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

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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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