What Industry Is Expecting From FM Sitharaman’s Maiden Budget
Everyone is eagerly waiting for their share that their concerned demands would be fulfilled or not
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India's new Finance Minister Nirmala Sitharaman is all set for her maiden budget on Friday.
Everyone is eagerly waiting for their share that their concerned demands would be fulfilled or not. Like all the sectors, the startup segment has come up with more expectations from the upcoming budget 2019-20. Let's take a look at what industry is expecting from newly appointed FM:
Rajiv Sabharwal, MD and CEO, Tata Capital
Non-banking finance companies play an important role in nation building and drive economic growth. The recent measures introduced by the Reserve Bank of India pertaining to asset quality, asset liability management and solvency augurs well for the sector. To support financial stability and growth, the budget should focus on a robust and accessible system for fund flow especially to well- performing NBFCs with an established track record.
Banks should be allowed to extend Term funding against the on-lending and re-finance of agricultural and affordable housing originated by NBFCs and HFCs. Such exposures should be considered eligible under the Priority Sector Lending guidelines which should be over and above the LE norms with limit specifications.
NBFCs cater to the financial needs of the retail segment, while its liabilities are wholesale in nature. Retail investors use the Mutual Fund route which enjoy certain tax exemptions. To encourage more direct retail participation in the bond market, tax incentives can help and also increase the depth of the market.
The medium, small, and micro enterprises play a vital role in contributing to the development and growth of the country. Further simplification and easing of GST will provide the much needed boost to SMEs and MSMEs.
Anmol Kukreja, Co-Founder & CEO, Skillbox
After the resounding mandate given to the Modi Govt. in the 2019 Union Election, we expect the government to unleash a series of economic reforms to turn India into an economic powerhouse. Start-ups will play a vital in this transformation by fostering innovation and generating employment. Therefore, we expect the government to maintain the momentum of the Start-Up India program by streamlining taxes and making GST and TDS filing on a quarterly basis for startups, who are currently reeling under the pressure of working capital crunch due to the monthly filing.
It should also ease FDI and RBI rules and make the regulatory environment easier for start-ups who are raising funding overseas. Filings and compliances are quite cumbersome and we expect the government to make the process frictionless through an entirely online process. We believe going ‘cashless’ is the way to go to improve transparency in the country’s economy and reforms around that would be welcome. Last but not the least, the government should draft a new law to penalize parties who do not honor payments within 60 days of invoice raising. This will go a long way in improving trust between parties and make the country business friendly.'
Himmath Jain, Co Founder and Director, AS-IT-IS Nutrition
We operate in the field of nutritional supplements. Generally supplements are used for preventive health.
GST on supplements is charged at 18 % which I feel is too high because India is full of people with nutrition deficiency.Lower rates will help more people to buy nutrition supplements. I request the Finance Minister to reduce the GST slab from 18 % to less than 12%.
Vinay Singhal, Co-Founder & CEO - WittyFeed
The Startup Industry Eagerly Awaits The Government To Walk The Talk During The Union Budget 2019
India has become the second largest startup hub in the world. The Union Budget 2019 is bringing in a robust hope for the startup and technology industries in India. What will be interesting to see is whether the expectations will be met with similar vigor and thirst by the Government of India this time around.
The plight of dealing with Angel Tax has been intact for long. Angel Tax has emerged as one of the key issues faced by the Indian startup ecosystem. A lot more regarding the same needs to be addressed by the Government to boost angel investments in the country.
The technological disruption directly shapes the future of startups and with the upcoming Union Budget, we expect to witness a clear vision around how technology, especially AI, and startups will be dealt with in unison.
The startup ecosystem is expecting the government to provide for simpler regulations surrounding the tax levied upon Employee Stock Options (ESOPs). The same goes for StartUp India, Government of India’s flagship initiative wherein policies abounds but the realization on the ground differs the expectation. It will help if the intent on paper is transformative enough to change the landscape of startups in India for real.
Accelerating innovation-driven entrepreneurship and business creation through startup-ecosystem is crucial for large-scale employment generation, so says the Government. Hence, it’s high time for the Government to ensure that they walk the talk and bring about a significant difference on-ground with the upcoming Union Budget 2019.
Vinay Agrrawal, Founder & CEO - Hubbler
For a Make in India vs Register in India, We founders have a huge expectation from the upcoming budget to make India the preferred Hub, especially for the startup sector. Tax woes like Angel Tax continue to haunt Indian entrepreneurs and investors. Several Indian startups, although operating in India, have registered their companies in Singapore to benefit from the mature funding opportunities, ease of doing business, lower capital gain tax from selling of shares by investors; Continue the policy of reducing corporate taxes, and stable economic policies (Lowering the Compliances required to be met by Startups, reduced or zero rate of TDS, encouraging VCs by requiring less stringent paperwork). Indian startups are literally going places today & the overpowering regulations can dampen the spirits & the Pride of Make in India & Registered in India.
Deepak Maheshwari, Director of Government Affairs, India, ASEAN & China
As a young and aspirational New India marches forward in its transformation to a Five Trillion Dollar Economy, the role of the Trillion Dollar Digital Opportunity is paramount - as seen in broad and deep technology adoption at scale and speed; most visible in government services, education, healthcare, financial services, entertainment and information via smart mobile devices, extending beyond interpersonal communication. In addition, the role of technology will also be instrumental for inclusive growth and innovation.
With the ubiquitous hyper connectivity and horizontal integration of technology across all walks of life, it is not at all surprising that cyber security threats featured amongst the top four risks by the World Economic Forum in its recent report. India is neither immune nor an outlier to this global phenomenon.
To foster trust in technology and bolster overall security, it is imperative that India enhances its cyber security readiness and posture, especially in the critical infrastructures including governance, banking and financial services, energy, telecom and smart cities.
The budget should mandate setting aside 10% of the respective technology budgets for every government project exclusively for cyber security, as per the recommendations of the NASSCOM Task Force set up in response to the Prime Minister’s behest.
Besides enactment of data protection, we need a comprehensive National Cyber Security Strategy, both enriched via public consultations; and aligned with global best practices.
Nimish Gupta, MD South Asia, RICS
On the overall front, we believe that the budget will focus on ensuring further streamlining of regulations and reforms undertaken by the government. We believe that NFRA roadmap will be announced and educational reforms to build competency based approach will be taken up. We do expect that the government will have firm approach on financial and tax defaults.
Specifically for the Build Environment Sector, we do expect to see a better roadmap for implementation of PM's vision on Smart Cities and Housing for All which are yet to show promise on achievement of desired objectives.
With a view to give boost to Indian economy, the upcoming union budget is expected to enhance funding for the sector, in addition to ensuring financial hygiene. While the investments in infrastructure development will get the larger share, It should further help in increasing access to funds by the developers for the development of affordable housing project in addition to initiatiation of Rental Housing. Highest levels of compliances and adoption of business best practices will therefore need to overlap with advancement in technology and delivery mechanism for the affordable housing scheme. A clear road map for regulations is needed and further corrective measures should be taken to rationalize the GST.
At a macro level, RICS is expecting the Ministry of Finance to provide necessary incentives and stability, along with adequate tax concessions to promote economic growth and investments in the country.
Vinay Bagri, Co-founder & CEO, NiYO
Both the ministry of finance and the RBI have been very supportive in creating an enabling environment for the fintech sector in the last few years. In the first full budget of the new government, we expect a slew of measures from the government to ease the operating environment for fintech startups, particularly in the wake of the NBFC liquidity crisis and the setback to digital on-boarding through eKYC. We expect the government to push forward new reforms under the umbrella of “Digital India 2.0”, as well as strengthen the measures to achieve financial inclusion. We are hoping for tax relaxations for fintech companies and payments players which can pave the way for the fintech industry to increase investments in product innovation and customer service.
Harry Sehrawat, Founder, Sanfe
India's Feminine Hygiene Industry is one of the shining industry and has immense potential to take the country on the global business map and improvise women empowerment initiatives by ensuring health, hygiene, and wellbeing. The need of the hour is to create a conducive atmosphere by introducing favorable policies to support women empowerment companies in the category. To improve the state of women health and hygiene at mass level there is an urgent need for GST relaxation and motivating subsidies. We expect the upcoming budget to support the creation of a robust startup ecosystem for affordable, disruptive and sustainable hygiene products. The cost of research and development is already very high in the category obstructing innovation for last mile women of India. This demands for a policy draft, where startups can be allowed to collaborate with Hospitals and Labs to undergo the clinical trials and testing, helping them to grow and introduce a wide range of affordable and innovative solutions. Like large companies, startups also have to compute taxes under the minimum alternate tax (MAT) the regime even though they may not have real profits. This need to be altered so that the startup does not lose capital at the initial stage said.
John Baby, CEO, Funskool India
India has become one of most sought attractive investment destinations and businesses have been provided favourable ecosystem to scale their operations. We hope that the government provides more incentives to the manufacturing sector under the Make in India initiative, support domestic industry and discourage unhealthy imports by increasing duties. Credit availability through financial institutions, revising income tax slabs that will spur the savings, thereby enhancing the purchasing power of a consumer and undertake initiatives towards skilling the youth are some of the changes we will expect to see from the government in this budget. Rapid advent of technology and the role it plays in manufacturing sector, it needs policies and focus on infrastructure from the government to take the industry to the next level.
Vikas Bagaria, Founder, Pee Safe
With the new Government’s encouraging move to ensure Women empowerment and Healthy India, we have high hopes from the upcoming budget. The poor state of feminine hygiene and health are key hurdles in the progress of one of the fastest emerging superpower of the world. The rise of global feminine hygiene industry has opened a plethora of business and social empowerment opportunities in the country. As a start-up, we are working in this direction to improvise women health and hygiene prospects in India with disruptive technologies, world-class sustainable products, and solutions. We expect the Union Budget 2019 to support the creation of an exemplary feminine hygiene product ecosystem in India by nurturing category start-ups with supportive policy infrastructure, GST relaxation and subsidized research and development facilities. Expensive raw material sources, higher manufacturing costs, and heavy R&D expenditure are critical factors stopping brands to make eco-friendly and sustainable health/hygiene/menstrual products and solutions for the masses. A mass reach of such products is the need of the hour to accomplish few prime agendas of Modi Government.
Dr. Yajulu Medury, Director, Mahindra Ecole Centrale, Hyderabad
With one of the youngest populations, India can reap the benefits of demographics only if our youngsters are well educated and become responsible citizens contributing to India’s growth story as we move forward. Providing quality education means Government increasing its budgetary allocation on education from the present levels to a high 5-6% of GDP - like in the developed countries. The draft National Education Policy, which stresses this, should be accepted and the necessary budgetary allocations made to ensure that education becomes a tool for economic development in our country.
Shubham Maheshwari, Founder, BeingChef
We expect Modi Government to ease the process of fundraising for DIPP recognised startups. Early-stage Startups face a lot of challenges in day to day operations and functioning. Having a single window clearance for funding would help us a lot. Also, there should be time-bound decision making in the case of fundraising.
Arijit Biswas, Co-founder, EnrichAI
In the technology space, we are hoping that the government makes investments on Training & Seminars on AI & IOT for senior management of all leading industries in HealthCare, Energy, Automobiles and Agricultural sectors along with framing Unified National Policy to boost Blockchain innovation. We also expect financial incentives such as preferential tax rates and the tax holiday to be provided to companies relocating from China. This would help the businesses to conduct themselves in a composed manner even after relocating. We also expect the government to urge public sector undertakings to commit funds for indigenous startups to foster, nurture and incubate new ideas related to their respective sectors.