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India's Union Budget 2020: Expectations of Industry Leaders and Entrepreneurs



On February 1st 2020, India’s Hon’ble Minister of Finance, Smt. Nirmala Sitharaman, will present the union budget 2020. Union budget plays an important role in determining the country’s future economic activities and growth. The effects of a government's budget on society and the political economy are of considerable concern to economists as well as to consumers and taxpayers.

Various Industry leaders and entrepreneurs have their own opinion and expectations from this year’s union budget.

Startup Terminal presents budget expectations from various industry leaders and entrepreneurs (Part III).

Manish Rathi, CEO & Co-founder, RailYatri

“We would like the upcoming budget to continue focusing on infrastructure and transportation sector especially intercity mobility which is key to the growth of economy of small cities. The initiative by government to recognize private cab aggregators like OLA, UBER, was a welcome move for the intracity mobility and will be the game changer for that industry. Similarly, we look forward to intercity bus aggregators considered as a recognized entity in the intercity mobility ecosystem. We would love to see the government introduce provisions to enable private companies towards transportation infrastructure for boarding and dropping within the city limits. Furthermore, the government should also be looking at making it easier for Startup’s to operate in the country. While there were policies introduced regarding Angel Tax in the previous budget, the issue continues to remain unresolved. Resolution of this situation will really help in encouraging investors to invest more in Indian Startups. Keeping in mind the current environmental condition, there is a dire need to invest more towards promoting the manufacturing of electric vehicles with greater than 500 kms run on single charge, which in turn, will go a long way in reducing carbon footprint. A dedicated fund for EV technology development and research needs to be allocated to promote development of indigenous technology in this area.”

Meena Ganesh, MD & CEO, Portea Medical

India has one of the lowest spending on healthcare globally. While it was stated that the country is set to increase healthcare spending to 2.5% of the GDP by 2025, it continues to stand at 1%. We hope to see some action around this in the upcoming budget. A major focus must be given to the home healthcare industry which is one of the ways to realize the government’s vision of affordable healthcare for all. However, current taxation policies and regulations do not cover home healthcare and diagnostic tests and other at-home aspects still form a large part of people’s out of pocket expenses. Home healthcare is not recognized as a mainstream sector and should be brought under the ambit of governmental schemes like the Ayushman Bharat yojna. We also expect to see an increase in the limits on reimbursement of expenses on diagnostics, preventive health check-ups, etc. and for home healthcare to be made a part of this exemption. Critical healthcare equipment such as ventilators, wheelchairs, crutches, and medical equipment spare parts should be exempted from GST. This will help make quality healthcare more accessible.

While it is encouraging that steps have been taken to register services like elder care homes and home care agencies for the provision of care to elderly, the real challenge is in terms of lack of facilities. Add to this is the cost of elder care and complete non-availability of insurance.

Sarvesh Shashi, Founder, SARVA

Data from the World Economic Forum indicates that over 77% of Indians will be under the age of 45 by the next decade. However, despite being one of the youngest countries, we are also the most unfit with estimates suggesting that 1 in every 3 Indians are medically unfit and suffer from preventable lifestyle disorders. In the last five years, the government has exhibited a keen interest in the revival of Yoga. The hon’ble prime minister has personally taken a lot of interest in positioning Yoga as a universal exercise that can help people stay fit, look good and be healthy. While these have been welcome and have helped encourage players like SARVA who are ensuring that there is a more organized and holistic approach to the concept of yoga, we still have a long way to go. Preventive health and wellness is the need of the hour for each given the high instances of disease and lifestyle-induced illnesses in our country. In order for holistic health to be made more attractive to consumers, it is important that the tax component on commercially-run Yoga practices and institutes be revisited since yoga can help address chronic medical ailments and fill the gaps in traditional healthcare.

Under section 80D of the Income Tax Act of 1961, taxpayers can claim tax deductions on health checkups and health premiums; preventive wellness, however, is still placed under a high tax bracket. This year however we hope that the budget goes beyond providing tax deductions to those getting back to good health after falling sick but also supports and incentivize those who take care of their own fitness. This could potentially include fitness services such as memberships to gyms, fitness studios, commercially-run yoga centers, etc. 

Prasad Rajappan, Founder and CEO, ZingHR

We would like to see a more visible and tangible steps to support and provide a level playing field for Indian startups. More incubation centres with public-private partnerships could help give access to lot of government projects. GeM, the government e-market place has to be made more popular for startups to really start benefiting from government projects / spending.

Women entrepreneurship both in cities and rural areas needs to be incentivised. This will help in our dream to have inclusivity and diversity." 

Akshita Gupta, Co-founder and CMO, ABL Workspaces

“Compliances for start-ups’ is a major concern. Most young entrepreneurs, with conviction in their ideas, jump into the business blindly, later realising the amount of efforts that goes into putting together monthly GST returns, TDS filings, PF, ESI, etc., along with that different mandatory audits is a real focus diverter. Entrepreneurs need to focus on their core area of expertise and only restructuring compliances can enable that. Start-ups’ need more support in indirect taxes. Thus, we feel TDS should be 2% for coworking sector as the spaces are on rent and overall margins of coworking operators in most cases are less than 10%.”

Amit Choudhary, Founder & CEO, Dawaa Dost

The government had pushed for affordable and accessible healthcare in its last term, and we hope that this year’s budget will also have some concrete action plans to realize this vision. Innovative, tech-based, large-scale and affordable healthcare solutions are the need of the hour in India and our expectations from the budget also revolve around the same.

We hope the government will simplify regulations for pharmacies buying medicines from GST paid channels. There should be 100% input credit for such entities and the working capital must be freed even under circumstances where the manufacturer or authorized distributor have erred on paying the deposit. The retailer has no recourse to anyone else nor the margins to absorb the entire GST as is the case today. We also hope the government will consider offering income tax breaks to affordable medicine providers like Dawaa Dost as this will make them more accessible to the masses. There can be specific provisions for the creation of a sunrise industry for providingincome tax subsidies for hiring new talent from a PF contribution standpoint, accelerated depreciation on stores, and subsidy on technology development via grants. There is a huge opportunity in terms of building a new industry and the need of the hour is for government support like the one provided to the IT sector two decades back.

"Indian economy seems to be on a course correction mode, both in terms of policies and some bold steps. One of the initiatives that I personally am an admirer is the Rashtriya Swasthiya Bima Yojana (RSBY) under the Ayushman programme. In this year’s Budget, I would like to see an additional funds for this programme and a better spread of its usage, say from the current 50 lakh beneficiaries to 5 crores.

Neha Rastogi, Founder and COO, Agatsa

The start-up ecosystem in India is thriving thanks to some conducive government policies announced in the last budget. Given this, startups in all sectors including those focusing on healthcare and health tech innovation are going to witness rapid growth in the years ahead. However, the issue that needs to be addressed at the outset is India’s current healthcare infrastructure and allotted budget which are not adequate to ensure universal healthcare services to all. This is where innovations in medical devices and services come into picture and we hope the budget will focus on this aspect. A growing number of tech-enabled companies like Agatsa are stepping in to provide specialized healthcare monitoring solutions through portable devices using cutting edge technology. The need of the hour therefore is to provide adequate funding and support to fuel further innovations under the Make in India and Digital India campaigns.

While the market for healthcare startups and digital healthcare devices is robust, we also need more support from the government to promote indigenous innovations and provide an impetus to domestic device manufacturers. We would like to see the government procure more Indian products from the market so that our dependency on foreign imports can be brought down to a minimum. This will not only boost the Indian startup niche but also make healthcare services more affordable for the common people.

Vikas Bagaria, Founder, Pee Safe

The femtech industry has a huge potential and is expected to reach $50 billion globally by 2025, as per estimates by Frost and Sullivan. Though this is a relatively new industry, it aims to address some of the age-old problems women have been facing and is projected to be the next big thing in the women’s health and hygiene market.  It promotes the use of digital health applications such as hygiene products, diagnostics, reproductive health monitoring systems, etc. to help women take control of their health. Given this, our expectation from the budget 2020 centres around government policy and regulation to enable ease of doing business through centralized policies. This will also attract more foreign investment opportunities in the segment. There is also a need to simplify the taxation process and make early stage funding easier. While the government has done well in terms of facilitating foreign investments in India, this outlook needs to be maintained going forward to effectively promote more innovations under the Make in India campaign. Even though there is immense potential, the investor confidence in the Indian femtech industry is still considerably low – and we hope the policies to be announced in the budget ahead will be an enabler.

Kunal Jain, Founder & CEO, Analytics Vidhya

The government realizes the importance of new technologies like Artificial Intelligence and Machine Learning. I expect to see decisions to fuel the growth of these technologies in several domains. For example, there are a lot of start-ups doing work on use of non-traditional data sources to build better lending solutions and enabling lending to customers with little or no-access to loans. Any reforms to support and enable these start-ups can have a huge long-term impact and can further differentiate India's Banking/FinTech Industry. 

Neeraj Mehta, CEO, ImmunifyMe Healthcare Technologies Pvt. Ltd

The Union Budget 2020 comes at a crucial time when the country is struggling to keep up with the rest of the world for Universal Immunization Coverage amongst children. While it was stated that the government would increase healthcare spending to 2.5% of the GDP by 2025, it continues to stand at around 1.4 % in 2019. We sincerely hope that this increase in India’s healthcare budget will come in effect in this Budget. We also hope that a large portion of this will be spent towards bridging the early child-health gap by 'Leaving No Child Unattended', eliminating disparities of vaccination and nutrition.

India committed about Rs. 52,000 Cr. for its immunization program between 2018 and 2022, however with GAVI's support ending this year, India will need an additional Rs. 18,000 crores by the year 2022 in order to achieve 90% universal immunization coverage. 

With the launch of Intensified Mission Indradhanush 2.0 (IMI 2.0), India has the opportunity to achieve further reductions in deaths among children below five years of age, and achieve the Sustainable Development Goal of ending preventable child deaths by 2030. However, this cannot be done with the old paper-based vaccination records, and only technology can help in achieving this aggressive and important target. The government must intensify its partnership with private health-tech companies who are into bridging the immunization gap, and must allocate funds towards adoption of technology solutions for measuring and managing the key denominators of early child health.

The future of India is in its children’s health and as a country we must start allocating more funds towards full immunization coverage to secure the future health of children and that of the nation.

Pravin Khandelwal, Chief Consultant Leadership and Motivation, Risers Accelerator.

As the majority of startups in their first few years of establishment come across various structural and non-structural challenges, but what affects them most is the lack of financial support. The recent NBFC crisis and slow economic growth were barriers to startups that have experienced a great time in 2018-19. But, young entrepreneurs of India have full confidence in the economic policies of the NDA-led government, and they are quite optimistic that the Finance Minister will introduce some more incentives to foster Startup India campaign. Besides, we expect that FM will give special emphasis on the technology sector, which is the driving force for large numbers of startups. 

Prateek Bhargava, Founder, Mindler

“As the Finance Minister is all set to present the Union Budget 2020, we believe that the Finance Minister should focus towards making India a Knowledge Economy. Given the plans shared by the Govt, focus on R&D infra in higher ed institutes and modernisation & digitalisation of education solutions will be the key. With the ed-tech industry expected to be over USD 2 Billion by 2021, we expect introduction of a special tax exemption for the EdTech companies. India is already facing the issue of unemployment which will be resolved by enabling our human resources with quality education. The current GST rate of 18% on the companies selling educational services should be reduced to make such services affordable to the masses. In the ensuing budget, the government should consider allocating more funds for education in crucial segments especially with the New Education Policy. The Niti Aayog has also suggested on the similar line that the govt. should increase the expenditure on education to 6% of the GDP over next three years which is currently 4.6% of GDP.”

Sakshee Katiyal, CEO of Home&Soul

“The government has taken immensely important measures for the real estate industry. Despite that customers and positive sentiments are still missing in the sector. Reforms only help if there is positive environment in the economy. For the same the government needs to implement benefit to the salaried class through increase in income tax rebate.

Another important incentive which government can offer is rebate on home loans for first time home buyers by reducing interest rates to 6-7%. The government should look into increasing the rebate on interest on home loan to 5 lakhs. The government should also fast track the implementation of INR 25,000 crore of financial help extended for completion of the stuck housing projects to improve sentiment.”

Ankit Dudhwewala, Founder, CallHippo & SoftwareSuggest

"Last year has been tough for the Indian economy. With the GDP growth rate going down deep, I believe there should be some short-term remedies to stabilize the economy first, combined with a well-structured long-term plan to keep all the industries in faith. Looking at the meetings the Prime Minister has had with the industry experts in the past few weeks, I am sure something fruitful has come out of it and will reflect in the budget.

As far as the IT sector is concerned, cybersecurity is still a major concern and we should see some dedicated allocations for that. Making digital payments mainstream is still a major priority of the govt which directly benefits all-digital businesses like us. Expecting some big steps in that area too.

Overall, the budget 2020 should be and most likely to be a mixture of some sweet and some bitter announcement."

Sanil Sachar, Co-founder, Huddle

"The government should focus on building an ecosystem where customers of startups are incentivized to buy their products. In order to assist this, government agencies can either be encouraged to be the first customer of the startup or what seems more doable is to provide some tax exemptions to the purchasers of the startups products/services as an added incentive to attract them to test their products and in return become their valuable customers. By providing these exemptions, the startup can get a level playing field to compete with larger brands in their sectors.

Also, the last budget missed the mark when it came to major enclosures for the technology start-up sector. We are positively looking forward to a course correction this year. As India is becoming a hub for homegrown start-ups, it would be great if the government can take this up as a priority area in this budget and assign more funds and announce policies that would encourage the start-up sector. This will help create a more welcoming ecosystem for the industry players and catalyze innovation."

(Views expressed are of different industry leaders. Email us your feedback at startupterminal@gmail.com)

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