Budget 2020: Industry hails Nirmala Sithraman's fiscal roadmap; lauds schemes on job generation
India Inc termed the Budget as 'growth provoking and welfare inducing'
India Inc termed the Budget as "growth provoking and welfare inducing"
The finance minister proposed new slabs and reduced tax rates under them for an individual income of up to Rs 15 lakh per annum, if a taxpayer opts for foregoing exemptions and deductions
The minister proposed raising customs duty on a variety of products ranging from tableware and kitchenware, electrical appliances to footwear, furniture, stationery and toys to give a level playing field to domestic companies and boost 'Make in India'
India Inc termed the Budget as "growth provoking and welfare inducing" but said that urgent implementation of the measures proposed will be crucial for achieving desired outcomes, while acknowledging that Finance Minister Nirmala Sitharaman had "little room" to manoeuvre.
Ambrish Sinha, CEO, MeritTrac Services
The Union Budget 2020 has proposed propitious changes that have the potential to revolutionize the education sector. The budget of Rs 99,30, allocated to the sector will help to improve the overall quality of education and create employment opportunities. An appreciative step of the government is the proposal to set up a national recruitment agency for the conduct of computer-based online common eligibility tests for recruitment to the non-gazetted posts. This is a step in the right direction to bring transparency, efficiency and ‘best in class’ technology-enabled solutions to the recruitment process. MeritTrac as a leader in CBT assessments welcomes this initiative and we hope to leverage this opportunity.
Gabriel Dalporto, CEO, Udacity
The government's focus towards promoting online education opportunities and emerging technologies like analytics, machine learning, AI, bioinformatics is also promising. More so because AI and IoT are impacting almost every sector of the economy and require skill development and it is not always possible for people to take a career break for upskilling themselves. They need faster, affordable yet highly effective solutions. The proposal to allocate Rs 99,300 crore for the education sector and Rs 3,000 crore for the Skill India programme shows that the government is inclined towards skill development and creating more job opportunities for the youth of the country.
Himani Khanna and Puja Kapoor, Co-founder, Continua Kids
For startups like us, tax concession has been extended which is welcoming. Also, the cess on imported medical equipment has been reduced from 20 percent to 15 percent can be beneficial. A lot of thrust has been given to the healthcare sector. The finance minister has included 12 diseases into Mission Indradhanush to prevent vaccine-preventable diseases. By the year 2024, every district will have Jan Aushadhi Kendra so that everyone gets medicine at reduced cost.
Shobhit Bhatnagar, CEO & Co-Founder, Gradeup
As an EdTech entrepreneur, I am pleased that the government has announced a degree-level full-fledged online education programme, which will be offered by institutes ranked in the top 100 by the National Institutional Ranking Framework. Online education is the way forward if we have to provide affordable, accessible and quality education in the country. Apart from that, the proposed Common Eligibility Test for recruitment to non-gazetted govt posts will result in saving a lot of time and effort of aspirants. And of exam conducting bodies because students prepare for a multitude of exams every year; with each government body having a different selection procedure and requiring separate preparations. However, it remains to be seen what steps the government will take to ensure this.
Sumit Kumar, Vice President – NETAP, TeamLease Skills University.
This Budget has been a promising one for the education sector and will surely address the skill deficit that India currently faces. Enabling higher education institutes to have apprenticeship programs by 2021 will improve youth employability and create a strong job-ready workforce. The allocation of more funds for both education and skilling and funds generated through FDIs should be used to improve the quality of learning, upgrade teachers/trainers and strengthen the infrastructure.
Shantanu Rooj, CEO & Founder, Schoolguru Eduserve
The country has been long awaiting the implementation of the National New Education Policy and the assurance from the finance minister of its roll-out is reassuring. However, the Budget disappointed on the meagre increase in the amount allocated to the sector, no relaxation on GST for online courses and no extra allocation towards subsidisation of the stipend for apprentices that could have propelled more employers to partner with Universities in this initiative. The realisation, that the tight control by the medical regulator which results in India producing far lesser doctors than what it needs, is a welcome step.
Siddhartha Gupta, CEO, Mercer|Mettl
The Finance Minister’s focus on bringing equality and consistency in the benefits of capacity building and skill development across different segments of the society is brought to the front with total budgetary allocation of over Rs 102,000 crore towards education and skill development. This will ensure increasing number of skilled employable workforce, which will go a long way in the economic progress of the country with wider sectoral impact across healthcare, agriculture, infrastructure, etc. Focus on developing the tech and digital economy is also seen receiving the due attention as adoption of new age solutions powered by Artificial Intelligence (AI), Machine Learning (ML), IoT has been prominently addressed, apart from the set-up of data centre parks throughout the country, thus bringing about greater integration of rural and urban India.
Zishaan Hayath, CEO & Co-Founder, Toppr
This year’s budget focuses largely on skill development for young professionals. While the focus on scaling up youth’s skill set is necessary, the budget had a glaring lack of initiatives for primary and secondary education which is the foundation of one's life and career. The Budget also announced that certain examinations will be moved online. This is a welcome development, especially as JEE and NEET are now online as well. While this makes examination and evaluation process more efficient, it also encourages students to prepare online for exams. Technology is the future of education and the more we can do to get our students to study online, the stronger our education system will be. However, we need more clear and concrete steps that could upgrade our education system significantly. A lot more thinking and fast execution is needed to make education advanced and personalised.
Gautam Bansal, SVP, Finance, Shiprocket
We believe that this year's Budget will boost the domestic economy. Despite her fiscal constraints, the finance minister has introduced policy measures that will stimulate domestic consumption, encourage investment and also strengthen the Indian infrastructure. Constructive policies have been launched in field of integrated logistics. There will also be a visible improvement in MSME competitiveness as the government has allocated 900 cr for their debt funding. We welcome this year's budget and now wait to see how it pans out in terms of implementation.
Rajan Sharma, Founder & CEO, excess2sell.com
This is a very strong Budget in terms of focus on fundamentals. It has focused on agriculture, simplifying tax structures, infrastructure, and on self-reliance for the long term. The Hon’ FM has tried to create a level playing field by going to markets for fundraising rather than through the tax route. The continued emphasis on technology will help in the coming years to ensure ease of business, transparency and better compliances by all stakeholders. With tax rates reduced on the existing tax slabs, consumers will have more to spend. We are happy that e-commerce was today defined for the first time in the Budget and we look forward to policy initiatives on new-age business formats. With tax-deferred on ESOP and early-stage fund for start-ups, we feel this Government has good intentions to ensure that technology and knowledge-based entrepreneurship is encouraged in our country.
Amrinder Singh, Director, Bonn Group of Industries
We welcome the moves proposed by the Narendra Modi-led government to introduce extraordinary measures for the development in rural areas in Budget 2020. Skill-development fund allocation by the government for the youth in the rural sector to provide jobs will enhance the rural sentiments and provide more opportunities for growth. As one of our main focuses is also rural India, higher rural income would help in picking up consumption. Doubling farmer income by 2022 will also bring a positive change for FMCG companies' growth. Even a cut in personal tax rates to spur consumption will also lift of shares FMCG companies.
Ankur Gupta, Joint Managing Director, Ashiana Housing Ltd.
The middle income and affordable housing segment in Indian real estate will see a continuous boost with the finance ministry's announcement on the sector. Certain other factors like liquidity crunch, funds at lower rates, additional foreign investments, single window clearance, etc. should also have been a focal point in the finance ministry's agenda since they will drive a steady, speedy growth of the sector.
Amit Jain, MD, Arkade Developers
While the Union Budget 2020 has not addressed the issues of buyer sentiment and the real estate slowdown which was at a low point in the year gone by, it has focused on affordable housing. Keeping in centre the development of infrastructure and continuing the affordable housing mission, there are chances of a turnaround in the sector. While it is too early to predict the possible outcomes of the announcements, we remain hopeful that the sector will see sales increase. Simultaneously, through the NSDC, we can look forward to skill development in the infrastructure sector. Furthermore, the development of infrastructure will also aid in the development of the real estate sector.
Rajesh Aggarwal, Managing Director, Insecticides India
By allocating Rs 2.83 trillion for the agro and allied sector and promoting balanced use of fertilizers, the government has renewed its resolve to meet the goal of doubling farmer's income by 2022. The Budget provisions for the agricultural sector to increase farmers' income by using fallow/barren lands to set up solar plants is an innovation and welcome step. It may not only addresses the income gaps by providing an additional means but may help in addressing the energy gap, especially in remote and far-flung areas that remain outside the grid. The focus on pulses cultivation and micro-irrigation is timely and required to ensure food security. However, in view of the revised targets for economic growth, we need to be watchful as to how this assurance is met with.
Rahul Grover, CEO, Sai Estate Consultants
This year, the Budget has revealed the government's intentions towards bettering infrastructure. The National Infrastructure Pipeline includes 6,500 projects across the country and Finance Minister Nirmala Sitharaman has also announced the allocation of Rs 27,300 crore for industry and commerce in FY21. The scope of commercial projects will show an incline, as can be seen from the government's plans of developing a 9,000-km economic corridor. Along with this, plans for developing strategic national highways have also been announced, which can help bring about developmental changes in the real estate sector as well. Additionally, Sitharaman has also extended the tax holiday on profits for developers involved in affordable housing projects till March 2021.
Farshid Cooper, MD, Spenta Corporation
The most telling thing to come out of Budget 2020 is the tax relief to individuals. The amended tax slabs will ensure more disposable income in the hands of the middle class. This could lead to reviving the consumption cycle in the realty sector and kickstarting the economy. Further, with additional savings, individual investments in housing, especially affordable housing could see an uptick in the near future.
Hakim Lakdawala, Group Promoter, Goodwill Developers
The new tax regime and extension of the date to sanction housing loans by a year will ensure surplus funds in the hands of potential home-buyers, acting as a positive tool in recuperating consumer confidence and prompt investments. Further to this, reduced taxation of 5 percent to diminish adversities in real estate transactions and the extended affordable housing approval date for developers to claim the tax holiday will attract more builders to actively participate and develop more affordable projects thereby fueling the momentum of 'Housing for All by 2022'.
Ashok Mohanani, Chairman EKTA World and Vice President, NAREDCO Maharashtra
The Budget focused more on infrastructure upgrade of Chennai-Bengaluru and Delhi-Mumbai Expressway estimated to be completed by 2023. This will not only raise the skill development in the infrastructure sector but will also open new markets for builders along with residents. Proposing the development of 100 new airports to be built by 2024 under Udaan scheme will bring in NRIs to India and increase the investment in the country. To bring in indirect relief to the real estate sector proposal of spending Rs 100 lakh cr on infrastructure development in the span of five years is the biggest news for the sector keeping in mind the current state of huge crash crunch in the economy. With this, the sector will be impacted towards expansion but the benefits will be observed in the later years.
Anurag Mathur, Chief Executive Officer, Savills India, real estate services provider
The government has focused on ensuring surplus disposable income in the hands of consumers. One of the important announcements in this area has been the recalibration of the personal income tax rates. Removal of Dividend Distribution Tax is another commendable step. The single investment clearance cell will bring additional efficiencies. The extension of tax holiday for affordable housing is on the expected lines, given the pressure on the sector. The focus has been retained on urban development by committing to 5 additional smart cities. The focus to boost the primary sector, warehousing, infrastructure and PPP will be useful in the long term. Having said that, the Real Estate sector would have preferred additional benefits.
Rohit Poddar, MD, Poddar Housing and Development Ltd
The real estate sector was expecting to see big-ticket reforms from Budget 2020-21. While the government had announced a slew of reforms last year, the real impact is yet to be seen on-ground. The government in Budget 2020 has provided a direction in which it wants to go in terms of infrastructure and rural development spends. Hopefully, over the next few months, the implementation will take place, which will revive India's consumption-led economy.
Manish Ramjiyani, Managing Committee Member, CREDAI MCHI RAIGAD:
The Budget has brought welcome relief to the real estate industry, especially those in the affordable housing segment. The proposal to extend tax holiday on profits earned by developers is welcome as last year the real estate industry has suffered due to low sales figures. The government has also extended an additional Rs 1.5 lakh tax benefit on interest paid on affordable housing loans which is a relief to homebuyers. This along with the revision of the income tax slabs will encourage home buyers to invest in their dream homes. The Budget has also announced an investment of Rs 103 lakh crore in various infrastructural projects which will enhance the connectivity and we hope that it has a positive impact on the property prices.
Nimish Gupta, MD, Royal Institution of Chartered Surveyors, South Asia
As a further boost to the real estate and construction markets, it would have been beneficial to see the government create a formal structure around rental housing and encourage home buying by increasing the tax exemption for housing loan repayments. Additionally, a one-time restructuring of loans for developers would have brought back a tremendous amount of confidence in the market.
Vikas Jain, CEO, Labdhi Lifestlye Limited
We welcome the proposal of extending an additional Rs 1.5 lakh tax benefit on interest paid on affordable housing loans to March 2021 as this is an encouraging move by the government for homebuyers. The new reduced income tax reforms based on an individual’s income will increase the disposable income and purchasing power of consumers, leading to increased sales. The Budget allocated for new infrastructural projects will improve connectivity and benefit the real estate sector. One-time rollover of loans was necessary to resolve the liquidity issue to improve the sales in the sector.
Sudhanshu Agarwal, Founder & Director, Citykart
The announcements made by the government in Union Budget 2020 are a promising move to boost the income and purchasing power of people. So far, the rollout of GST has resulted in gains of about Rs.1 lakh crores to consumers, which is likely to increase further with revised GST laws being implemented from April 2020. Simplification of GST norms will be significant in inspiring consumer demand & consumptions and spur industrial growth. Additionally, allocation of Rs.100 lakh crores for infrastructure development also opens growth prospects for the brands in non-metro cities. However, we feel specific measure pertaining to the retail sector have still not been fully addressed in the budget."
Arjun Ranga, Managing Director, Cycle Pure Agarbathies
The policy reforms announced by the Finance Minister will surely boost the economy and enhance the purchasing power of the common man. Steps taken towards financial inclusion, digitisation, employment generation, and tax deductions in Budget 2020 will definitely help us grow exponentially. The government's initiative to remove DDT will lead to additional funds in the hands of companies that will definitely promote investment and expansion.
Entrepreneurship has always been in our country's DNA, the government's proposition of providing a single e-market platform, subordinate debt schemes and audit exemption from 1 crore to 5 crores, looks promising for the MSMEs across the country. We also appreciate the Government's vision to generate employment especially in rural areas, and their initiatives towards sustainable infrastructural development.
Ramesh Ramanathan, CMD, Sterling Holidays
We are pleased with the proposed Budget, as it will play a pivotal role in the hospitality and domestic tourism sector, and will have a multiplier effect across the board. We are also happy with the Budget’s focus on tourism, wherein a total of Rs 3,100 crore has been set aside for the Culture Ministry in FY21, and five archaeological sites will be set up with museums on-site in Rakhi Gadi in Haryana, Hastinapur in UP, Dholavira in Gujarat, Shivsagar in Assam and Adichanallur in Tamil Nadu, along with a tribal museum to be set up in Ranchi, Jharkhand, and a Maritime site in Lothal. With Rs 2,500 crore being allocated for tourism promotion, the domestic sector will receive the desired boost.
The allotment of 1.7 lakh crore for transportation and proposal for more transport facilities including 2000 km strategic highways along with Tejas Express-type trains and 100 more airports to be developed by 2024 to support the Udaan scheme will make access to more locations easier. The golden quadrilateral will also work towards making travel in India feasible, whilst improving connectivity. Further, a total of Rs 3000 crore allotted to skill development will facilitate employment generation, especially creating opportunities for the skilled youth of the country.
Gurbaxish Singh Kohli, Vice President, Federation of Hotel & Restaurant Associations of India (FHRAI) & President, Hotel & Restaurant Association of Western India (HRAWI)
This Union Budget, like the preceding Budget has neglected the Hospitality industry. While the budget allocation of Rs.2500 crore for the Tourism sector sounds like it may translate to spill-over benefits for the Hospitality sector, we don’t have sufficient information about where or how the funds will be used. The increase in the number of Tejas type trains to iconic destinations has the potential to boost travel but alas is vague. The construction of 100 airports is also an encouraging announcement but unless infrastructure is boosted nothing will take place. We have been expecting reforms in rate slabs of GST, Input Tax Credit (ITC) and a definitive step to boost the domestic and inbound traffic. It has been our long-pending demand to include Tourism in the concurrent list which has not seen the light of the day, nor has Hospitality been given infrastructure status. Unfortunately, none of the concerns of the industry has been addressed in this Budget.
Chet Jainn, Founder & CEO, Crowdera-fundraising and crowdfunding platform
I think it's a very good move deferring the ESOPs or deferring it for 5 years, till they sell it or leave the company. I think it's a very interesting move and startups will be able to exercise such facilities to hire more talents. Though it's financing for MSME is also a very interesting topic where a lot of MSMEs will be able to leverage this opportunity to scale, finance their invoices and keep increasing their production with the additional financing options that they would have. And almost Rs 100,000 crore education sector package is subtly going to boost the economy to the education sector. Ed-tech companies and certain other educational programs are going to benefit. I am very sure interesting permutations and combinations are possible when the innovative startups come into the education space with this. We will have to see the details of Rs 99,300 crore package that the government has announced.
RN Iyer, Founder and CEO, Vayana Network, Trade Financing Platform-MSME
Enabling easier access to working capital through a digital framework can be a great boost for MSMEs. This can emerge as simple on-tap financing for B2B Ecosystems. Amending the Factoring Regulations Act to allow NBFCs to bid on the TReDS platforms can help widen the coverage of Corporate supply chains benefitting from these platforms. Specific sectors that could see growth revival include electronics manufacturing, healthcare and medical devices, and export driven sectors like pharma, auto-components, marine & fisheries, etc. We will continue to work closely with all institutions and stakeholders to take the fruits of these measures to the last mile MSMEs.
Shachindra Nath, Executive Chairman, UGRO Capital-SME-focused non-banking lender
"The proposal to allow deposit insurance and credit guarantee corporation to increase deposit insurance coverage to Rs 5 lakh per depositor compared to the present Rs 1 lakh is extremely significant, as it will increase trust in banking. The reduction in the NBFC Eligibility for SARFAESI Act to Rs 100 crore from Rs 500 crore AUM will boost the confidence among small NBFCs and reduce the cost of borrowing for MSMEs. The proposal to allow NBFCs to extend invoice financing to MSMEs will boost productivity in the sector.
Siddharth Mahanot, Co-Founder and COO, Indifi Technologies
In a welcome move, the Central Bank has been asked to extend the Debt Restructuring window for MSMEs by a year to 31 March, 2021. This move will help MSME players to tide over the current economic downturn. An app-based invoice financing loans product is another positive move, alleviating the issues faced by Indian MSME players related to delayed payments and mismatched cashflow. Further, the NBFC Eligibility for SARFAESI Act has been reduced to Rs 100 crore from Rs 500 crore AUM. This change will put NBFCs on par with banks and housing finance companies from a recovery standpoint and serve to encourage the emergence of more new-age players in this space. Inclusion of NBFCs in Treds is also a welcome step in providing depth to invoice financing market.
Chandrahas Panigrahi, CMO and Consumer Business Head, Acer India
This is positive budget overall from the technology focus point of view. We are pleased that the government is allocating Rs 8,000 crore for the National Mission on Quantum Computing and Technology. The government’s move on encouraging manufacturing of electronic equipment in India is also a big step as this would provide much needed impetus to technology and manufacturing sector, which has been developing capacities and generating employment opportunities. Also, more focus on technology such as Machine Learning, Robotics, AI will support the industry to grow and establish India as a robust ecosystem for technology and innovation.
Pavan Kushwaha, CEO & Co-Founder, Kratikal
Digital India does not seem like a far-fetched dream with Finance Minister Nirmala Sitharaman allocating Rs. 6000 crores for BharatNet. Currently, the Indian population registers at 1.38 billion. Out of 1.38 billion Indians, there are 560 million internet users in the country and this number is growing by 18% every year. It has been estimated that by the year 2021, the digital population in India will cross the mark of 800 million. This will lead to a boost in the usage of digital products and we are aiming to provide security solutions that will help in securing these applications and products.
Atul Todi, CEO & Co-Founder, 10Times
The Union Budget has taken the right move by deferring tax liability for employees on ESOPS by five years. This will help start-ups attract talent that they may not be able to afford by offering upfront high salaries. The decision to extend the turnover threshold for qualifying for 100 percent tax exemption from Rs 25 crore to Rs 100 crore is also going to help start-ups grow fast. I appreciate the government’s decision to allocate Rs 99, 300 crore for the education sector and Rs 3,000 crore for skill development. At this juncture, India needs to meet the demand of the skilled workforce, and the government’s intention and direction seem to be correct.
On the infrastructure front, especially the target of building 100 airports by 2024 under UDAN scheme is ambitious and needs to be seen getting implemented on time before betting high on it. The announcement of allocating Rs 6000 crore under the Bharat Net programme with a focus on digital connectivity across India will unleash the true potential of the country by promoting entrepreneurship and newer markets for innovative products and services.
Krishna Kumar Karwa, Managing Director, Emkay Global Financial Services
Capital Market investors will be disappointed with no relief on LTCG and the lack of big-bang stimulus on real estate or infrastructure. The removal of Dividend Distribution Tax seen as a continuation of the earlier step of reducing corporate tax is well-appreciated and sends the right signals to local and global investors. The option to individuals to opt for a lower tax slab structure with no deductions or to continue with the earlier higher slabs with deductions for home loan EMIs, investments in insurance etc. seems slightly confusing. In a country like India with a young population with poor social security, it is imperative to incentivise young India to save for the future and own a house as well. The provision to settle existing Direct tax litigations by paying the Disputed tax and getting relief on penalty and interest should see big success ad raise revenues for the government almost immediately.
Vijay Chandok, MD & CEO, ICICI Securities
With growth resurrection being the key priority, the government has stepped up the capital expenditure allocation by 21 percent. Credibly, glide path was maintained with a fiscal deficit for FY21E pegged at 3.5 percent of GDP, while maintaining the inclusive growth template through focussing on the quality of spending. Prima facie, FM’s speech implies that simplification and rationalisation of personal income tax rates is likely to be a key catalyst for consumption pickup. Furthermore, the abolition of Dividend Distribution Tax is positive for listed space and Indian equity capital markets as a whole with benefits accruing to small as well as overseas investors.
Srinivas Rao Ravuri, CIO,Equities, PGIM India MF
The key positives are a) tax exemptions given to sovereign funds to invest in India b) extending concessional corporate tax of 15 percent to power sector also c) removal of Dividend Distribution Tax. Key disappointments were on the slippage of fiscal deficit—though slippage was in-line with expectations but absence of any concrete measures to accelerate spend on core sectors like infrastructure is a concern.
Sameer Mittal, Managing Partner, Sameer Mittal & Associates LLP; Chairman, International Trade Council in India
Budget 2020 structured on three themes of Aspirational India, Economic Development and Caring India is an average budget as the government has endeavored to focus on all sectors with these three themes. A 16 point action plan to boost the agriculture sector if implemented properly shall help India’s production to go up substantially and a major increase in income of the farmers. Along with the implementation of these points, the government will be required to focus on creating awareness about the initiatives and educate the farmers to take effective benefit of the schemes. The government’s proposal and fund allocations on education for all, skill development, water availability for all, sanitation and healthcare facility in tier II and III shall help to create infrastructure which will assist in overall growth of the economy in the long term.
Setting up of the dedicated investment cell and single window clearance for business set up shall act as a catalyst in ease of doing business in India and giving confidence to the entrepreneurs and foreign investors. MSME’s may get some relaxation through the provision of NBFC’s extending credit in form of invoice discounting – this shall bring some partial cashflow to the business.
Omkar Rai, Director General, Software Technology Parks of India
Union Budget 2020 is a defining moment for the Indian IT industry by bringing in proactive policy measures on emerging technologies such as AI, ML, Data Analytics and Quantum Computing. In addition to this, the policy on establishing data centers across the country will strengthen the necessary IT-grade infrastructure required for discharging services to the remotest part of the country while bridging the digital divide, revolutionize the digital economy and significantly play a catalytic role in securing data sovereignty of the nation, and eventually it will also bring enormous FDI into this sector. Further incentivizing the startups will fuel their growth and build momentum in transforming the country into a software product nation.
Ambika Sharma, Managing Director & Founder, Pulp Strategy
With India currently posed as the fifth largest economy in the world, I am particularly enthralled by the government’s decision to optimize new-age disruptive technologies such as Machine Learning, robotics and Artificial Intelligence (AI) towards attaining a seamless and integrated service sector. Further advancing the digital revolution in the country is the government’s resolution of developing state-of-the-art data centers across the nation. Moreover, the finance minister’s proposal to allocate Rs 6,000 crore for connecting 100,000 Gram Panchayats by FY21 will also prove instrumental in accelerating India’s journey towards becoming a tech–enabled nation.
Abhishek Kumar, Regional Director, Onvu Tech
The government has announced a number of measures for the education sector with a whopping Rs 99,300 crore Budget. With it, courses will go online soon and Top-100 NIRF Ranked Institutes start offering them. The government has also announced positive reforms including Asian-African 'Study in India' program, establishment of Police Academy and Forensic Science, and integration of medical institutes with dist. hospitals. Rs. 3000 crores have further been allocated for Skill Development. Perhaps, all of these reforms will go a long way by including video-analytics-based EdTech solutions to them as well.
Akash Gupta, Founder and CEO, Zypp (Earlier known as Mobycy)
We are glad that the Finance Minister has emphasised on improving the air quality, citing that the matter of clean air is a matter of concern in large cities that have a population of over 1 million. To the same end, we believe that EV-powered everyday commuting solutions offered by Zypp through Electric Scooters and Logistics solutions will play a crucial role in times to come. The Budget announcement further comprises positive news for India’s fast-growing start-ups. The proposal to set-up investment clearance cell for entrepreneurs along with assistance in funding would definitely prove to be extremely beneficial. Furthermore, increasing the threshold of start-ups eligible for tax deduction from an annual turnover of 25Cr to now up to 100Cr is another welcomed move.
Anil Kumar Gupta, Partner, MicroSave Consulting
Interestingly, the Budget talks about artificial intelligence (AI), machine learning (ML) and Internet of Things (IoT) at quite a few places. It also refers to entrepreneurs and startups also. This focus is a good sign for the entire startup and technology community. The relaxed provisions of ESOP will help startups attract and retain top talent. Besides finally recognizing start-ups having a turnover of 100 crore for tax holiday will boost the growth stage startups. Setting up of investment clearance will help the budding entrepreneurs to build new solutions for India's diverse needs.
Aakrit Vaish, CEO, Haptik
As digitization and advanced technologies continue to gain momentum, we welcome the Budget 2020 announcements. Once again, the Finance Minister’s emphasis on machine learning, robotics, AI and IoT will help boost India’s digital journey. A significant proportion from the allocation of Rs 3,000 crore for skill development should focus on these cutting-edge technologies. We are also delighted to witness proposals such as the linking of 100,000 Gram Panchayats through the enhancement of Bharat Net and setting up of data centre parks across the country.
Hemal Gathani, Co-founder, Zeux Innovation
Two messages stand out from the Budget for companies like us. One, the commitment being demonstrated by the government to emerging technologies and initiatives being taken to improve the ecosystem—be it in terms of setting knowledge or technology clusters or announcing a National Mission on Quantum Technologies. Two, trying to do their bit in creating more stable start-ups by resolving issues such as tax relaxation on ESOPs.
Kabir Siddiq, Founder and CEO, SleepyCat
The focus thus far in the Union Budget 2020 has been on the implementation of technology as a solution in several areas. This is a great initiative since technology can definitely help solve problems and create new opportunities. The Investment Clearing Cell is a good move for startups and entrepreneurs. The boost towards improving internet connectivity is also helpful—not just for startups and penetration of e-commerce but towards creating new employment opportunities as well.
Ravi Pardhi, Co–Founder and CTO, Skillbox
The Union Budget 2020 has certainly brought a lot to cheer for startups and addressed some key pain points. Important among them was the 100 percent deduction of profits for three consecutive assessment years and extending the period of eligibility for deduction to 10 years for startups. This will allow them to reinvest the money back into the business and help it grow. Second, was the announcement related to easing of tax burden on employees by deferring the tax payment on ESOP's by five years or till they leave the company or when they sell, whichever is earliest. This will alleviate the cash flow problems of employees that arise while funding the tax at the time of exercising ESOP's and help startups incentivise good talent. The third encouraging announcement was the setting up of an investment clearance and advisory cell and an online portal to facilitate faster clearances for start-ups at a state and central level. This will reduce clearance time both for investment and routine clearances significantly, and also help start-ups navigate the complicated process of fundraising through crucial advisory support.
Dharmender Kapoor, CEO & MD, Birlasoft
We laud the Budget presented by Finance Minister Nirmala Sitharaman. The Budget has clearly recognized the importance of Talent, Technology and Entrepreneurship in the growth of the country. It is commendable to see the continuous commitment of the government to bridge the skill gap and to develop India's large talent pool, for which the government has allocated Rs 3,000 crores towards skilling. Technology is a given and digital technology is the force driving the turmoil for this industry, whose future is yet to be unleashed. The proposal of a policy to set up data centre farms throughout the country will push more efficiency on data, as data is the new oil, but right now it is in the form of crude oil.
Mike Chen, MD, India,TCL
At TCL, we believe that the Finance Minister has announced an encouraging Union Budget 2020. Proposing the scheme to encourage the manufacturing of mobile phones, semiconductor packaging and electronic equipment is a welcomed move and we look forward to a complete policy and leveraging the same to kickstart the domestic manufacturing through our panel factory in Tirupati. Furthermore, painting a futuristic picture in this year’s Budget announcement, the finance ministerM also acknowledged advanced technologies like IoT, AI, and analytics changing the world. At TCL, we are forever committed to advancing our ‘AI x IoT’ ecosystem in India and will continue to invest in cutting-edge technologies to offer the best services to our customers in India.
Piyush Kumar, Founder & CEO, Rooter
It’s very encouraging to see that Government regards entrepreneurship as “strength of India”. Start-ups can not only get a lot of foreign investment in India but also create thousands of jobs. The investment clearance and advisory cell for entrepreneurs is a great step to encourage new entrepreneurs and provide assistance. Moreover, the seed fund to support early-stage start-ups will help them to create quality market fit product before approaching VCs.
Rakesh Kharwal, Managing Director, India/South Asia & ASEAN, Cyberbit
The government has highlighted the role of digital technologies like analytics, IoT, AI, and quantum technology during this Budget Session. The burgeoning digital infrastructure of India needs a strong cybersecurity framework to support it. Now, since it has allocated Rs 99,300 crores to the education sector and Rs 3,000 crores for skill development itself, a good way to realize India's digital vision could be by working on the cybersecurity front from the very beginning. The government may want to cover its tech initiatives with avant garde simulation-based cybersecurity training platforms like Cyber Range for proposed cyber forensic university and Skill India campaign. This will help India in generating millions of jobs for the youth and also strengthening national security.
Rahul Sharma, MD-India, LogMeIn
Budget 2020 looks very promising. We are particularly enthused about the finance minster’s announcement of seamless delivery of digital services as part of the next wave of digital revolution. AI, ML, Analytics, IoT, Robotics are making giant inroads in India, as was observed in the budget. The policy being introduced to build data centre parks throughout the country will help enhance the digital infrastructure to a significant extent. We are looking forward to the next phase of Digital India which will be a big growth driver for businesses and individuals alike.
Suganthi Shivkumar, Managing Director, ASEAN, India & Korea, Qlik
We appreciate the government’s decision in the 2020 Budget to dedicate the necessary funds and resources towards developing revolutionary and breakthrough technologies such as ML, robotics and AI to further the skills that will prepare us for the next wave and accelerate India’s journey towards becoming a digital giant. With data equated as the new oil, the government’s plan of building cutting-edge data parks across the country is equally important. Furthermore, the government's initiative of allocating Rs 6000 crores to enable unabridged digital connectivity in over 100,000 Gram Panchayats through the Fiber to Home BharatNet scheme holds brilliant potential in securing India’s passage towards achieving tech-empowerment for the remote sector.
Tanul Mishra, CEO, Afthonia Lab
While I welcome the steps taken by the government for deferring the ESOP tax for registered startups by 5 years from exercise or on leaving the company or at the time of sale to smoothen the cash flow, I believe that there is a need to ease the norms on the ESOP tax because there is a huge gap between the quantum of startups that qualify under this category versus the ones those exists. Also, being an incubator that helps early stage startups, I am glad that the government is allowing 100 percent deduction of startups profit for 3 consecutive years. This will boost the early startups to sustain in competitive environment.
Yashash Agarwal, CEO, Gamezop
The finance minster's proposal of delaying tax collection on the exercise of ESOPs is a welcome move. The current structure looks to collect taxes too early causing employees to not exercise vested shares. Easing direct taxation for eligible startups will encourage businesses to chase the right metrics and not just growth at the by bleeding money. The definition of "eligible startups" must be broadened to bring more companies in this fold.
Gaurav Gupta, Co-founder, Navia Life Care
From the healthcare sector perspective, Finance Minister Nirmala Sitharaman addressed accessibility issues and setting up of more hospitals in Tier-II, Tier-III cities under the PPP model for expansion of the Government’s Ayushman Bharat scheme is a step in the right direction. It would definitely assist health-tech startups like Navia to expand it’s reach to Tier-II and Tier-III cities. Also, even though the budget allocation of 69,000 crores to the healthcare sector represents about a 10.5 percent jump from 2019 in absolute terms, India’s public healthcare spending still stands at a little over 1 percent of GDP and it has a long way to go in comparison to other developing countries where public healthcare spending stands at around 2-2.5 percent of GDP.
Shireesh Sahai, CEO Wolters Kluwer India
We hope that the government will accelerate implementation of the country’s digital health infrastructure as envisaged in the National Digital Health Blueprint. The investment in digital tools to supplement the new competency-based curriculum as part of the special training packages for doctors is very important. We also believe that investment in evidence based health technology solutions if provided in medical colleges and hospitals, can significantly improve patient safety and health outcomes”.
Manish Sacheti, CFO, Ziqitza Healthcare, emergency medical services
The allotment of Rs 3000 crore funds under skill development is a positive move by the government since the EMS (Emergency Medical Services) industry requires a high number of skilled individuals in paramedics as they play a vital role in saving lives. There is also a huge potential for job creation in the EMS segment. The announcement by the government to provide viability gap funding for setting up PPP mode hospitals in areas like tier 2 and tier 3 cities under the Ayushman Bharat Scheme is another positive move. However, it lacks highlighting the importance and need of trauma centers at critical locations in the interiors of this country. The Finance Minister has also allocated funds for the wellness of pregnant women and one of their necessities remains access to emergency mdical services for encouraging institutional deliveries, in tier 2 and tier 3 cities. This gap can be bridged through the increase of Janani Express services in these areas.
Ram N Kumar, Founder, healthcare startup, NirogStreet
We are delighted to see that the government has laid down a lot of focus on citizen welfare in this Union Budget by making significant announcements on Health, Education, Sanitation, etc. INR 69,000 Crore has been allocated to the health sector alone. The government has committed itself to increase the wellness infrastructure of the country by implementing 1000 more hospitals under the Pradhan Mantri Jan Arogya Yojana. The Finance Minister announced that every district hospital to have medical college attached to tackle the shortage of doctors and nursing staff. Special training packages have been proposed to bridge the gaps in skill requirements.
Naveen Chava, CEO, IDSign, a Bangalore-based digital signing and verification management startup.
"With tunion budget themed around three strong aspects- Aspirational India, Economic Development and Caring Society, the Government of India has reassured its promise in promoting the Indian startup ecosystem for a vibrant and inclusive economy. The proposals aimed at bringing fundamental structural reforms and digital governance such as setting up investment advisory cell online to help young entrepreneurs with faster clearance and launch of seed fund to support early-stage startups come as a major booster for the sector. The decision to relax much-awaited Esops is a laudable move which will now help startups to attract new talent pool. Additionally, the allocation of 3000 crore for development of skill India programme testifies the government's urge to embrace the proliferation of future-readying technologies- Analytics, IoT, AI Quantum Computing and so on among rural youths to make them part of digital India. Also, the government's step to mandate aadhaar-based verification on indirect taxes would certainly widen lucrative business opportunities for companies like us operating in the area of digital signing and verification management."
Prakash Mallya, VP, and MD—Sales and Marketing Group, Intel India.
The Union Budget highlights the role technology-enabled innovation can play in leapfrogging the nation. From integration in priority sectors like agriculture and healthcare to a continued focus on smart cities, the first Budget of the new decade clearly outlines the significance of a digital-first India in realizing the country’s potential. I am especially encouraged by the efforts to use artificial intelligence (AI) and machine learning (ML) to improve disease detection and pre-emption as part of the PM Jan Arogya Yojana. Such applications of emerging technologies combined with the focus on increasing the penetration of fibre connectivity in the nation have the potential to fundamentally impact the lives of millions in the coming years.
Provisions to invest in and nurture local talent and entrepreneurship will go a long way in organizing India’s workforce and equipping them with the skills and measures needed to continue to innovate for India and for the world. Policies and investments enabling data centres and quantum computing and applications will help India spur the development of new breakthroughs across sectors.
Dharmender Kapoor, CEO & MD, Birlasoft
We laud the Budget presented by Finance Minister Nirmala Sitharaman. It has clearly recognized the importance of Talent, Technology and Entrepreneurship in the growth of the country. It is commendable to see the continuous commitment of the government to bridge the skill gap and to develop India's large talent pool, for which the govt. has allocated INR 3,000 crores towards skilling. Technology is a given and digital technology is the force driving the turmoil for this industry, whose future is yet to be unleashed. The proposal of a policy to set up data centre farms throughout the country will push more efficiency on data, as data is the new oil, but right now it is in the form of crude oil.
The budget also focused on the national mission for quantum computing and application, this will position India with globally elite countries. India would probably be the third biggest and a pioneering nation if we can break into this technology. It is also commendable to see an extra push given to the manufacturing ecosystem in the country. The budget 2020 is a step forward in achieving the nation’s goal of a $5 trillion economy.
Sanjay Katkar, Joint Managing Director and Chief Technology Officer, Quick Heal Technologies
For cyber forensics University, one major step announced by the finance minister involved the proposal for establishing a national forensic university and cyber forensic university. With cyber crimes increasing at a rapid rate, the need for cyber forensics has become more important than ever for a rapidly digitising country like India. The setting up of a cyber forensics university is a welcome move from the Government. This will definitely help in improving India’s expertise to solve complex cyber crimes.
Nikunj Ghodawat, Chief Financial Officer, CleanMax
The Union Budget 2020 has a few positive inclusions. For the renewable energy sector—the extension of the 15 percent and 22 percent tax rate to the new and existing power generation companies, which was earlier only earmarked for the manufacturing sector, is a welcome move. While the fine print is still awaited, the new personal income tax structure should help to increase liquidity at the hands of the individuals, which will have a trickle-down effect to boost demand and consumption across multiple sectors.
Kamlesh Rao, CEO, Aditya Birla Sun Life Insurance
The Finance Minister has announced a balanced budget in spite of existing challenges in hand. It has focused on the generation of employment and inclusive growth through increased expenditure on the rural economy, infrastructure, MSME and healthcare. Abolition of DDT, tax relief to the middle class and lower-middle-class segments along with simplification of the tax regime will improve public sentiment and augur well for the economy. While, the listing of LIC is a good move that will bring focus on the life insurance sector, other expectations of the sector could have been met better. The insurance industry will be watchful of the implication of the direct tax changes in the new tax regime.
Dhirendra Mahyavanshi, Co-Founder, Turtlemint
The new Budget offers tremendous tax benefits to the average taxpayer helping him lower his tax liability considerably. Moreover, with the different social welfare schemes promised by the Finance Minister, the outlook looks positive. The insurance sector is also expected to see major impacts with the disinvestment in LIC. It would bring in fresh capital for the company helping it to make strategic future plans. The emphasis on digitization, tax benefits promised to companies, MSMEs and start-ups and the lowering of the tax rates would result in higher disposable incomes in the hands of tax-payers thereby promoting insurance investment.
Pathik Shah, CEO, DB Digital, digital products startup
Promoting and building data center parks across India and improving connectivity through BharatNet seems like a great move forward - it would be great to leverage both to enable seamless interchange of data across local government bodies and also enabling access to it to private companies to build innovative applications leveraging that data—just like the data.gov initiative by the US government; and that could also help drive data localization forward—depending on the specifics. The way they should be structured should be very similar to UPI—making technology entrepreneurs from across India lead the strategy, architecture and execution of the network and making it open so anyone can plug-in—from existing tech giants to startups.
Pushkar Mukewar, Co-CEO, Drip Capital,trade factoring startup
Indian exports to China have been growing in recent years, and the country is among the top three countries India exports to. Indian exports to China grew 25.6 percent to $16.75 billion in FY 2018-19 from a year ago and were projected to grow around 4 percent for FY 2019-20. However, if the spread of the new Wuhan coronavirus 2019-nCoV forces a prolonged lockdown in China, retail consumption and raw material demand are expected to fall. Seafood exporters in Kerala are already feeling the pinch, and prices of commodities like soybean and cotton are also facing uncertainty. China is a huge driver of international trade, and an extended lockdown of the country because of the outbreak is likely to cause trouble for exporters in India and elsewhere.
Lakshna Jha, Co-founder and CEO, sRide
Presented in the Union Budget today, the government’s proposal to defer tax on ESOP along with an extension of tax benefit to 10 years is most certainly a welcome step and will be of great help for the ecosystem, especially for the early stage startups where it comes as a relief for revenue management. The removal of DDT is expected to boost investments in startups which will help in generating positive cashflow in mid-term. Finance Minister mentioning the use of technology for economic development is a clear indication of the government’s intention to boost the overall startup space.
Venkatesh Rangachari, Co-founder, GroCurv, B2B service procurement startup
Startups attract employees with the Employee Stock Option Plan (ESOP), and the ESOP tax deferment for 5 years is a positive step towards allowing early-stage start-ups to be competitive in recruiting and retaining good talent. The government’s scheme to provide subordinated debt for entrepreneurs is also another significant development and we are eagerly waiting to see the details of the proposition. Moreover, lowering income tax slabs is a good move, and will create more wealth for young hires by allowing more net income in hand.
Prashant Agarwal, President, Narayan Seva Sansthan
Budget 2020 allocation for healthcare (Rs 69,000 crores) and skill education (3,000 crore) is a good start to build the future of New India. But 2.68 crore differently-abled in India need more special attention for working on overall health and literacy standards. Corporates and rising startups need to increase the scope of CSR spending to actually bring some noticeable positive social change for differently-abled. The NGOs like us are investing in the best possible way to strengthen the support system in rural, urban and semi-urban India by running campaigns on the ground without any major financial support. It is high time to support and think more from the perspective of differently abled’s for shaping their future with mainstream society.
Rajni Thakur, Economist, RBL Bank
In the backdrop of low growth and calls for explicit stimulus to pump up the economy, the Union Budget managed to disappoint on many counts again this year. Despite multiple expenditure announcements under health, rural, education, infrastructure and other key sectors, the quantum is only marginally higher-in some cases, than previous years and hence the multiplier effect will likely remain muted as well.
Two tax regimes optionality for personal tax, as in case of corporate taxes, only makes the structure more complicated. LIC IPO and IDBI stake sale are the two big announcements that could test the markets’ appetite for government assets. 100 percent tax concession to sovereign wealth funds on investment in infrastructure projects and moving dividend tax burden to recipients indicates leaning towards attracting foreign capital in times of fiscal constraints.
Despite a negative reaction from equity markets initially, bond markets will likely react upbeat as the fiscal deficit target of 3.8 percent for current fiscal and 3.3 percent for next fiscal are broadly in line with expectations despite higher net market borrowing targets at Rs 5.36 lakh crore in FY21.
Kameswara Rao, Leader-government reforms and infrastructure revelopment, PwC India
The time-bound proposal to shift to pre-paid smart meters can truly help utilities improve cash collection as well as for consumers to get a competitive power supply. This is, eventually, a positive for generators too who currently suffer delays of 6-8 months and are sitting on the surplus capacity that could be sold if they had access to consumers. Sovereign wealth funds with presence already in India’s renewables, hydro, transmission and distribution sectors will see the 100% tax exemption on interest, dividend and capital gains as a huge positive. This, in addition to the corporate tax cut for power generators, should attract new investments, encourage early closure of inefficient plants and reduce the marginal cost of generation. The continued government focus on decentralized renewable energy, closure of inefficient plants, and a restatement of our commitment to climate change actions is encouraging.
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