, much wasn't released about how the fund will be used by the government. According to some experts, the fund must be used for promoting financing in the form of quasi-equity, equity and various other forms of risk capital. While another school of thought believes that the money should be used for promoting entrepreneurship in universities and colleges.

8 Startups' Expectations From Budget 2015-16

With the budget announcement for the year 2015-2016 around the corner, all eyes are set on Finance Minister Arun Jaitley and what all he has in store for the citizens, companies of the country. Every industry and citizen of India expects something in the budget which will help them/him grow strong financially.  Whether the designer briefcase is able to stand on their expectations is something which we will have to wait and watch. The new government’s first budget last year gave a ray of hope to all young entrepreneurs as it announced a sum of Rs. 10,000 crore to boost capital growth in small and medium enterprises (SMEs) and startups in the country. What magic does the designer briefcase unfolds this year for the startups can only be seen on 28th February.

We at IndianWeb2 have put together a list of top 8 things the startup sector can expect in this year's budget.

1. Making starting up easier - The current procedure for starting a business requires the entrepreneur to run from corner to corner, office to office in order to get all the approvals, clearances and licenses for his new venture.The sector has been long demanding the setting up of one single window for all these approvals, so that the entrepreneurs can concentrate more on his business and less in running around.The sector hopes to get its long withstanding demand of a single window getting fulfilled in this year's budget.Young Entrepreneurs were quite encouraged when the Ministry of Entrepreneurship was set and there's for sure a need for someone to give this idea a push. In India there are about twelve different ministries operating their own startup and skill development programmes and there is an extremely urgent need to bring all these programmes, schemes etc. together so that they can prove to be effective for the industry.


2. Capital problem - While things have surely changed for good, entrepreneurs still face a hard time raising money for their new venture.The startup sector expects the budget 2015 to make capital more accessible and affordable for new businesses.Angel and venture investments needs to be encouraged in the country and there's an urgent need to sort out the issues surrounding the angel tax.Currently, the venture capital firms have to deal with three set of regulations for their each and every move.These are- CBDT Guidelines for Venture Capital Companies, 1995, Guidelines for Overseas Venture Capital Investments issued by the Department of Economic Affairs of Ministry of Finance in the year 1995 and Security and Exchange Board of India( SEBI)  1996.Each of these above said regulations come with their own set of rules and regulations that make it very difficult for a venture capital to follow. For an investor, time is money and the Venture Capital investors end up wasting a lot of their time fulfilling each and every rule and regulations set by these above said three regulations. The startups would be hugely benefited if the government is able to consolidate all these three regulations into one single regulation of SEBI.


3. Growth Scale - One of the primary concerns that startups have nowadays is the Minimum Alternate Tax (MAT). According to the current directions, an unlisted private company needs to pay MAT at 18.5% if the company is making a substantial amount of income under the Information and technology act, but  may not be showing profits on paper when income is calculated according to the rules under the Companies Act. For Startups this becomes a major hurdle as they have to pay a huge chunk of their incomes in taxes when they could have used the money to expand their businesses. Further, there are startups who are not making any profit at the moment but end up incurring loses due to taxes that they have to pay. This ends up affecting the cash flow of these startups.The budget this year can help such startups by making special provision of MAT for startups. The government can make special provisions where the startups don't have to pay MAT for an initial period of five years or make the top line 25 Crores. Such provisions will provide startups enough space for breathing to grow and set their business.


4. Thinking outside India - The Software Technology Parks of India (STPI) scheme played a major role in the initial success of India's Information and Technology industry.  The government  needs to introduce such STPI like schemes for startups in order to encourage entrepreneurs to come with more and more unique ideas and startups.The STPI scheme initially provided the new IT companies with physical spaces to work. It later went on to provide statutory support and good infrastructure facilities to technology based companies. There's an urgent need for such a scheme for all the startups (not just IT companies) and ring fence these new businesses in order to protect them from all the infrastructural and regulatory hurdles. All these schemes can also be synchronized with the Modi government's Make in India campaign.


5. Ease of Business - India as a country has a very bad image internationally when it comes to doing business in the country. All the successive governments haven't been able to much about the issue but the Narendra Modi government seems to be promising. Most of the regulations and rules that one needs to follow to run a business in this country are mainly old and obtuse. There is an urgent need to change these archaic rules according to current situations and scenarios. Manufacturing startups particularly find it very hard to survive as the powers of an inspector makes the acquiescence cost very high.Different taxes like VAT, excise, octroi and service only add up to the startup's troubles as they find it extremely difficult to come in terms with the complexities at play. This budget, the government mantra should be rules and regulations that are easy to identify and follow.


6. Ease of Exiting - If opening a business is difficult in India, it is approximately ten times more difficult to close a failed business venture. As a country India should make sure that if an entrepreneur fails in his/her venture, he is able to close his venture without much difficulties and start afresh. The existing process of exiting can be made so much easier if India's government focuses on digitizing it.In this age of technology when everything from booking tickets to  mobile recharging can be done online, the government can make similar arrangements of filling documents for a new venture. This would make the lives of new entrepreneurs so much easier as they will not have to run from pillar to pillar to get the business started.


7. Encouraging Risk Financing - There's a paradox situation at play here. Currently. the Foreign Institutional Investor (FIIs) registered with SEBI are allowed to freely invest and disinvest without taking prior approvals from FIPB/Reserve Bank of India.However, foreign based Venture Capital firms wanting to invest in startups based in India are required to take prior approval from RBI or FIPB. Same is the process when a foreign based investor is looking to sell his/her stake in a startup to a another foreign Venture Capital firm. Majority of the PE and Venture Capital firms operating in India are from foreign lands and such lengthy processes of approval makes it very unattractive for investors.


8. A detailed outline of the Rs. 10,000 crore startup fund declared in last year's budget - While the government was able to gain much appreciation about its declaration of  Rs. 10,000 crore startup fund in last year's first budget, much wasn't released about how the fund will be used by the government. According to some experts, the fund must be used for promoting financing in the form of quasi-equity, equity and various other forms of risk capital. While another school of thought believes that the money should be used for promoting entrepreneurship in universities and colleges.