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 V).
Sunny Kataria, Vice President, Real Estate, OLX India
“2019 has been a year of hope and despair for the real estate sector. The introduction of RERA Act has brought transparency and trust in the market, which is bringing buyers’ confidence in buying and they are coming back to the market.
The recent changes in the affordable housing sector have been tremendously hailed by developers and residents alike. A further boost in the sector will most definitely improve sentiment across the industry. The government’s alternative investment fund (AIF) worth INR 25,000 crore, aiming to offer last-mile funding to stuck housing projects, is expected to bring much relief to one of the biggest problems that have been plaguing the sector. However, it is yet to be seen how the industry will fare in 2020 given the number of funds to settle the issue.
Apart from this, a one-time waiver or restructuring of loans for developers is also a move that is expected to be introduced by the government. The upcoming union budget definitely seems
promising for the residential real estate sector, given the crucial curve at which it currently stands.”
promising for the residential real estate sector, given the crucial curve at which it currently stands.”
Sudhir Sharma, VP – Finance & Corporate Development, GoMechanic
“The Auto service sector is still split between Authorized Brand Workshops and small unregulated neighbourhood workshops. There is huge potential to attract capital to consolidate the space with standardized workshops offering multi-brand services under one roof. To this effect, the Union Budget can create avenues for easier access to capital and also simplify the lending procedures for fund availability for entrepreneurs to upgrade their workshop equipment. A single GST rate on services and consumables will also come in handy.”
Amit Gupta, Co-Founder & CEO, YULU
It is important to create a framework for making debt capital available to EV startups. The government and especially nationalized banks can collectively work together to support startups and companies in the segment. Hence Government’s consideration of loan guarantee schemes to encourage banks to lend to EV manufacturers and operators, with parity on lending terms would go a long way. It is essential to have dedicated and accessible Parking Space for shared mobility vehicles at all metro stations to enable Multi-Modal Integration and First and Last Mile connectivity. There is a need to create Footpaths & Non-Motorized Transport (NMT) Lanes within 5 Km of all current/future metro stations under the Metro Rail Policy. The need of the hour is to promote mobility as a service using EVs. We also recommend that incentives must be given for purchasing ‘low speed’ EVs as this will enable sustained provision of affordable and environment-friendly transportation options for the masses. Currently, Startups offering mobility as a service using electric vehicles are mandated to charge 18% GST on their revenue, rather we propose parity with GST chargeable to OEMs on their EV revenue (5%). With regards to the tier-II cities, we would request the government to provide Viability Gap Funding (VGF) support to make shared-mobility available and viable. Overall, we recommend a national policy for parking infrastructure for shared mobility must be created.
Aditya Vazirani, CEO, Robinsons Global Logistics Solutions
Currently, logistics costs amount to 13-14% of the GDP, which is over 2.5 trillion – much higher than the cost in other countries. This is detrimental to the competitiveness of domestic products in the international markets, thereby impacting exports. With an aim to address this, the government has drafted the National Logistics Policy (NLP), which is designed to promote faster and seamless movement of goods across the country, while reducing the transaction costs. In line with this, the National Infrastructure Project (NIP), which is set to develop over 102 Lakh Crore worth of Infra projects in the next 5 years, is also designed to aid in faster and cost-effective logistics solutions. While these are progressive policies, effective and timely implementation of these will be vital to generate the expected results.
Apart from the above, budgetary policies that can strengthen India’s domestic markets, especially the manufacturing and the transportation sectors, can help boost exports and international trade, thereby strengthening the logistics sector and bring in the foreign exchange.
Nalin Agrawal, Founder and CEO, Snapmint
The e-commerce industry in smaller cities across India is witnessing an increase in sales, thanks to deeper penetration of inexpensive mobile data plans and better connectivity, in addition to cashless transaction apps which are safer and easier than ever before. An estimated 56 million+ digital shoppers from smaller cities and rural areas are online. At least 56 airports and 31 heliports being developed as a part of the Government’s efforts to provide connectivity to unserved tier 2 to 5 cities and towns with potential to offer aviation services will be a boon in times ahead. However, the budget should cut down duties on Oil to reduce transportation costs so that the cost of distribution in Tier 2 to 5 cities comes down. The government needs to continue showing strong support to these cities by trying to upgrade the urban infrastructure by upgrading the MRTS, airports; introducing SEZs etc.
Dr. Sujit Paul, Founder, Woofwoofnow
The Petcare segment has attained significant growth in the last few decades. The public has begun to welcome the four-legged species into their homes and hearts. There are over 19 million registered pets in India. The increase in pet owners has a direct correlation with the demand for quality pet care products. The product segment has diversified in both tangible and intangible services. Consumers are incredibly conscious of the brands and product profiles utilized for their pets. The pet food, toys, and accessories sector have a net value of over USD 334.3 million. The intangible solutions like healthcare, counseling and other allied services. The consumer preferences reinstate the demand factors in these avenues. Budget 2020 should focus on all essential elements and should allot the resources for sustainability and development. We have high expectations for the budget as it would be a crucial step in the advancement of the industry.
Arushi Jain, Executive Director, StayHappi Pharmacy
“All citizens have the right to quality and affordable healthcare solutions. Medicines and drugs are a significant part of healthcare expenses. The pharmaceutical industry has attained tremendous revenue due to competition and consumer demand. Some companies are attempting to bridge the demand and cost quotient by providing generic medicines. This approach would minimize the branding and promotions costs by significantly lower the cost of the product. This strategy would redefine the overall functioning of the health care industry. This would also guarantee affordable and authentic medical care to all people irrespective of their economic status. We implore the Government to allot funds for the research, production, and marketing of this segment. The health care budget would generally concentrate on the overall advancements of the sector. The Government is keen on providing quality health care solutions to the people in the Country. Budget 2020 should focus on improving the lives of the ordinary human.”
Rohit Kulkarni, Vice President, Payoneer
“In2019, we saw our exporters rapidly grow and do exceedingly well! This growth is a strong indication of their entrepreneur zeal and increasing demand for Indian goods and services globally. We remain positive on the India growth story this year as well. We look forward to policies that help exporters source enhanced working capital for their growth aspirations and simplified documentation for cross border transactions. Fintech innovators and the government should collaborate effectively in providing meaningful solutions for Indian cross border sellers.”
Akshay Chaturvedi, Founder & CEO, Leverage Edu
Akshay Chaturvedi, Founder & CEO, Leverage Edu
“I am hoping for higher education loans to become more tax-friendly than they are right now. The deductions should be across the entire life of student loan and be on both, the principal and the interest component. Our biggest challenge as a fast-growing economy is employability – so making higher education more accessible and more friendly to the new generation is the absolute basic step that we should see now.”
Nitin Kapoor, CEO and Co-Founder, IBA Crafts
“The textile industry has attained significant developments in the past decade. This progression is experienced in all avenues inclusive of fashion trends, consumer perception, shopping pattern and technological advancements. Each element has holistically evolved and has become influential aspects that direct the growth of the segment. The eCommerce portals play a critical role in the sales and promotion of all industries on a globally level. Consumers are supportive of this medium due to varied factors. The company innovate unique strategies in addition to the generalised perks given by the portals. Brands are more conscious of reducing wastage and enhancing the consumers experience. The budget 2020 should concentrate and inspire entrepreneurs to ideate and implement efficient methodologies that can redefine the outlook of the industry. This financial aid would provide them with the scope to invent and identify strategies and mechanisms that would highlight the role of the Indian textile industry in the global market.”
Tikendra Yadav, Founder & CEO, Pepfuels
“Oil and gas are indispensable elements that contribute to the advancement of the Country. The demand for this industry is consistently rising in the country, though it has slightly dropped in the past year. There was a steady increase in the fuel prices owing to the global economic turbulence. The privatisation decision of the oil industry has received mixed responses for the masses. There are significant advantages to this decision. It is expected to redefine the standards of the industry and shift the focus towards enhancing the consumer experience. Implementation of technology-oriented solutions has become the need of the hour to uplift the overall industry. We expect the budget 2020 to allot resources and funds for this development. Startups and other organisations have started to implement these applications. This can be boosted with the support and guidance of the Government schemes. It would aid the companies to balance the price wars and provide fuel at an economical price.”
Arjun Bajaj, Founder, Shinco India
We expect from this upcoming budget – 2020 that tv’s in 32 inches and above sizes are expected to come in the 18% GST slab instead of the current 28% as TV is not considered a sin product in the current GST slab. The government should take additional steps to improve the infrastructure of the nation to help the manufacturers and the sellers in faster deliveries as well as setting up bigger and advanced manufacturing units. Also, from the aspect of Indian manufacturing brands, we hope for the government to take some measures to reduce the input cost on the imported components to compete with the raising upcoming opportunities for the technology giants in India. Due to no open cell manufacturing plant in India, the customs duty should be zero.
Vaibhav Gupta, Co-Founder, Rein Games
“ESOP taxation policies are something that startups can significantly benefit from. ESOPs are the single most important tools that cash strapped startups can use to attract talent with the right commitment and mindset. However, the tax implications at the time of exercising these ESOPs make them lose their shine significantly. Taxing ESOPs at the time of liquidation event, which is when the true worth of ESOP can be assessed is not only fair but can also help serve the purpose ESOPs are meant for.”
(Views expressed are of different industry leaders. Email us your feedback at startupterminal@gmail.com)
