On February 1, FM Nirmala Sitharaman will present what could be the most consequential Budget in years. Major focus points will be the status of the post-COVID recovery processes and policies. The Finance Minister needs a foolproof plan to help revive the twin cycles of CAPEX and credit.
The current year’s Budget is indeed a challenging task for the government as it has to meet the dual objective of getting the economy back on the growth trajectory, while simultaneously being mindful of the mounting inflationary pressures and fiscal slippages.
We talked to 22 entrepreneurs and business leaders in India about the same. Here’s a summary of what they expect from Budget 2021.
1Sandeep Aggarwal, Founder & CEO, Droom says
The aftermath of the COVID- 19 has not only accelerated the need of owning a vehicle but inclined towards online buying for an automobile to avoid physical contact. No country has ever created economic growth unless it has given transportation freedom to its people.
With that, we hope the Indian budget 2021 continue to invest heavily in road infrastructure and don’t criticize automobile for pollution because great road infrastructure will result in no pollution and no congestion on roads. All-in-all, time is now ripe for the government to take initiatives to digitize the highly important industry which is Automobile.
Demonetization, GST, and confusion around EV and BSVI have really tempered automobile demand last several years. The government should aim to announce things in this budget that can simplify the automobile industry including direct and indirect taxation, whether making it more complex.
2Farman Beig, Founder & CEO, Wat-a-Burger says
Due to the coronavirus outbreak, the food and beverage industry has suffered a major blow. Also, understanding the fact that this particular sector employs a huge number of semi-skilled and under-skilled manpower, it becomes imperative to enable a fast recovery system.
For a food service provider, it takes multiple licenses to be able to establish a business. And it has been this way for over years. This procedure needs to be simplified to make it more productive for an F&B business. Secondly, the sector requires reintroduction of the inputs tax credit. Hence, the budget is expected to provide the sector with smooth compliance and regulatory procedures and credit flow streams to accelerate the recovery.
3Vivek Sharma, Founder & CEO, Fixcraft says
The overall automobile industry has been suffering for quite a long time. Due to COVID 19, the situation has become even more challenging. The upcoming budget is expected to address this long-standing situation.
Also, for the startup community, it is imperative to maintain strong capital support. Investors have become very cautious about investing in the sector, hence a major fund allocation is required to keep the wheel rotating. There is also a need to ensure the ease of business procedures at all levels.
4Neeraj Tyagi, Founder & CEO, We Founder Circle says
The previous budget did not completely address the expectations and requirements of the startup ecosystem. There were some misses including – working capital crunch, tax parity on capital gains, etc. This time the expectations are more due to pandemics and this makes it a big opportunity too if addressed right.
After the COVID- 19 outbreak, startups are leading the technology adaptation across the sectors. This has further built an interest among corporate to invest in startups and technology-oriented projects.
Therefore, this is the right time for the government to incentivize the startup funding and work towards relaxing the policies to encourage angel investors to invest more. Also, the government needs to push major fund allocation and also lower the GST which currently has narrowed the scope of maneuvering for startups.
5Kumar Gaurav, Founder & CEO, Cashaa says
I am sure the government will give adequate finance for micro-business who are destroyed in Covid 19. Co-operative societies and NBFC who financed most of the microloans should get a compensation package or liquidity for faster recovery of the economy.
As the Supreme court has already removed the ban, the crypto industry will need some time to foster innovation in crypto in India. At this stage, the only good thing which can be done to overcome the damage done is to not over-regulate it.
6Kushang, CEO & Co-Founder, SupplyNote says
The startup ecosystem needs funds and capital now more than ever. The government needs to facilitate the capital inflow from all possible channels. The budget should remove the corporate dividend distribution tax or levy DDT at a low rate to encourage foreign investors.
Secondly, startups should be able to get easy loans at low-interest rates. At this point, it’s all about taking immediate steps for faster recovery. Digital India – Pandemic in 2020 has already pushed people to be more digital so Internet connectivity and smartphone penetration (digital infrastructure) to Tier 2 / 3 cities in India to have more penetration for the Digital India initiatives.
7Praveen Paulose, MD & CEO, Celusion Technologies says
We would like to see a speed up and incentivize the adoption of regulatory sandboxes and central initiatives like the CKYC / Account Aggregator. For example, this could create new value in customer experiences and core operations for the Banking and Financial Services industry.
The government can also encourage more roundtables and discussions with relevant regulators, allowing us to discuss pain points and opportunities. Considering the transparency, we bring, such efforts to engage the industry would be a net positive for banks and financial services.
The measures to be rolled out towards accelerating full recovery of key sectors such as MSME, businesses are expecting further relief to their working capital crisis. It also encourages self-employment, lowering the pressure on the government to create job opportunities.
8Lokendra Ranawat, Co-Founder & CEO, WoodenStreet says
In the budget 2021, the major focus will be on providing relief to the stress caused by the COVID-19 & on encouraging the growth of domestic organizations (to give further support to the Make in India initiative). Sectors such as automobile, IT, finance, & aviation will be the major focus.
2020 was the year of start-ups, which even during such times showed exemplary growth while bringing in investments of more than $11 Billion. So, in budget 2021, some more steps can be expected to further push the growth in the coming years. In addition to this, new corporate tax reforms can also be expected to provide further relief to the Covid hit sectors.
9Shankar Prasad, Founder, Pureplay Skin Sciences says
Undoubtedly, the real estate sector plays a pivotal role in the growth of the Indian economy. In fact, the realty domain is more or less an engine to the entire economic machinery, and many allied sectors and industries like cement, steel, building/construction material, paint, consumer durables which directly or indirectly witness an impact due to developments in the realty sector.
Hence, with a boost, the real estate sector is sure to have a positive impact on the associated sectors and industries as well. Moreover, if given the right push, the employment generation will also see a substantial rise.
10Dr. Harshit Jain, Founder & CEO, Doceree says
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.
11Nagaraju Routhu, CEO, Hero Realty says
The sector is basically divided into luxury, affordable, and mid-segment; each of these segments has its own set of expectations that needs to be addressed; the crux of demand from developers is almost the same as all of them are demanding better streamlining of the sector through various measures and improvement in liquidity.
Tier-II and Tier-III cities are also emerging as the realty hotbeds, which calls for proactive government intervention to see the realization of growth targets. As we are going through challenging times, we expect that FM’s Budget will truly be one-of-its-kind for the real estate sector too.
It will be a tough call for the FM as she has to balance the market needs and financial prudence. We hope that the Government will focus on improving infrastructure in tier II and III cities, employment generation in cities beyond metros, and fund allocation for the stuck projects.
12Harvinder Singh Sikka, MD, Sikka Group says
Although support to the sector was extended by RBI with low home loan interest rates and restructuring of loans, there remains a large gap to be filled for bringing about the lost momentum in the sector.
As customer inquiries and buyers’ interest in property investment begins to rise, the price of raw materials needs to be addressed under this Budget. Realty is further associated with multiple ancillaries; any relaxation provided to this sector will ultimately benefit a great number of associated stakeholders.
13Dhiraj Bora, Head – Marcomm, Paramount Group, says
An aspect that can be looked into is the accountability of authorities, they must be analyzed by RERA since delays in granting permissions impact the delivery timelines of projects, which further brings liquidity crunch for developers and negative sentiment among the buyers.
The reduction in real estate premiums and stamp duty for the Maharashtra region has brought a windfall of sales there, now the NCR market having the widest variety in the residential segment awaits similar policy measures to be announced.
14Achal Raina, COO, Raheja Developers says
The real estate sector needs the support of the Government wants every Indian to have a house. Escalating costs and delays are the biggest hurdles; Government must step in through income tax incentives to the developers, rightly priced land, availability of land in major cities for affordable housing, and so on.
The list of expectations is endless because the goal is large – to provide houses to everyone in the Budget that they can afford and still not compromise on the amenities or the deadlines given to the buyers.
15 Dhiraj Jain, Director, Mahagun Group says
Currently, the deduction for principal repayment of housing loan is Rs 1,50,000, and the deduction is clubbed with other tax saving instruments. We hope that the Government will increase the deduction under section 80C for principal repayment of housing loans from the existing limit of Rs 1,50,000; this will encourage the home buyers to expedite their buying decision.
16Akshay Singhal, Founder, Log 9 Materials says
I think for startups there are already a lot of initiatives in action, improved mechanisms for the execution of those schemes are extremely important. However, I am more concerned about the economy as a whole. To boost the 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.
17Annuj Goel, MD, Goel Ganga Developments says
Moreover, in the wake of rising construction costs, the government should consider a reduction in taxes on raw materials used in the real estate sector because these are the essential building blocks of the realty domain. Also, the real estate sector expects the government to reduce stamp duty and GST as well.
Further, we expect an increase in the deduction limit under Section 80C of the Income Tax Act in the interest of homebuyers. Also, tax benefits should be given on the interest component of the home loan paid on under-construction properties. As of now, this holds valid only for ready-to-move-in properties.
In addition to all these expectations, we want the government to come up with more policies for the real estate sector as this government has a huge focus on making India a self-reliant nation with its Aatmanirbhar Bharat and Vocal For Local like campaigns.”
18Pankaj Khanna, Chief Sales Officer, Gourav Luminaries says
Expectations and Hopes are very high from this first post-covid budget! On the demand side, we hope this budget strikes the chord with the common man. I certainly wish this budget would do the same, what Mr. Manmohan Singh’s Budget did in 1991 to the Indian economy. We also look up to this budget to encourage manufacturing.
Two businesses – lighting and solar – are dependent on China. We get most of our requirements from China. We need to have grounds up manufacturing of solar cells. The Indian government should also make LED manufacturing key for India. We can start reducing dependence on China for LEDs.
19Rohit Gawli, CEO of Lokal Kitchen says
Being a part of the third-largest start-up ecosystem, I feel the government should reduce the compliance burden and improve the ease of doing business. Starting with taxes, the high GST rate of 18 percent on online food delivery service providers must be drastically reduced.
A recent Mint article I read revealed some statistics on how customers opting for food delivery at their home or office are paying 13% higher price on the same food and beverages compared to customers who are walking down to restaurants as the dine-in tax rate is 5%.
I think it is time that this is changed as these high GST rates are harming the overall growth of our sector. The online food delivery sector in India has been growing by leaps and bounds, however, the tax complications arising due to the GST is likely to pose a roadblock to this growth. A reduction in GST rates will keep food costs affordable and create more jobs in the sector while furthering the government’s initiatives.
20Vikram Agarwal, Managing Director, Cornitos says
The government should reduce Individual Income Tax so that individual spending increases. Currently, there is up to 47% Income Tax on Individuals and 18% GST on products, hence paying 65% Taxes in totality. Secondly, GST Categories in food products have not much clarity and don’t cover all types of products. The government must make the GST Categories vast and clear.
Categories 1905 & 2106 have a lot of confusion and hence Industry is penalized by paying a 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 a 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 percent of the existing book value of plant and machinery should be treated as a 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 the cost of raw materials.
21Bhaskar Majumdar, Managing Partner, Unicorn India Ventures says
Since offline businesses are hit badly and every business owner is planning to go online, we expect the policies that make it easy for businesses to go online. This is also true for families who have to respond to education for children online. Small businesses don’t have the resources to meet tedious compliance requirements like GST.
The government should ease rules and also offer support/exemptions to small and medium businesses from certain mandatory compliances. What a listed entity with armies of staff can do, a startup can’t be expected to do the same.
Overall the budget needs to facilitate easy access to capital to businesses that are reeling from the after-effects of COVID. Apart from this, there should be some relief for businesses that have suffered significant losses during the lockdown and thereafter.
22Pankit Desai, Co-founder CEO, Sequretek says
As 2020 pushed businesses to adopt digital transformation, it was also a year of the highest number of cyber attacks on Indian companies and even some govt agencies. Indian startups are especially on the radar of some notorious threat actors.
Union Budget would be the right platform to address the need for implementing cybersecurity mechanisms and if FM can announce an Indian cybersecurity mission that will help tech startups to adopt a cybersecurity policy with a defined framework.
WRT to business growth, Budget 2021 should make efforts for startups of Indian origin to get a preference in procurement, though there are certain guiding principles, they haven’t been enforced as yet.
The startup community will be looking at the budget expecting means and mechanisms to attract the right investors, the right talent, and the right opportunities to script a new, safe chapter in the Indian business ecosystem.
Image Credits: Moneycontrol