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.
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.
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 II).
expectations from various industry leaders and entrepreneurs (Part II).
Diwakar Nigam, Chairman and
Managing Director, Newgen Software
Managing Director, Newgen Software
“The Indian IT sector provides
significant opportunities for growth. The government can further incentivize
organizations creating software intellectual property through tax exemption on
IT exports. We expect that the government would bring in more business-friendly
policies and take steps to reduce regulatory compliance, thereby creating a
holistic environment for ease of doing business.
significant opportunities for growth. The government can further incentivize
organizations creating software intellectual property through tax exemption on
IT exports. We expect that the government would bring in more business-friendly
policies and take steps to reduce regulatory compliance, thereby creating a
holistic environment for ease of doing business.
As
data security, privacy and compliance become increasingly critical, the
government should encourage the private sector to set up data centres in the
country. The government should also continue its thrust towards various
initiatives, namely Digital India, Skill India, Make in India and emphasize on
technologies that encourage digitization and creation of rural
e-infrastructure.
data security, privacy and compliance become increasingly critical, the
government should encourage the private sector to set up data centres in the
country. The government should also continue its thrust towards various
initiatives, namely Digital India, Skill India, Make in India and emphasize on
technologies that encourage digitization and creation of rural
e-infrastructure.
Sustaining
the global competitiveness of the Indian IT sector will require increased
government investments in skill development for the new-age technologies such
as artificial intelligence, big data analytics, robotics, and blockchain.
Reintroducing the SEZ scheme and streamlining the current SEZ processes, will
give the required boost to the IT industry and provide a more conducive
business environment. The labour laws governing the IT sector also require
streamlining owing to its unique requirements.”
the global competitiveness of the Indian IT sector will require increased
government investments in skill development for the new-age technologies such
as artificial intelligence, big data analytics, robotics, and blockchain.
Reintroducing the SEZ scheme and streamlining the current SEZ processes, will
give the required boost to the IT industry and provide a more conducive
business environment. The labour laws governing the IT sector also require
streamlining owing to its unique requirements.”
Bhavin
Turakhia, Founder & CEO, Flock
Turakhia, Founder & CEO, Flock
“The
two important sectors that should be an area of focus in the coming Union
Budget should ideally be – technology and startups. Last year, we saw India
jump 14 places to be 63rd among 190 nations in the World Bank’s ease of doing
business ranking, a testimony to the fact that India has made significant
strides in making it easier for startups to set up their operations. In the
upcoming budget, we would like the government to bring in measures to ease the
compliance and filings guidelines for startups and eradicate the current penal
provisions. Also, with technological disruption being a catalyst for the growth
of startups today, we expect the government to make significant investments in
technology hubs that will help strengthen emerging technologies such as
artificial intelligence, machine learning, internet of things etc. As India is
witnessing this boom in digital technology adoption, it has put us on the
global map and we need to ensure that we take the relevant steps to ensure that
our country is at the center of the fourth industrial revolution.”
two important sectors that should be an area of focus in the coming Union
Budget should ideally be – technology and startups. Last year, we saw India
jump 14 places to be 63rd among 190 nations in the World Bank’s ease of doing
business ranking, a testimony to the fact that India has made significant
strides in making it easier for startups to set up their operations. In the
upcoming budget, we would like the government to bring in measures to ease the
compliance and filings guidelines for startups and eradicate the current penal
provisions. Also, with technological disruption being a catalyst for the growth
of startups today, we expect the government to make significant investments in
technology hubs that will help strengthen emerging technologies such as
artificial intelligence, machine learning, internet of things etc. As India is
witnessing this boom in digital technology adoption, it has put us on the
global map and we need to ensure that we take the relevant steps to ensure that
our country is at the center of the fourth industrial revolution.”
Jeetender
Sharma, Founder & MD, Okinawa Autotech Pvt. Ltd
Sharma, Founder & MD, Okinawa Autotech Pvt. Ltd
“The
revival of the automobile industry is expected to be on the priority list in
the upcoming Budget session. Low market sentiment and the transition to BS VI
emission standards were said to be the prime reasons for the industry slowdown
last year. The industry is hopeful that the government will announce policies
to support the industry and increase the demand in the market. Another buzzing
word is about the growth of the electric vehicle segment in India. EV
revolution has certainly picked up well in India. The government has also
fuelled the market with subsidies and incentives to accelerate adoption.
However, the cost of components and import duty remains a big concern for EV
manufacturers. Certain parts of products are still imported, due to lack of
manufacturing facilities, and this forms a major part of the overall product
cost.”
revival of the automobile industry is expected to be on the priority list in
the upcoming Budget session. Low market sentiment and the transition to BS VI
emission standards were said to be the prime reasons for the industry slowdown
last year. The industry is hopeful that the government will announce policies
to support the industry and increase the demand in the market. Another buzzing
word is about the growth of the electric vehicle segment in India. EV
revolution has certainly picked up well in India. The government has also
fuelled the market with subsidies and incentives to accelerate adoption.
However, the cost of components and import duty remains a big concern for EV
manufacturers. Certain parts of products are still imported, due to lack of
manufacturing facilities, and this forms a major part of the overall product
cost.”
Bishan
Jain, Director, Goldmedal Electricals
Jain, Director, Goldmedal Electricals
“The
Indian manufacturing sector has become one of the most attractive destinations
for investments in the recent past. While the government has already unveiled
plans to boost growth in manufacturing, construction sectors and improving
infrastructure, the government should ramp up its efforts in the upcoming
budget. The government must underline its continued commitment towards
electrification of villages across the country. Furthermore, it should
definitely put in additional efforts on solar energy projects, with the right
incentives, which can be a valuable avenue for income generation and also help
combat climate change. As consumers are becoming more aware about environment sustainability,
there should be more focus on promotion of sustainable solutions that will help
in reducing India’s carbon footprint.”
Indian manufacturing sector has become one of the most attractive destinations
for investments in the recent past. While the government has already unveiled
plans to boost growth in manufacturing, construction sectors and improving
infrastructure, the government should ramp up its efforts in the upcoming
budget. The government must underline its continued commitment towards
electrification of villages across the country. Furthermore, it should
definitely put in additional efforts on solar energy projects, with the right
incentives, which can be a valuable avenue for income generation and also help
combat climate change. As consumers are becoming more aware about environment sustainability,
there should be more focus on promotion of sustainable solutions that will help
in reducing India’s carbon footprint.”
Sheshgiri
Kamath, Co-founder & CEO of Kapture CRM
Kamath, Co-founder & CEO of Kapture CRM
The
tax cuts implemented by the finance minister, combined with the new fiscal
boost that was announced recently are sending the right signals to the markets
about the government’s intent to address the economic concerns. We expect to
see a cutting-edge impactful budget this time around which focuses on landmark
reforms.
tax cuts implemented by the finance minister, combined with the new fiscal
boost that was announced recently are sending the right signals to the markets
about the government’s intent to address the economic concerns. We expect to
see a cutting-edge impactful budget this time around which focuses on landmark
reforms.
With
the recently announced RBI eKYC and other digital measures, the internet
economy is going to witness some key reforms. 2020 should be an interesting
year for consumer internet startups.
the recently announced RBI eKYC and other digital measures, the internet
economy is going to witness some key reforms. 2020 should be an interesting
year for consumer internet startups.
Vinay
Agrrawal, Founder of Hubbler
Agrrawal, Founder of Hubbler
Startups
like us have a huge expectation from the upcoming budget to make India the
preferred hub for this sector.
like us have a huge expectation from the upcoming budget to make India the
preferred hub for this sector.
Some
expectations that we want are: to consider Unlisted securities treated at par
with listed securities when taxed for long- term gains. GST has already become one of the biggest
economic reforms that our country has witnessed. To make it more successful,
there needs to be a simplification in the filing process for companies. GST is
now accountant-friendly, it needs to become business-friendly as well. Also,
startups with less than 25 cr turnover should get automatic exemptions from
TDS. We spend money faster to grow faster. But because of TDS, our precious
funds get stuck, costing us dearly in terms of working capital and interest.
expectations that we want are: to consider Unlisted securities treated at par
with listed securities when taxed for long- term gains. GST has already become one of the biggest
economic reforms that our country has witnessed. To make it more successful,
there needs to be a simplification in the filing process for companies. GST is
now accountant-friendly, it needs to become business-friendly as well. Also,
startups with less than 25 cr turnover should get automatic exemptions from
TDS. We spend money faster to grow faster. But because of TDS, our precious
funds get stuck, costing us dearly in terms of working capital and interest.
Yash
Rane, Founder, Chizel
Rane, Founder, Chizel
With
Indian economy on slowdown, we need policy with long term sustainable growth
and not just for a few years. We are looking at 9% GDP growth and that is not
easy. GST has hampered the cash flow of SMBs thereby affecting their buying
power. Government should enable monthly filings and quarterly GST payments.
Also, it is the time to accept that manufacturing is and has always been the
backbone of India.
Indian economy on slowdown, we need policy with long term sustainable growth
and not just for a few years. We are looking at 9% GDP growth and that is not
easy. GST has hampered the cash flow of SMBs thereby affecting their buying
power. Government should enable monthly filings and quarterly GST payments.
Also, it is the time to accept that manufacturing is and has always been the
backbone of India.
With
China-US relationship getting better, India needs stronger partnerships to
bolster exports.
China-US relationship getting better, India needs stronger partnerships to
bolster exports.
Akshay
Singhal, Founder, Log 9 materials
Singhal, Founder, Log 9 materials
I
think for startups there are already a lot of initiatives in action, improved
mechanisms for execution of those schemes is extremely important. However, I am
more concerned about the economy as a whole. To boost economy my suggestion
would be to increase spending under Swachh Bharat Scheme may be via MNREGA to
get Indian cities clean by employing the bottom of the pyramid.
think for startups there are already a lot of initiatives in action, improved
mechanisms for execution of those schemes is extremely important. However, I am
more concerned about the economy as a whole. To boost economy my suggestion
would be to increase spending under Swachh Bharat Scheme may be via MNREGA to
get Indian cities clean by employing the bottom of the pyramid.
Sidhant
Lamba, Founder, Fabrento
Lamba, Founder, Fabrento
“Income
tax holiday for start-up should apply for all start-up companies registered
beginning April 2015.” “Under GST, the extra GST inputs should be
credited back to the startups (like for us, when we buy furniture, we have to
pay gst in it, now when we rent, the gst in rent is adjusted against the
already paid gst during purchase. But even then, the gst on purchase is much
higher compared to what we adjust in rent, so we want that extra gst to be
credited back to us.”
tax holiday for start-up should apply for all start-up companies registered
beginning April 2015.” “Under GST, the extra GST inputs should be
credited back to the startups (like for us, when we buy furniture, we have to
pay gst in it, now when we rent, the gst in rent is adjusted against the
already paid gst during purchase. But even then, the gst on purchase is much
higher compared to what we adjust in rent, so we want that extra gst to be
credited back to us.”
Siddharth
Jain, Co- founder, Vaahika
Jain, Co- founder, Vaahika
Indian
economy needs an urgent dose of consumption booster; thus it would be wonderful
to have provisions in the budget which could assist in an instant rise in
consumer expenditures. Relaxation on personal income tax rates could be one
such move that can act as a booster shot. We expect the budget to bring in
provisions for lesser and reduced compliance for smaller companies; which as of
today have to follow almost similar compliance that of a larger corporation. We
expect this budget to come up with revolutionary steps to overhaul the complete
compliance and fillings guidelines for smaller companies and startups and do
away with the current penal provisions. The current economic slowdown could be
linked with the rapidly declining health of MSME in India; especially the ones
in the manufacturing sector. Though the government has already reduced the
applicable income tax for this segment; but it appears that it has not been
helpful in bringing the required turnaround. More needs to be done to address
the concerns of liquidity crunch, ever-increasing compliance and reducing
competence for the overseas markets. It has a worse impact on the Logistics
sector, especially on the small and medium-sized fleet owners. On one side it
is the demand which is declining and on the other side increased operating
expenditures have made it very difficult for them to even pay the EMI’s
regularly thereby increasing defaults. It is very much expected that the coming
budget would have provisions to support not only the survival; but the revival
of the logistics sector.
economy needs an urgent dose of consumption booster; thus it would be wonderful
to have provisions in the budget which could assist in an instant rise in
consumer expenditures. Relaxation on personal income tax rates could be one
such move that can act as a booster shot. We expect the budget to bring in
provisions for lesser and reduced compliance for smaller companies; which as of
today have to follow almost similar compliance that of a larger corporation. We
expect this budget to come up with revolutionary steps to overhaul the complete
compliance and fillings guidelines for smaller companies and startups and do
away with the current penal provisions. The current economic slowdown could be
linked with the rapidly declining health of MSME in India; especially the ones
in the manufacturing sector. Though the government has already reduced the
applicable income tax for this segment; but it appears that it has not been
helpful in bringing the required turnaround. More needs to be done to address
the concerns of liquidity crunch, ever-increasing compliance and reducing
competence for the overseas markets. It has a worse impact on the Logistics
sector, especially on the small and medium-sized fleet owners. On one side it
is the demand which is declining and on the other side increased operating
expenditures have made it very difficult for them to even pay the EMI’s
regularly thereby increasing defaults. It is very much expected that the coming
budget would have provisions to support not only the survival; but the revival
of the logistics sector.
Dhananjay
Sharma, Director & CEO, Log 9 Spill
Sharma, Director & CEO, Log 9 Spill
Cleantech
companies around the country seeks special incentive programmes and larger tax
benefits with aggressive government push for innovative cleantech solutions. So
that this sector becomes more desirable and stable resulting in more
investments in this sector. A conducive environment should be provided to
encourage the creation of new cleantech businesses by easing regulatory and
compliance policies for such companies.
companies around the country seeks special incentive programmes and larger tax
benefits with aggressive government push for innovative cleantech solutions. So
that this sector becomes more desirable and stable resulting in more
investments in this sector. A conducive environment should be provided to
encourage the creation of new cleantech businesses by easing regulatory and
compliance policies for such companies.
Pradeep
David, General Manager, South Asia, Universal Robots
David, General Manager, South Asia, Universal Robots
“The
current economic slump has to be tackled in smarter ways by introducing
landmark policies and stronger governance which will be beneficial in the
longer run. The upcoming Union Budget has to incorporate these factors to bring
back the required liquidity and put the economy on track. The automation sector
has lately become a significant contributor to India’s mission of digital
empowerment, and the current government is fast-pacing the development to
enable SMEs & MSMEs to further compete on a global level. Banking on
high-end technology and automation for the manufacturing sector will prove to
be a game-changer, also helping in stabilising and flourishing the Indian
economy.
current economic slump has to be tackled in smarter ways by introducing
landmark policies and stronger governance which will be beneficial in the
longer run. The upcoming Union Budget has to incorporate these factors to bring
back the required liquidity and put the economy on track. The automation sector
has lately become a significant contributor to India’s mission of digital
empowerment, and the current government is fast-pacing the development to
enable SMEs & MSMEs to further compete on a global level. Banking on
high-end technology and automation for the manufacturing sector will prove to
be a game-changer, also helping in stabilising and flourishing the Indian
economy.
According
to the data of the International Federation of Robotics (IFR), on average, 99
robots are deployed per every 10,000 employees. India lags with the number
being just 4 robots per 10,000 workers-reflecting the dire need to make
technology and robotics accessible to all. Thus, to fill that void, relaxation
in taxes for robotics could neutralise the slowdown and further increase the
rate of manufacturing in the country, inviting more FDIs and trades. The
measure would encourage small and medium-sized businesses to accelerate their
profits, quality, and productivity, as well as contribute to the economic
growth of the country.”
to the data of the International Federation of Robotics (IFR), on average, 99
robots are deployed per every 10,000 employees. India lags with the number
being just 4 robots per 10,000 workers-reflecting the dire need to make
technology and robotics accessible to all. Thus, to fill that void, relaxation
in taxes for robotics could neutralise the slowdown and further increase the
rate of manufacturing in the country, inviting more FDIs and trades. The
measure would encourage small and medium-sized businesses to accelerate their
profits, quality, and productivity, as well as contribute to the economic
growth of the country.”
Prasad
Shejale, Founder and CEO, Logicserve Digital
Shejale, Founder and CEO, Logicserve Digital
“Taking
a step closer to the Digital India initiative, the budget should include a key
emphasis on the implementation of the National Centre of Artificial
Intelligence as it will prepare organisations for better human-machine
partnership and analyse consumer patterns using Big Data. Furthermore, building
1 lakh digital villages will open up an untapped marketplace for digital
marketers to cater to consumer needs with bespoke services that were earlier
consumed only in urban and semi-urban areas.
a step closer to the Digital India initiative, the budget should include a key
emphasis on the implementation of the National Centre of Artificial
Intelligence as it will prepare organisations for better human-machine
partnership and analyse consumer patterns using Big Data. Furthermore, building
1 lakh digital villages will open up an untapped marketplace for digital
marketers to cater to consumer needs with bespoke services that were earlier
consumed only in urban and semi-urban areas.
Also,
the budget should include measures to ensure that India continues to lead in
the mobile data consumption space that has grown about 50 times over the past five
years. While developing regulations around the digital economy for the
protection and privacy of end-consumers, the Government must adopt a pragmatic approach
so that new opportunities open up for existing businesses operating within the
premises of fair practices.”
the budget should include measures to ensure that India continues to lead in
the mobile data consumption space that has grown about 50 times over the past five
years. While developing regulations around the digital economy for the
protection and privacy of end-consumers, the Government must adopt a pragmatic approach
so that new opportunities open up for existing businesses operating within the
premises of fair practices.”
Saurabh
Sood, Founder, Nature Homes
Sood, Founder, Nature Homes
“Since
the general trend of economic slowdown which was witnessed in the year 2019,
would be seen having its aftermath in the year 2020 as well. With respect to
housing and real estate even the eco-friendly and green housing did witness a
slump in the year 2019 but the commercial demand for these structures were
there with respect to office spaces and co- working spaces. In the year 2020,
we expect to see the commercial space demand helping our business grow with a
remarkable improvement and also the need for such houses is expected to witness
growth in cities like Hyderabad, Chennai, Bengaluru, Mumbai and Delhi NCR as
India is set to become a manufacturing hub for reputed global brands and their
top management will be a decisive factor bringing along with them their
particular lifestyle tastes as well.”
the general trend of economic slowdown which was witnessed in the year 2019,
would be seen having its aftermath in the year 2020 as well. With respect to
housing and real estate even the eco-friendly and green housing did witness a
slump in the year 2019 but the commercial demand for these structures were
there with respect to office spaces and co- working spaces. In the year 2020,
we expect to see the commercial space demand helping our business grow with a
remarkable improvement and also the need for such houses is expected to witness
growth in cities like Hyderabad, Chennai, Bengaluru, Mumbai and Delhi NCR as
India is set to become a manufacturing hub for reputed global brands and their
top management will be a decisive factor bringing along with them their
particular lifestyle tastes as well.”
Amit
Sharma, Founder and CEO, eExpedise Healthcare
Sharma, Founder and CEO, eExpedise Healthcare
With
the government’s vision of ‘healthcare for all’, we expect Budget 2020 to have
two-fold purposes: ‘home healthcare’ and ‘affordable elder care’. A large
section of India’s population is expected to enter old age and with that comes,
chronic or terminally ill patients who will need medical attention. However,
taxation policies as of now do no cover the home healthcare expenses and the
cost of tests. There need to be concrete policies that ensure accessible and
affordable healthcare; this could be done by exempting critical health
equipment from the GST. This year’s budget should be a relief in this aspect of
the healthcare industry as it will prompt more people to take up health-checkups
and help in achieving the expected CAGR of 27% by 2023. If the government
relieves the ‘taxes under Section 80D’ associated with the cost of preventive
check-ups, we would be able to focus on this segment of our population. As
opposed to the last budget, 2020 Budget should put emphasis on ways to increase
funding in the healthcare sector.
the government’s vision of ‘healthcare for all’, we expect Budget 2020 to have
two-fold purposes: ‘home healthcare’ and ‘affordable elder care’. A large
section of India’s population is expected to enter old age and with that comes,
chronic or terminally ill patients who will need medical attention. However,
taxation policies as of now do no cover the home healthcare expenses and the
cost of tests. There need to be concrete policies that ensure accessible and
affordable healthcare; this could be done by exempting critical health
equipment from the GST. This year’s budget should be a relief in this aspect of
the healthcare industry as it will prompt more people to take up health-checkups
and help in achieving the expected CAGR of 27% by 2023. If the government
relieves the ‘taxes under Section 80D’ associated with the cost of preventive
check-ups, we would be able to focus on this segment of our population. As
opposed to the last budget, 2020 Budget should put emphasis on ways to increase
funding in the healthcare sector.
Neeraj
Jain, CFO, Cosmo Films
Jain, CFO, Cosmo Films
“We
expect that the government would bring in more business-friendly policies and
take steps to reduce regulatory compliances, thereby creating a holistic
environment for ease of doing business. Removal of MAT from SEZ and
simplification of domestic sales from SEZ will give required boost to the
manufacturing industry.
expect that the government would bring in more business-friendly policies and
take steps to reduce regulatory compliances, thereby creating a holistic
environment for ease of doing business. Removal of MAT from SEZ and
simplification of domestic sales from SEZ will give required boost to the
manufacturing industry.
Last
but not the least, removal of capital gain from equity transaction will facilitate
overall market capitalization of stock market”
but not the least, removal of capital gain from equity transaction will facilitate
overall market capitalization of stock market”
(Views
expressed are of different industry leaders. Email us your feedback at
startupterminal@gmail.com)
expressed are of different industry leaders. Email us your feedback at
startupterminal@gmail.com)
