Union Budget 2021-22: What Industry Expects From This Budget

Finance Minister Nirmala Sitharaman is all set to present the budget on 1 February.  This budget will be more challenging than the previous ones, as coronavirus dented the entire economies in the world.  

All eyes are on FM Sitharaman to announce some remedies, grants and relaxation for their particular sectors. She has promised for  a never before like Union Budget as the Modi government looks to give a further boost to Indian economy.

Here is the expectation lift from the industry people:

Shanti Ekambaram, Group President – Consumer Banking, Kotak Mahindra Bank
As India slowly emerges out of the shadows of the pandemic – falling COVID-19 numbers, the beginning of the vaccination drive, an economy on the mend and historic market levels – 2021 has begun on an optimistic note. All eyes are now on Union Budget 2021 with high expectations and hopes from virtually all sections of society.

Growth will be the central theme around which budget initiatives will revolve. COVID-19 has severely disrupted India’s growth trajectory and getting growth back on track in FY21-22 will be the Finance Minister’s foremost priority. Infrastructure investment is key for growth and we are likely to see higher allocations as well as the formation of a Development Finance Institution for infrastructure financing. Given India’s experience during the pandemic, expect a greater thrust towards investments in healthcare infrastructure and insurance incentives are expected as well. Housing and real estate are likely to receive a boost as it aids core economic growth. With the Government needing to raise resources, an aggressive divestment programme is also expected to be announced.

The other major focus area of Budget 2021 will be on jobs creation that will provide immeasurable economic relief to India’s middle and lower middle class who have been deeply impacted by the pandemic. Specific reforms to help sectors under stress will also be on the agenda.

Finance Minister Nirmala Sitharaman will share her roadmap to a revised fiscal consolidation path. Fiscal deficit target for FY21-22 is likely to be around 5 to 5.5% of GDP. Expect allocation for recapitalisation and privatisation of PSU banks.

The budget will try to balance the twin objectives of stimulating growth and managing fiscal deficit.  Demand stimulus measures are also important but given the fiscal situation, there could be limited headroom available. All in all, Budget 2021 is likely to set an aggressive “Atmanirbhar“ growth agenda.

Amit Kumar Bajaj, Partner, Grant Thornton Bharat LLP
The key expectations in the upcoming budget from the pharma and healthcare sector would be to provide higher allocations for affordable COVID-19 vaccine to mass population, tax holiday incentives to promote rural healthcare with Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) and Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PMJAY) and measures to promote pharma exports.

Shankar Prasad, Founder, Pureplay - Plum, Phy and BodyLovin'  
This budget is a tightrope walk between managing deficit considerations and rekindling broad-based growth. We should not get too complacent with the festive quarter numbers, and the talk of a Covid cess is also a bit worrying. We need to believe that the economy with its undisputable consumption and asset creation potential has enough potential to make things work for all concerned: government, businesses and the general public, and just let things ease themselves out, instead of trying to over-manage through additional taxes or rules. The promise of "minimum government" is something we truly have the opportunity to deliver on, starting now, and I hope we can see that actualize. Systemically, we need to ensure our banking system is in good health, and any steps to assuage that will be welcomed.  

Anuja Bhargava, Head of General Counsel Operations, Fidelity International

All eyes are on the upcoming budget for the next financial year as India looks to recover from the economic devastation caused by the coronavirus pandemic in 2020-21. It is widely expected that the government will prioritise spending in the next fiscal and ensure a smooth transition into growth territory in 2021-22.

Having said that, India is looking at 2021 to be a huge opportunity to attract the interest from foreign investors. Foreign investors seek a stable tax regime with competitive tax rates. FM may consider switching to the erstwhile system of taxation whereby long term capital gains on sale of listed shares, subjected to the STT, were exempted from tax could be a big boost to attract the investors. In order to encourage long term, patient capital flow into India, the period of holding to qualify as long term could be increased, from one year to say, two years. This change would be welcome by the FPI and could help in the disinvestment agenda of the government. Coupled with this, relook at the TDS provisions for FPIs on dividend needs clarification to permit application of tax treaty rate in line with other foreign investors.   

Taxpayers do understand that the budget proposals will be constrained given the impact on government sources of revenue but the middle class and MSMEs / SMES who have been most severely impacted by the current crises , do hope for some tax reliefs and concessions from the upcoming budget.

Sanjay Tiwari, Co-Founder, 21CC Education  
"We don't just need to get people back to work, we need to get people ready for the new work. Industry 4.0 or whatever you choose to call the future is getting thrust upon us as a result of all the upheaval of the past year. I would hope that the Finance Minister would incentivise online learning programs for corporate employees so that employers can pay for their employees to be up-skilled and prepared for the demands of new jobs, some of which don't even yet exist."

Ravi Vishvanathan, CFO, PayMate
2021 budget should be a macro-economic big-ticket budget with less emphasis on incrementalism and more attention to economy boosters and growth drivers. The fiscal deficit should be looked at from a 3-5 year perspective and FM should be comfortable working with a higher Fiscal deficit. The momentum in Q3FY2021 needs to be built on and stimulus should be given to the economy. Inflation can be targeted through supply-side measures and the poor can be supported via direct transfer benefits. The global upheaval due to the pandemic is both a challenge and an opportunity and the FM has a glorious opportunity on hand to shift gears permanently.

Massive incentives should be given to the small business sector as they are the backbone for employment generation. Consumption is the key to sustained growth and a strong growth backed by robust employment will ensure that we set the base for a sustainable period of double-digit growth.

CA Anuj Jalota - the Founder of AJ Education NeXt, leading Chartered Accounting institution
The world is moving towards digital education. During the lockdown on account of an ongoing pandemic, our country made a great leap towards online education, majorly the metro, tier 1 & 2 cities started moving towards digital platforms. However, in many areas where digital infrastructure remains poor, students have remained bereft of this platform or are not able to make full use of this new age facility. Further due to lack of investment initiatives from the private sector, most of the education institutes are using free resources available on the internet. This leads to piracy and lack of interest by the students as well as developers of content. In the upcoming budget for the next year, the government needs to make special efforts to push education on digital platforms in a systematic way and create confidence amongst all stakeholders. The government can permit 100% depreciation on investments made by the Private sector in setting up such platforms and make some sort of registration.

Apart from this, our education system is also driven by the Public (government) sector, which comprises schools, colleges and universities. The government should set up virtual universities in affiliation with current universities where students who are working can join the vocational courses and see the lectures at their own pace and convenience. With this, the government should invite the private sector to set up examination centers where students can give exams and can be securely tested. Special tax incentives can be given to the private sector to set up these centres. Lastly, GST rates can be lowered for digital education provided by coaching institutions which are playing an important role for imparting knowledge and preparing future ready generation.

Secondly, GST Categories in food products have not much clarity and don't cover all types of products. Government must make the GST Categories vast and clear. Categories 1905 & 2106 have a lot of confusion and hence Industry is penalized by paying higher slab of GST Tax which can be reduced.

To position India as the food factory to the world and promote value added processed food products abroad, the 2021 budget should provide higher allocation of funds for food processing units and tax incentives for exports of food items. To facilitate investment in the food processing industry, any additional capital investment of more than 50 per cent of existing book value of plant and machinery should be treated as new investment and should also be eligible for a five-year tax holiday, under section 80IB(11A).

We hope that the government will take measures to control inflation and take appropriate measures to reduce the surge in cost of raw materials."

Hersh Shah, CEO, India Affiliate of Institute of Risk Management, UK (IRM India)
While online education has transformed India’s education sector, many colleges and universities have experienced the toughest year in terms of enrolments/admissions. This budget is extremely crucial as the sector prepares for recovery. With the Government’s ambitious NEP launched in 2020, it’ll be good to see the categories of fund allocation including investment in technology, clarity on private financing structures for schools /colleges/universities given the liquidity and business continuity risk that many institutions face in Tier 2 and 3 cities. Furthermore, with job automation and many skills becoming redundant in this post-crisis world, higher investment in new-age skills through Skill Development will be necessary to manage unemployment." -To be attributed to Hersh Shah, CEO, India Affiliate of Institute of Risk Management, UK (IRM India)

Sudhir Kothari, Founder and CEO, Embee Software 
"Covid-19 pandemic has left a huge mark on every sector and one thing that everyone wants from the UnionBudget2021-22 is to bring the economy back on track.  While every the sector has faced its own ups and downs in the past year, there is one sector that has seen tremendous growth and potential i.e. technology and automation.

The technology and automation sector has become a significant contributor to India’s mission of digital empowerment. We should take measures to expedite its development to enable start-ups, small businesses as well as enterprises to compete at a global level. Investing in the latest technology for the manufacturing sector can prove to be an ultimate game-changer and support the growth of the Indian economy.  

The current decrease in the economic growth rate can be dealt by implementing landmark policies and stronger governance to bring back the required liquidity and put the economy on track. Relaxation in taxes for technical advancements can create a thriving for deep tech businesses in the country, inviting more foreign direct investments (FDI) and trades.

It will also boost the profits, quality, and productivity of businesses of all sizes and result in an enhanced contribution to the economic growth of the country. Thebudgetshould also introduce crucial measures to support the digital industry and augment sales.

The government should also focus on creating an investor-friendly climate as may sectors such as infrastructure, aviation, automobile, travel, and hospitality heavily depend on this, apart from consumer demands.

The Unionbudget2021-22 should also launch schemes to facilitate ease of businesses and come up with a strategy where the taxpayers can file a single return at regular intervals, rather than filing different returns for different departments at different periods.

Business often spend a lot of time in obtaining state-wise registration, filing of multiple returns, generation of e-bills and maintenance of separate account books for each registered entity. Introducing more transparent norms in the entire process can prepare the Indian economy for its next phase of growth.

Its high time government to focus on the start-ups. Last yearbudgetdidn’t have many inclusions for the technology start-up sector, would be curious to see what’s in store for Small-Medium Businesses and Startups. As India is becoming a hub for homegrown start-ups, technology, innovation, and automation, it would be really amazing if this year’sbudgetwill allocate more funds and announce policies that would be encouraging for this sector. This will help create a more welcoming environment for the digital industry and catalyse innovation."

Ramananda SG, Vice President, Sales & Marketing, Pearson India 
“The education sector in India is at the cusp of a deeper transformational shift to realize and utilize young India’s capabilities. The foundation and vision set by the government, through NEP 2020 will be vital in achieving the objectives of an effective and inclusive education system. The Union budget 2021 should give guidelines on the ‘NEP implementation plan’ and further strengthen the focus and investment in Edu-tech to enhance experiential and immersive learning and reinforce the skill development process at par with the global education standards. The year 2021 will be significant as Indian schools steps up their preparations to participate in the PISA test in 2022. India will be part of the assessment for the second time after 2009, where it ranked 72 out of 73 countries. The improvement in ranking will help boost India's confidence amongst OECD members and help us showcase our goal to achieve an effective and inclusive education system.  

The need of the hour is to build a transparent and progressive ecosystem, that makes learning technologically advance, create room for training and development for educators, and conceives an increased focus on assessments. Hence, the allocation of budgets to promote holistic and scalable teacher training with a clear focus on digital learning to redefine teaching pedagogy, concentrated focus on vocational training in schools, and filling the learning vacuum created by COVID-19 in 2020 through blended learning will be monumental in driving the vision of making India a global knowledge superpower. We at Pearson are also equally aligned with the progressive vision charted out by the government with a host of digitally enabled assessment tools that can empower educators at large”.

Shankar Prasad, Founder, Pureplay - Plum, Phy and BodyLovin'  
This budget is a tightrope walk between managing deficit considerations and rekindling broad-based growth. We should not get too complacent with the festive quarter numbers, and the talk of a Covid cess is also a bit worrying. We need to believe that the economy with its undisputable consumption and asset creation potential has enough potential to make things work for all concerned: government, businesses and the general public, and just let things ease themselves out, instead of trying to over-manage through additional taxes or rules. The promise of "minimum government" is something we truly have the opportunity to deliver on, starting now, and I hope we can see that actualize. Systemically, we need to ensure our banking system is in good health, and any steps to assuage that will be welcomed.  

 Mr. Sanjay Tiwari, Co-Founder, 21CC Education  
"We don't just need to get people back to work, we need to get people ready for the new work. Industry 4.0 or whatever you choose to call the future is getting thrust upon us as a result of all the upheaval of the past year. I would hope that the Finance Minister would incentivise online learning programs for corporate employees so that employers can pay for their employees to be up-skilled and prepared for the demands of new jobs, some of which don't even yet exist."

Pallav Bihani, Founder & CEO, Boldfit
"2020 was a year when the country’s fitness sector was hit hard due to lockdowns and the Covid-19 fear which mostly kept people away from offline gyms, fitness clubs, etc.  Hence, at the outset of the new financial year, i.e. FY 2021-'22, the fitness industry is seeking tax reliefs, incentives and policy-level support from the Government,  in order to enable momentum for recovery. Now more than ever, fitness needs to be made affordable and accessible to all sections of society. The Government should work towards promoting fitness-oriented, healthy lifestyles on a larger scale, and allocating more funds on preventive healthcare in the upcoming Union Budget can be a good idea.

The current GST rate of 18% levied on fitness-related products and services in India is too high, and it has made fitness goods quite expensive for customers. Bringing down the GST for fitness products/services to the 5% bracket would benefit the industry and the country at large. Further, the Government should also consider reducing GST for health-enhancing and immunity-building supplements (including vitamins, tablets and capsules), as well as lowering GST for privately-run gyms and fitness centres. At the same time, we would like to urge the Government to increase the import duties for health and fitness supplements that are manufactured in foreign countries; having higher import duties for such products would promote the consumption of India-made products, and thus contribute towards furthering the 'Make-in-India' campaign and 'Aatmanirbhar Abhiyan'.

HEALTHCARE

Over the last few months, millions of people have relied on video or telephone calls to talk to their medical professionals and doctors for discussing their medical issues. We believe that telemedicine will continue to exist and expect that in the post-pandemic era, around 40-50 percent of their OPD will continue to be conducted through teleconsultation together with other innovations in the industry including AI, ML, Tele-mobile operator services, etc. Telemedicine has not only helped people during COVID but for the people especially the elderly who are more prone to any kind of infection tele consultation has emerged as a boon, and follow up consultations through tele- consultations will be a great step towards geriatric care as well.  Tattvan itself did a huge telemedicine camp during lockdown for geriatric care in a senior living project at 5 different locations of Rajasthan, Haryana, Maharashtra and Karnataka and it was a huge success, so we have realised that the telemedicine sector will definitely be here to stay. The Union Budget 2021 will be tabled in just over a month’s time and the health sector is expecting more specific allotments in this year’s budget to mitigate Covid and growth of the telemedicine sector. The government should also support startups and private players in this segment to increase the current coverage of the locations including tier-2 and tier-3 cities to provide the advanced healthcare facilities in these areas.

Ravi Vishvanathan, CFO, PayMate
2021 budget should be a macro-economic big-ticket budget with less emphasis on incrementalism and more attention to economy boosters and growth drivers. The fiscal deficit should be looked at from a 3-5 year perspective and FM should be comfortable working with a higher Fiscal deficit. The momentum in Q3FY2021 needs to be built on and stimulus should be given to the economy. Inflation can be targeted through supply-side measures and the poor can be supported via direct transfer benefits. The global upheaval due to the pandemic is both a challenge and an opportunity and the FM has a glorious opportunity on hand to shift gears permanently.

"While quality education holds the key to inclusive growth in India, the public spending on education is at about 4.6 percent of gross domestic product (GDP) - lower than that of most developing nations. Education in India needs to be recognized as an equalizer – as a crucial instrument that can bridge the socio-economic divide in our country. Income inequality in India stems from the enormous disparity in learning outcomes after completion of education. And, to address this gap, reallocation of resources from other sectors need to be made and re-routed towards building a level-playing field for all students. Budget 2021 needs to focus on investments towards building a robust system of accountability, checks, and balances to level-up the delivery and quality of higher education. Ensuring equal opportunities for students irrespective of caste, class, gender, and region. And eventually, eliminating the need for quota-based reservations for students in the country."   

Rajesh Gupta, Co-Founder and Director, Busy Accounting Software

MSME
In the upcoming budget, the government should factor in a GST rate cut for the MSME sector and also extend some incentives for filing GST returns timely. Even the process of providing GST refunds should be improved as this has a direct bearing on the working capital available with MSMEs. The ongoing pandemic has made digitization imperative at each stage of the business cycle at large. Similarly, MSMEs were pushed to adopt digital technology for their operations owing to the repercussions of Covid-19. For instance, accounting software changed the method of traditional accounting, enabling accountants to move to digital accounting methods. Technology is definitely the enabler that can place Indian SMEs ahead of the curve. The government can introduce strict compliance rules regarding the digitization of accounts, processes, deliveries and trade, to encourage further transparency.   BUSY has also witnessed significant growth in the demand of accounting software in tier-2 and tier-2 cities, so at the grassroots level, a large section of the population needs to understand digitalization and require basic upskilling to meet the demands for skilled professionals in upcoming fields like big data and machine learning. Introducing digital lending can enable small-sized businesses to be financially sufficient as they will get easy access to loans. The Union budget is likely to be a turning point for the SMEs, if the government fulfils these expectations.

Ravish Kapoor, Managing Director, Elan Group
"Commercial real estate has emerged as a resilient segment in the past few years. The upcoming Budget has instilled optimism to reinvigorate it further. A futuristic budget proposing the rationalization of GST with input credit provision will be a great start to boost commercial real estate. Similarly, the push towards infrastructural development and speedy completion of projects will propel real estate. The granting of the 'industry' status to real estate will ensure access to easy credit, ease liquidity, and stimulate the cash inflows into the sector." 

Healthcare Startup perspective: 

Himani Khanna (Co-Founder & Director) & Puja Kapoor (Co-Founder & Director) of Continua Kids :   

With every year's budget approaching, each one of us has huge expectations from the government not only at personal level but at professional level as well. The past year has taught us so much again to trim the expenses to basic, bootstrap the organisation to keep oneself afloat. Once the vaccine is introduced, we expect the government will try to ensure that the economy is back on track.

Despite making all the noises around innovation, a huge number of start ups have failed in the past 1 year due to funds crunch, investment deprivation and many other reasons.

We as a start up in healthcare would like to request the government to include in the MSME category to get the advantages which has been offered and to make funding available. We are quite optimistic and can foresee the economy recovering quickly, simultaneously, we would want that technology and healthcare startups should also join the bandwagon for the party.

2- Startup perspective: 

Prashant Kumar, CEO and Co-Founder, zingbus: 
Last year was difficult for the travel sector. And it's only now that we are starting to see some green shoots. However rising diesel prices has not allowed intercity bus operators to recover the EMI of buses fully let alone make profits. Any rebate in diesel prices or road taxes/tolls will allow fleet operators to invest more in safety measures (should be govt enforced) which would give confidence to travelers, leading to a snowball effect in demand. At the same time, authorities should enable standardization in the regulations and taxation rules across the sector, which will promote digital first players in the space, increasing GST collection for the government.  

Neeraj Dubey, Partner, Corporate Law, Singh & Associates:  
Budget 2021 session is right around the corner, and it is all set to be an eventful budget speech by the Finance Minister keeping in mind the extenuating factors brought in by the impact of covid-19. While it would be an interesting budget for all the concerned stakeholders, this document specifically focuses on the expectations by certain identified sectors from Budget 2021. These sectors have seen covid-19 induced dwindling investments, limited workforce, pay cuts, etc. The Budget must take into account the above and bring in measures which provide necessary relief to them.

1. Suspension of Basel Norms for 3 years: The start-ups have seen a decrease in lending by banks due to the covid-19 situation. Banks need flexibility in lending, which can only be brought about by the temporary suspension of Basel Norms. MSME loans in India are linked to corporate loans for which credit rating is required. Rating agencies assign the rating based on the market base of a business, which means that a small enterprise would have an insignificant market base. This would lead to a higher interest rate and would affect bank’s lending flexibility. In this background, the start-ups hit by covid-19 must be able to obtain sufficient borrowings in order to function. Though RBI had permitted reduction in margin to recalculate Drawing Power for working capital facility and simultaneously banks have permitted ad-hoc fund-based facility up to 10% of fund based limits under the Emergency Credit Line Guaranteed Scheme, these measures would end by March 31, 2021 and would require an extension.

2. Reduction of compliance burden: Start-ups have been burdened with onerous compliances under various laws which have affected their operations. Relaxation of stipulations concerning the appointment of independent directors and women directors, and appointment of key managerial personnel under the Companies Act is a step forward in this direction. Compliances under Foreign Exchange Management Act, 1999 must also be streamlined. At present, all inflows and outflows of funds into and outside India are scrutinised rigorously by RBI and need to conform to certain reporting standards. Adherence to such strict requirements affects the flexibility of start-ups to work seamlessly with global players. Therefore, there is a need to simplify the compliances so that the start-ups can compete globally. What is also required is the relaxation of the filing fees for start-ups for most of the forms including levying of any additional fees.

3. Measures to increase FDI: The start-up has seen a reduction in the inflow of foreign investments this past year. Necessary measures need to be taken to attract more investments in key areas. Uniform policies across the nation must be brought in so as to ensure a level playing field for all the players.The flow of capital to manufacturers must be streamlined. Easy availability of capital also needs to be ensured.

4. GST Reforms: Reduction in GST rate would encourage the start-up sector to leverage professional services for business growth and get back on track with their operations. At present, the GST rate on most professional services is 18 percent, which does not give much manoeuvring room to the start-ups. The government has also notified that if the monthly taxable sales of a company are more than 50 lakhs, they shall be obligated to pay 1 per cent of their GST liability in cash. Further, this cannot be set-off against input tax credit. Enterprises are also required to get their offices physically verified by a GST officer.All these requirements increase the compliance costs for start-ups.

5. Tax Reforms: One major tax reform which needs to be undertaken is to abolish the payment of capital gain taxes or dividend taxes. Since enterprises already pay income tax on their income, capital gain tax and dividend tax essentially end up being double taxation on the same profit. Numerous global business centres have done away with these taxes in a bid to attract more foreign investment. Deferred TDS requirement for Employee Stock Option Plans/ESOP also needs to be reformedand be made more start-up sector friendly. 

MSME perspective: 

Neeraj Dubey, Partner, Corporate Law, Singh & Associates:   

1.  Compliance Overburden: a typical MSME with 1 factory and 1 admin office has to comply/file on an average 750 compliances, which includes returns, displays, etc. About 52% of this is related to labour, which has a cost and innovation implication. About 14% of the compliance burden has criminal penalties associated with it. For this, 3 things are needed:
-  Digitize– take5-7 key processes like EPF, Tax, Labor compliances and digitize them from start to finish.
-  Decriminalize – remove criminal penalties for minor non-compliance and offenses.
-  Simplify – reduce duplication in forms and minimize interaction with bureaucracy.

2. Stimulating access to finance for NBFCs and FinTech firms: Given the poor lending practices from NBFCs such as IL&FS; banks, flush with liquidityare wary of NBFCs and consequently MSMEs, as a lending segment. Since NBFCs and FinTech firms bring many more ‘new to credit’ MSMEs to formal finance than public and private banks, this risk aversion affects job creation. Furthermore, even those NBFCs with optimized models (e.g., combining physical and digital models that keep costs low while being MSME-centric) charge upwards of 20% in interest, which is expensive for many MSMEs. Together these factors limit the scale-up of innovative and effective NBFCs and FinTech players.

For ‘supplier firms’, this credit crunch is further exacerbated by delayed payments: according to Brickworks, delayed payment only from India’s 1000 largest firms amounts to INR 3.3 lakh crores. The micro-enterprise realizes income from large suppliers ~200 days after invoice submission, which reduces production cycles in a year, increases the cost of goods, reduces the resilience of supply chains, and leads to delayed tax collections.

Constituting a committee for framing guidelines for partnership/ proprietorship by Ministry of Corporate Affairs or IBBA, like the payments due to MSMEs from corporate debtors ahead of, and throughout the Corporate Insolvency Resolution Process inside the ambit of ‘insolvency resolution process costs’, treating offline and on the net sellers at par in GST to allow smaller sized MSMEs to leverage e-commerce, class-1 government officers earmarking particular hour of the day to hear MSME grievances, and more have been amongst other essential recommendations.

Beyond lines of credit from banks, enabling NBFCs and FinTech firms to access capital markets to raise debt, securitise and sell their portfolios to banks, and even insure their portfolios will drive greater penetration of formal credit.  To stimulate credit from banks, expanding PSL norms to nano and mass enterprises, and backing this up with credit guarantees will help. Existing mechanisms such as CGTMSE are powerful but need process tweaks to encourage more NBFCs to participate.

3. Targeted schemes designed with a job creator focus: Large scale schemes such as MUDRA have an average ticket size of < INR 50,000 and create one job for every 11 loans granted. Almost half of all job creation through the scheme drove 'self-employment.' Bringing greater focus to nano and mass enterprises and expanding deployment channels to include NBFCs, and FinTech firms that work with these segments will create jobs efficiently.

4. Mainstreaming financing platforms such as TReDS and OCEN: TReDS has seen limited uptake from MSMEs and large buyers. Less than 15% of all Central Public Sector Enterprises transacted at least once in the last three months on TReDS. Fewer than 15,000 MSMEs have benefitted from the 3 TReDS platforms. While it is mandatory to register on TReDS for firms with a turnover >500 crores, reducing this to a minimum threshold of INR 200 crores will increase the number of buyers and, consequently, the number of MSMEs on TReDS. If mainstreamed, OCEN, a platform to mainstream cash flow-based lending, would greatly benefit thin file and no collateral MSMEs. For such platforms, incentives and innovations rather than mandates to encourage participation from key stakeholders will help. For example, supporting trade credit insurance via TReDS will enable banks to lend to MSME suppliers of low or un-rated corporates.

5. Felicitating prompt payments: Large corporates make a ‘prompt payment pledge’, an ethical commitment to pay their MSE suppliers in accordance with the The Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act). Section 15 of the MSMED Act talks about the liability of the buyer, provides that the period agreed between the parties shall not exceed 45 days from the day of acceptance or deemed acceptance of goods or services. This will create a movement around ‘prompt payments’ and encourage corporate boards to both track payment efficiency and link it to CFO KPIs.

Short-term suspension of Basel norms:MSME body Federation of Indian Micro and Small & Medium Enterprises, which represents 740 MSME associations involving 20 lakh members, in India, has sought a short-term suspension of Basel norms on the banking sector to ease lending. The suspension has been sought to permit the needed flexibility amongst banks essential to assistance Covid-hit MSMEs. Basel norms are worldwide norms by the Switzerland-primarily based Basel Committee meant to set a typical normal for banks across nations. It has 45 members comprising of central banks and bank supervisors from 28 nations. FISME recommended exempting banks from Basel norms for 3 years like suspending Bank Loan Ratings to assisting lending in complicated occasions.   

Smita Singh, Partner Indirect Tax, Customs & Trade, Singh & Associates
Currently there are 7 rate slabs for goods (0%, 0.25%, 3%, 5%, 12%, 18%, 28%) and 5 rate slabs for services (0%, 5%, 12%, 18%, 28%). In addition, Compensation Cess applies on select goods. Government should consider converging the existing band of GST rates to three in line with international standards. This will help resolve interpretation issues, reduce complexity and probability of disputes.

With the introduction of the decentralized registration process, the cost of compliance and business process development has increased by manifolds. It is recommended that the concept of centralized registration for services as prevalent in the erstwhile service tax regime should be contemplated under the GST regime as well. This will enhance ease of doing business.

India needs to attract FDI in Research and Development activities ('R&D') as India lacks cutting edge technology. Receiving prototypes, semi developed tech samples from abroad and Testing activity plays a pivotal role while conducting R&D activities. Such R&D activities are denied to be treated as export of services. Instead taxed under GST@18%, as the place of supply by virtue of section 13(3)(a) of IGST, is the location where the services has been performed i.e. India in this case. This is making the R&D activity uncompetitive and many companies are shying away from further making an investment in India. It is recommended that IGST law may be suitably amended to notify that the place of supply of R&D services provided to foreign service recipients, shall be the place of effective use and enjoyment of service i.e. location of the service recipient.

Ujjwal Jain, CEO & Founder, WealthDesk
“Regulatory changes implemented in the last two years — starting with the imposition of LTCG in 2018, abrupt changes from providing Intraday leverage by stockbrokers and later providing relief, etc-have confused brokerages, fund managers, investors, and traders alike. Despite challenges and the pandemic, capital markets saw rapid growth last year. The industry now needs a holistic, unambiguous, and innovation-friendly regulatory regime for the emergence of a BigTech in Financial Services from India. Because multiple entities such as the RBI, SEBI, IRDAI and others govern the FinTech space, there can be an overlap of regulation and contrasting views. A single entity or window for regulatory support to tech-intensive fintechs cutting across verticals can avoid confusion and bring much-needed clarity.

Saurabh Saxena, Founder & CEO, Uable
The edtech sector is now playing a crucial role in building India’s human capital. This budget should consider reducing or removing GST from this industry. Schools and colleges are exempt from GST, and we need to level the playing field for edtech too.

Even when the pandemic is over, the demand for newer learning approaches will continue to surge. Students across the country are hungry to learn new skills online and this step can really lift the overall quality of education for every child.

Domestic investors still shy away from investing in Indian startups because there is a huge difference in taxation for the publicly listed and privately held companies. This discourages investors to put their money behind startups, which are mostly private entities. Abolishing the LTCG tax and bringing more startups under the Angel Tax exemption will help us with a better funding flow.

Anish Srikrishna, Chief Executive Officer, Times Professional Learning
Over the last few years, the government has launched many programs to strengthen the education sector. The ‘New Education Policy’ 2020, and the Sarva Shiksha Abhiyan have been significant. In the face of the current pandemic, it would really be heartening to see budget allocation for virtual education and virtual content creation under SSA.

The NEP 2020, being designed to direct education to provide vocational skills, should see an allocation form grade 6 students for government schools.

Ayush Mishra, CEO and Founder, Tattvan E-clinics
Over the last few months, millions of people have relied on video or telephone calls to talk to their medical professionals and doctors for discussing their medical issues. We believe that telemedicine will continue to exist and expect that in the post-pandemic era, around 40-50 percent of their OPD will continue to be conducted through teleconsultation together with other innovations in the industry including AI, ML, Tele-mobile operator services, etc. Telemedicine has not only helped people during COVID but for the people especially the elderly who are more prone to any kind of infection tele consultation has emerged as a boon, and follow up consultations through tele- consultations will be a great step towards geriatric care as well.  Tattvan itself did a huge telemedicine camp during lockdown for geriatric care in a senior living project at 5 different locations of Rajasthan, Haryana, Maharashtra and Karnataka and it was a huge success, so we have realised that the telemedicine sector will definitely be here to stay. The Union Budget 2021 will be tabled in just over a month’s time and the health sector is expecting more specific allotments in this year’s budget to mitigate Covid and growth of the telemedicine sector. The government should also support startups and private players in this segment to increase the current coverage of the locations including tier-2 and tier-3 cities to provide the advanced healthcare facilities in these areas.

Ambika Sharma, Founder & MD, Pulp Strategy
Covid 19 has hit businesses hard, technology adoption for businesses especially MSME has taken a backseat except in the most essential areas. The government can look at SOP’s for MSME’s adopting technology this will give a boost to MSME’s as well as to the digital industry. There are many initiatives for small businesses that have been launched in the last 2 years, I think it is important to refocus on them and set a TAT or improve the efficiency of those policies or systems. Improving efficiency should be of importance.

From a direct impact digital advertising perspective, it would be good to see improved policies with removal of levi’s on advertising in the few cases it is still applicable and bringing everything under GST, it will contribute to ease of business.

Digital has not reached its full potential from both a depth and breadth perspective there is more to be achieved. As the digital adoption increases in T3 & T4 and non-urban areas there will be an increase in regional language content and in turn localized advertising will grow, the future of digital will follow a similar trend like newspapers or television did decades ago, localized content and proliferation of platforms. Engagement has always been the centre focus; it is the largest contributor to ROI in advertising. Planned and sustained engagement with the brand is important to improve confidence, increase consumer satisfaction and drive loyalty. Loyalty translates into consistent brand adoption. It’s good for business.

Rohit Bhayana, Founder & Managing Partner, Lumis Partners:
The upcoming budget’s focus will be on the health sector, in terms of expanding capacity; putting in place a more shock absorbent groundwork; injecting funding in Biotech & Pharmaceutical research and development as well as bolstering recovery in other sectors, especially on improving infrastructure across the country.

I cannot stress enough on the need for Senior care as a sector with appropriate regulations and standards; policy support; tax structures; insurance for ease of cover and care at home.

In supply-chain, besides the PLI Scheme to remunerate the manufacturers, we would welcome simplifying the GST mechanism in the interest of ease of doing business, particularly doing away with the Anti-profiteering clause, which has outlived its purpose of smoother transition. Although, we believe automatic stabilizers should be the bedrock of consolid