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Pre-Budget Expectations 2021-22
India is the biggest market after China considering it's size plus we are democratic with our data policies hence we should become one of the first few nations to levy tax on data collected for non-Indian startups/companies.
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The 2020-21 budget was focused on aspirational India. This year it will be providing the nourishment for the aspirational India. India is the 5th largest economy in the world in terms of GDP (as per previous budget) to give the push post Covid setback we need to strengthen these sectors - IT, Edutech for skilled youth, Infrastructure for setting up manufacturing units and Agriculture to become a self-sufficient nation.
50% of India is self-employed (Distribution of workers by status in Employment from 2017-18) ranking casual labour and salaried labour in the order. Which means slash in tax rates for lower-mid income groups should be provided as that will benefit the masses and help cope up with the year.
The startup tax benefit program should be extended so that the profits could be reinvested into sustaining and expansion of the business. FDI is a two sided sword and can have multiple effects in the long term. However, in the current scenario FDI should find more ease to invest in the early to scaling stages of startup as this will take load off the government to be the only provider for the startup push. Programs like Stand up India which enable bank loans between 10 lakh and 1 Crore to Scheduled Caste (SC) or Scheduled Tribe (ST) and women should receive more allocation as they show a higher rate of return. Between 2016-19 55% of the recognised startups are from Tier 1 cities, 27% from Tier 2 cities, and 18% are from Tier 3 cities we should see the major chunk of entrepreneurs from tier 2 and 3 to have the goal of aspirational India served.
This year expecting to see the benefits of GST implementation and hopefully some reduction in the slabs.
With the increased tension between India- China, we need to invest heavily on IT infrastructure and manufacturing. As this could solve two major problems of unemployment and can bring in fast paced growth. This means we need a push with technology, and India will learn and grow fast if we become a hub for manufactures in electronics, automobile and textile. This will cause a ripple effect of skilled/trained labour, research opportunities, more entrepreneurs with new skillset.
Degree level online education programmes for students of deprived sections of the society should now be taken to more scalability by the EduTech sector and should find more room for higher education hence a decrease in tax for these institutes to pass on the benefit to the end consumer (youth).
Last year solar was the highlight this year EV seems promising and should find its place in the budget. Defence is changing into new technologies like drones, bioweapons, robots, etc. Hence, higher investments on R&D in this sector will lead to decrease in the burden on import expenses and will further serve the aim of self-sufficient India.
Last year agriculture was 8th on the budget quotient of spends this year the sector should be in top 5 spends as India needs a push from the roots to revive the economy. Healthcare cannot go unnoticed as the senior citizens and non-taxable income groups should find free access to the vaccine.
India is the biggest market after China considering it's size plus we are democratic with our data policies hence we should become one of the first few nations to levy tax on data collected for non-Indian startups/companies. Taxable data and Indian cryptocurrency should be introduced. This budget may not find a voice for these two sectors but sooner or later this should be the alignment for growth
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.