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Union Budget 2019: Expectations from Indian Organizations including Startups

New Delhi, July 03, 2019- India's much awaited Union Budget for the fiscal year 2019-20 will be presented by the Finance Minister Nirmala Sitharaman on July 05, 2019. This budget is expected to lay focus on start-up eco-system in the country and announce various incentives for the next few years.

Here are some of the organizations in India including start-ups with their expectations from this year's budget (Fiscal 2019-20)

Karan Ratti - CEO & CSO, Ratti Corporation & Melblok: Startup incentives are key in this Budget if Jobs & Economic vibrancy has to be created. Startups are new and unestablished business entities with little operational stability and a lot of uncertainty, but they are also the fastest job creators not just directly but also through acquisitions which enhance the capabilities of larger established businesses. Incentivization for Startups acts like a cocoon for them to mature and create economic prosperity.

The government is to be appreciated for bringing focus on Startups and should now plow ahead to amplify this focus and relax several regulations that limit their growth. Elimination of Angel Tax, GST post cash realization v/s post invoicing, unburdening startups from numerous GST compliances, are some areas we would like to see happen. But focus now on the Startups that involve Manufacturing is Key. Issuing an Online platform for startups in the Manufacturing sector to utilize for obtaining & renewing various Licenses, NOCs, and Permissions is necessary to prevent wastage of the limited time and resources that startups have as well as eliminate bribery & corruption that despite efforts still remains at large. I am sure that startups would be happy to even pay for such a service if it helps keep startups clear from commissioner/inspector raj in any department.

Abhishek Deshpande, Co-founder of Recykal: "In the next budget, Government should provision grants, create impact funds targeted at startups working in the sustainability development areas like Waste management, Air Pollution, Climate change etc. This will not only encourage new ideas, new entrants in the space but create social, environmental, economic impact in the long run"

Rakshit Desai, Managing Director, FCM Travel Solutions – Indian Subsidiary of Flight Centre Travel Group: “According to the interim budget that was announced earlier this year, India is poised to become a $5 trillion economy in the next five years and is aspiring to become a $10 trillion economy in the next 8 years thereafter. The interim budget had offered some promising initiatives that will definitely augur well for the Indian Travel & Tourism industry. Initiatives such as UDAAN, Eastern Peripheral Highway and several other measures will boost not just domestic travel but also augment inbound tourism. For example, increased connectivity in the North-Eastern region of India, through rail, road and air (owing to projects such as UDAAN and Bogibeel Bridge) and further proposed allocation of INR 58,166 crore will provide much needed impetus to travel and tourism in the region.

Additionally, the fact that domestic passenger traffic has doubled during the last five years shows that there is phenomenal growth expected in the travel industry. On the whole, we expect that the Union  Budget 2019-20 is promising for the travel industry, complemented by further tax rebate for the middle-income group – more savings, more travel! A review of GST is needed as GST on hotels varies according to room tariffs (18 % to 28%). Tax on premium hotels in India is amongst the highest in the world, higher than even hotels in New York, London or Paris.”

Vipul Jain, CEO, Advancells: "We are eagerly waiting for the first budget of Modi 2.0 Government. Over the last couple of years of the last administration, the government had shown some serious commitment towards healthcare with Ayushman Bharat and such schemes. We are hoping the new government will take these agenda’s forward and there will be a push on new innovations in then healthcare sector under Make in India and Startup India programs."

Dhruvan Barar, Co-founder, Boingg:  "This budget will be a marker of the government's assessment and vision for the economy. Union Budget 2019-2020's allocation will determine whether E-commerce and tech startup will work in sync with the government's policy & Digital India initiative. We believe that Finance Minister Nirmala Sitharaman's budget will incorporate and allocate resources for various initiatives announced in the Interim Budget presented earlier this year. The abolishment of angel tax is one step towards it. Expecting the budget to go easy on credit loan processes and further provide a rebate in loan interest."

Gautam Thapar, CEO, Thapar Builders Pvt Ltd: "On July 5th 2019, Finance Minister Nirmala Sitharaman is expected to present 2019-2020 budget. It is expected that the government should bring stimulus to boost the real estate/construction industry. To further promote the sector incentives should be given to buyers to buy 2nd home which will definitely promote the real estate segment in the long run bringing smiles on the faces of the people associated with it. In coming budget we expect the applicable GST on the real estate to come down and should also bring down interest rate on home loans. Also, as proposed remove income tax from rental housing - ensuring builders to lease unsold inventory and hence it will help the government real it's target of housing for all."

Satanik Roy, Co-founder, HyperXchange: “The growing use of the internet and increasing dependency on smartphones has brought cheer to the internet startup sector in India. However, rural areas of India still demand better infrastructure to promote the penetration of smartphones. As the Indian economy moves towards creating its global digital footprint, it is expected that the Indian government will further promote penetration of smartphones by incentivising refurbished and introducing schemes which will include installing more wi-fi hotspots in rural and semi-urban areas. The UDAN (Ude Desh ka Aam Naagrik) scheme can also be given a boost, which will enable companies and startups to set up operations in smaller towns which will then indirectly lead to bridging the urban-rural divide.”

Ruhan Swain Rajput, Co-founder & Director, EINFOLGE: “While 2018 Budget at least acknowledged the issues of angel tax provisions and bring transparency into the process, saying that ‘Venture capital funds and angel investors need an innovative and special developmental and regulatory regime for their growth,” the Interim Budget from February 2019 steered clear of the issue.

But there’s more work to be done to boost the ecosystem. The major concerns range from incentive programmes for electric vehicles and cleantech, issues pertaining to Section 56 (2)(viib) and Section 68 of the Income Tax Act, lack of healthcare or defence-related innovation fund, GST issues, tax breathers for eCommerce and FDI in e-pharma have remain neglected owing to the General Elections 2019.

However, after a massive victory, the Modi government has a plethora of issues to deal with including unemployment, economic crisis, US-Iran sanctions implications and the trade war within WTO.  Given this Sitharaman will perhaps have very little room to stamp her authority while presenting her first budget as the finance minister. In such a scenario, it’s time to prioritise the start-up ecosystem’s demands from the finance minister and the new government. Whether it is the budget allocation for Start-up India’s fund of funds or prioritising tax reforms that directly affect the start-up ecosystem.”

Vishal Shah, Founder & MD, Storia Foods & Beverages Pvt. Ltd: “Five months post the interim budget; consumption & rural demand has witnessed a steep decline. Rural demand which was about 1.3 times urban demand has petered down in the FMCG & Agriculture sector. Over 50% of our agriculture is still rain fed, hence, there is an associated uncertainty leading to reduction in growth. There is thus a need to increase the coverage of irrigation. Farmers in drought-hit areas suffer the most in the absence of rain.

With the new government, we seek a boost to the ailing sector and look beyond short-term measures such as loan waivers and cash transfers for the farmers. We should move away from consumer to producer-centric price policy. Agricultural markets have witnessed only limited reforms. Resolving GST issues related to Farmers Producers Organisations, incentive for agro processing units and enhancing investments in the R &D in the agriculture sector should be focused. The government should consider investing in technology that could make water management more efficient. Government’s focus on improving agricultural productivity with an emphasis on organic food forms will further strengthen the ambitious vision of a healthy India. This will promote F&B manufacturers, food service providers, and consumers to embrace natural and healthier products and lifestyles.”


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