Startup Ecosystem Gears Up for Union Budget 2026
As Finance Minister Nirmala Sitharaman prepares to present her ninth Union Budget on February 1, 2026, Bharat’s startup ecosystem has stepped up demands for targeted tax relief and improved access to growth capital amid a prolonged funding slowdown.
Startup founders and investors are calling for income tax exemptions for startups with turnover up to ₹50 crore, complete removal of the angel tax, and the creation of a ₹10,000 crore dedicated venture debt fund to support scale-ups struggling to raise equity capital.
Funding Winter Deepens Pressure on Startups
According to industry bodies including NASSCOM and TiE, more than 1.2 lakh DPIIT-recognised startups are currently navigating a funding winter. Domestic venture capital inflows declined 25% year-on-year in Q4 2025, tightening cash runways and delaying expansion and hiring plans.
Founders argue that without fiscal intervention, early- and mid-stage startups risk shutdowns or distress acquisitions, potentially weakening Bharat’s innovation pipeline.
Policy Reforms Aimed at Reviving Unicorn Momentum
Industry leaders believe Budget-led reforms could revive risk appetite and accelerate startup growth. The proposed venture debt fund is expected to provide non-dilutive capital, while tax relief measures could free up cash for product development and market expansion.
The startup ecosystem is targeting 50 new startup listings by 2027, positioning Bharat as a global innovation hub amid evolving supply chains and digital adoption.
What Startups Want From Budget 2026
- Higher turnover threshold for startup tax exemptions
- Complete abolition of angel tax
- Dedicated venture debt fund for growth-stage startups
- Measures to revive domestic VC participation
