Budget 2020: Sectors across industry share wishlist from tax rebates, incentives for digital payments to lowering of GST slabs

  • India needs to garner over $10 trillion to get its urban infrastructure going in the correct direction.

  • The major focus would be to increase the disposable income in the hands of individual taxpayers and push the consumption cycle

  • Amongst other things, Budget 2020 needs to bring further clarity around ETFs becoming tax-deductible under Section 80-C

The Union Budget will be presented on 1 February. The industry is expecting a slew of reliefs in the form of tax rebates, incentives for digital payments, lowering of GST slabs, among other things.

Here are the expectations from a few sectors from Nirmala Sitharaman on Saturday:

Education sector

Nitish Jain, President, SP Jain School of Global Management

For India to become a $5 trillion economy the youth have a key role to play in enabling this goal. The advantage of the youth dividend needs to be channelized and enabled to put the country on the map. Quality education is important, especially in emerging fields such as artificial intelligence, big data, virtual reality and machine learning apart from management and services in established sectors. The country needs to think long term with respect to the quality and capabilities of students and the educational service is an important stakeholder which needs to be nurtured. Employment is the key to drive talent growth. Large Free Trade Zones would need to be set up to create India’s Silicon Valley. Given our cost structure India could lead in R&D development that would complete the cycle from education to job creation.

Akhil Shahani, MD, The Shahani Group

The National Education Policy recommended that up to 20% of government expenditure should go to education by 2030. We hope this year's budget increases allocation from the current 10 percent in accordance with NEPs guidelines. In addition, the Indian education sector cannot grow rapidly with philanthropic and government funds. Other Asian countries allow private equity investment into schools and colleges, which has scaled up their education sector. The Indian government should similarly allow private companies to set up new institutions, instead of only allowing charitable trusts and societies to do so. Also, tax breaks should be given to education entrepreneurs setting up new training institutions and education technology firms with the caveat that a majority of profits are reinvested back into the company. GST on private training and coaching services should be reduced from 18% to 12 percent.

Sachin Karnik, Finance Controller, ITM Group of Institutions

Education sector is one of the most important indicators of any nation’s growth and development. Hence, the sector must be highlighted in budgetary allocation. The higher the allocation of budget, the more there is a room for improvement. The Budget 2020 should consider to raise the education expenditure nearly to 6 per cent over the next three years which is 4.6% of GDP as of now. Apart from this, improving academic facilities, creating more jobs and reducing GST rates for online education is what experts from the sector are looking forward. The vision of PM of India of making India digital and advent of digital technologies calls for government aid as they add more skills to match the digital world requirements. Also tax free education, teacher training programmes, better education policies etc. are some of the expectations from the government by the education sector for Budget 2020.

Manit Parikh, Country Head India, ELSA Corp, English Language Speech Assistant Corporation

It is reported that India has 250 million youth in the age group 13-23 out of which 90 million of them are in secondary and higher secondary schools and 140 million in colleges. This itself highlights that there is a need to make them more job ready. I hope the government announces some initiatives in this Budget to introduce English language to citizens especially those residing in Tier II, III ,IV regions and beyond. I also hope that more initiatives are proposed to create employment opportunities along with better language skills.

Sridhar Rajagopalan, Co-Founder & Chief Learning Officer, Educational Initiatives

While increased expenditure on education is always desirable, it is even more important that whatever is spent is consumed effectively. For the GDP target of $5 trillion by 2024, India will require a large number of highly skilled workforce. However, from the long term perspective, there is a need to focus on Foundation Learning to ensure every child can read well by class 2 and do all arithmetic operations by class. Furthermore, regular scientifically developed assessments both in Foundational Learning and for the higher classes, are critical to ensure students are learning well. India’s performance in international benchmarking tests like PISA (scheduled for 2021) is dependent on this.

From technology front, a lot is being done to solve education-employability issue, however, for growth in real sense, the focus should be on software including personalised adaptive learning systems that have been proven to be effective than just hardware. Finally, educational research - at all levels - is needed to develop these capabilities. These are the areas that need special emphasis and increased allotments in the budget if we are to ensure higher quality learning outcomes in our schools.

Saumil Majmudar, Co-Founder, CEO & MD, Sportz Village, amateur & school sports organisation

Sports has been an essential part of a child’s education and vital for the all-round development of children. While various government schemes constantly promote sports across schools and communities, GST rates for services that enable children to play and provide them holistic education are currently clubbed with luxury items and should undergo a much-needed revision. Moreover, in the current scenario, when there is a lack of safe play-spaces in many cities, schools are the only place where children have the opportunity to play. Therefore, tax breaks should be given to schools that give out their facilities to neighborhood communities for sports. These changes in the Budget will help develop a healthier and fitter India.

Sameer Nigam, CEO & Co-founder, Stratbean, e-learning solutions provider

We expect the government to introduce measures to provide the MSMEs sector a fair and equal opportunity to participate with large organizations. A level-playing field could be created by tax incentives.The government should also consider lowering the rate of GST on eLearning and eLearning creation software to reduce the input cost of digital transformation projects, which are a key component of industry 4.0 initiatives. This will also make E-learning and video production software more affordable to a large number of consumers and create a higher growth rate for the gig economy in this sector.

Another key step that the government can take is to allot budgets for conducting Expos and trade shows for the IT players wherein we can showcase and pitch our tech services to Indian as well as global companies.

Pankaj Chandra, Vice Chancellor, Ahmedabad University

For India to progress towards achieving higher quality employment, the government should invest more in the education sector this year. The Draft Education Policy which suggests increasing the spending on education to about 6 percent of the GDP should be a good target for this year’s Budget. It is also imperative to provide very low-interest rates on education loans to support higher levels of enrollment. The government needs to double the investment in Research and Development in the country, which is currently only 0.7 percent of the overall GDP and also encourages the private sector to invest more in R&D by providing translational incentives. Additionally, to encourage corporates to invest in training of its people which is crucial because of the changing work landscape, government should provide for tax credits for investments made in deep training of employees.

Rustom Kerawalla, Eduprenuer and Chairman, Ampersand Group

Through the Union Budget, we hope that the Finance Minister will consider two prominent modifications in 2020. The first one is to make GST applicable to school fees and other receivables of the school. In the current regime, GST credit, for the purchase of various materials and servicesis not being set off and become a cost that is passed on to the parents. By doing so, there will be less pressure on the total cost of education for the student. The second important reform is to get the 'Education and related services' classified under the definition of priority sector lending. This change will enable the much-needed access to lower interest rates, longer tenure of loans and other benefits for fueling the growth of the Education sector in India in line with Agriculture, MSME and others.

Manek Daruvala, Founder and Director, T.I.M.E.

Last year, the goal that the government has set for itself is to make our country a $5 Trillion economy in five years, by 2024. This is surely ambitious but also a much-needed directional goal. It has the potential to galvanize all our resources towards this challenging task and to revive many sectors that need a helping hand.

GDP growth is a vital input into the critical task of job creation. If India’s demographic dividend has to pay off, we will have to create adequate job opportunities for the youth. Coming to the expectations from the government, being in the education sector, I would say that the government needs to increase allocations to the maximum extent possible in all spheres of education, with a special focus on primary education. It is not just about the quantum of money deployed, it is also about how it is utilized.

 Budget 2020: Sectors across industry share wishlist from tax rebates, incentives for digital payments to lowering of GST slabs

File image of Finance Minister Nirmala Sitharaman. Reuters.

Aggressive and effective ways to improve the quality of teaching, particularly in schools, need to be formulated. Teaching, as a profession, needs to be made worthwhile for those with academic excellence. Today, unfortunately, teaching – particularly at the primary level - is often seen as a line for those who could not get into anything else. Only if the quality of teaching at the school level improves, will the students going in for higher studies have the necessary skills to meet the requirements of the industry. Towards this end, the government needs to not just invest in education itself, but create an enabling environment for the private sector. This is essential for attracting both financial capital and quality brain-power that our education sector so badly needs.

Aman Mittal, Additional Director, Lovely Professional University

The major expectation that the education sector has from the Budget is that the government will bestow more funds to strengthen higher education in India, and not just focus on skill education. Skill education is important, but at the same time, higher education needs a huge push to bring the Indian education system at par with that of the US, UK and other countries. Government has to earmark more money to provide grants to educational institutes to carry on research. Also, a separate allocation is needed to boost the start-up culture at education institutes by giving students seed money to start their own ventures. There was only a 10% increase in the budget for education last year but the way the government is aiming to strengthen the education system, a lot more money would be needed, certainly much higher than the budget that has been so far allocated by the government.

Vivek Jain, Chief Business Officer, Shiksha.com, NaukriFastForward

Education expenditure as percentage of GDP has been around 3 percent. We are hoping education expenditure around 5 percent of GDP. If the government's aim to become the education hub of the world is to be achieved, we will need more investment in education. We have seen investment in building top tier institutions like IITs, NITs, IIITs, AIIMS. Also, more seats for MBBS have been announced as well. In addition, we have seen more approvals for distance education/online courses. We look forward to specific initiatives to promote research, incentives for more collaboration between academia and industry, and investment in new-age trending technologies like Artificial Intelligence, Cloud Computing, IoT.

Ambrish Kumar, Founder logycode, digital solutions provider for logistics

The logistics sector is eagerly looking forward to the announcement of National Logistics Policy in the forthcoming budget which will be instrumental in formalizing the economic and policy regulations for the sector. The sector which is predominantly unorganized looks for correction in terms of common digital platform and single window for the stakeholder for approvals and authorizations from various govt. bodies.

The Budget should ideally address the key issues like bringing the cost down, improving the export competitiveness, single window system and improving India's ranking in the Logistics Performance Index. Besides this the Government should also develop a mechanism to promote the start-ups which are venturing into developing digital platforms for ‘ease of doing business’ in the supply chain.

Priya Krishnan, Founder & CEO, KLAY, early childhood care and education

Sharing the onus of cost of hiring women, with corporates: Time and again, studies have shown that if India consciously works towards reducing the gender gap at the workplace, this could lead to a significant gain in the GDP by at least 18% by 2025, according to a report by McKinsey Global Institute. While the Maternity Amendment Bill was well-intentioned, the cost to company attached to the six-month maternity benefit is significantly high. In an effort to effectively bring women back into the workforce, the Government could share the cost of a woman's maternity break with the organization. This can be done through a voucher system/ subsidies/ tax breaks.

GST rebates for the education sector: We are hoping that there is GST rebate or a drawback that can help providers reduce the costs, thereby making education a lot more affordable.

Increased focus on ECCE: While the new draft of the NEP does address elements of Early Childhood Care and Education, it would be good to see if there is increased emphasis and focus around the importance of ECCE and early development and its quality across all strata of society.

FMCG sector

Amrinder Singh Director, Bonn Group of Industries

Biscuits are a staple and the most basic packaged food products in India. After the implementation of GST, biscuits were put in 18 percent GST tax slab which has lead to stagnation in the growth of industry. After waiting for the government to reduce GST rate for more than a year the biscuit manufacturing companies were forced to hike the price which increased the dip in demand already prevalent due to economic slowdown. Nonetheless, GST is not solely responsible for the price hike as a periodic escalation of the price of raw materials has hit the industry hard. Reduction in GST rates in all FMCG items to a single bracket will lend policy certainty as well as manufacturing vision to the FMCG industry which will, in turn, will boost consumption and empower them to create more low skilled jobs and reduce the prices.

Logistics sector

Sachin Haritash, Founder & CEO, MavynLogistics, end-to-end supply chain solution

We would welcome FDI into logistics; the sector needs infusion of funds from foreign investors which will provide the necessary impetus.
In this budget session, we feel the government should allot legal status to documents such as Electronic Proof of Delivery (E-PODs) and Digital Proof of Delivery (D-PODs) since the business is now becoming digital. In sync with Digital India, e-bills and receipts are the next natural steps.

Kushal Nahata, CEO & Co-founder, FarEye, a SaaS-based predictive logistics platform

The existing government has always been supportive of digitalization. Having said that, it will be welcoming news if the government plans to invest more in digital infrastructure to enhance connectivity in the rural parts of the country. Connectivity is extremely important to ensure logistics visibility and mitigate transportation risks. A greater focus on mandating the digitalization of certain key accounting, billing, and logistics processes are also needed to boost compliance and tackle corruption better. Another important reason as to why this budget should focus on and invest in digital technologies is ensuring greener logistics practices. Modern logistics management tools can empower businesses to drastically reduce fuel consumption and hence shrink their carbon footprint.

We are expecting that the government will initiate further investments in the National Centers for Artificial Intelligence and AI hubs that will help the startup ecosystem garner the benefits of these technologies. Besides, we also expect the government to expedite the development process of projects like the Dedicated Freight Corridor (DFC).

Healthcare sector

Meena Ganesh, MD & CEO, Portea Medical, consumer healthcare brand

India has one of the lowest spending on healthcare globally. While it was stated that the country is set to increase the healthcare spending to 2.5 percent of the GDP by 2025, it continues to stand at 1 percent. We hope to see some action around this in the upcoming Budget. A major focus must be given to the home healthcare industry which is one of the ways to realize the government’s vision of affordable healthcare for all. However, current taxation policies and regulations do not cover home healthcare and diagnostic tests and other at-home aspects still form a large part of people’s out of pocket expenses. Home healthcare is not recognized as a mainstream sector and should be brought under the ambit of governmental schemes like the Ayushman Bharat yojna. We also expect to see an increase in the limits on reimbursement of expenses on diagnostics, preventive health check-ups, etc. and for home healthcare to be made a part of this exemption. Critical healthcare equipment such as ventilators, wheelchairs, crutches, and medical equipment spare parts should be exempted from GST. This will help make quality healthcare more accessible.

Suresh Ramu, co-Founder and CEO, Cytecare Cancer Hospitals

While the government has started initiatives related to universal healthcare coverage through Ayushman Bharat, I hope, as we head into a new decade, there is more allocated to the sector. India has one of the lowest spendings on healthcare globally and I would like to see more focus and funds put into the country's healthcare segment. It is also important to focus on the quality of clinical care and outcome, and not just the transactional cost as ultimately this is what would be beneficial to the society.

For the private sector, we need to get infrastructure status from the government for healthcare with fast-track regulatory and approvals including tax rebates, subsidies and import duty reductions where Indian products are not available in the market. The cost of providing healthcare is rising and the government needs to ensure that private healthcare is protected and supported in the country.

Prashant Tripathy, Managing Director & CEO, Max Life Insurance

Today the country is looking for a growth-oriented Budget that could infuse larger positivity into the economy. This makes the Union Budget 2020 all the more critical. With the life insurance sector being one of the major contributors to the infrastructure sector, which is a critical component of economic growth, the government should focus on unlocking the growth potential of this sector. Therefore, our expectations from the Union Budget 2020 would be to implement measures and initiatives aimed at driving the consumers to embrace life insurance.

In line with the government’s commitment towards bringing larger fiscal reforms for the common man, rationalising personal taxation will be a critical recommendation. Consideration of an enhanced window for 80C deduction from the current Rs 1.5 lakhs to Rs 3 lakhs will help bring more liquidity to the hands of the common man.

To drive greater insurance penetration, the Union Government should help build a roadmap that includes GST incentivisation, advancing tax benefits to life insurance consumers and bring greater parity in terms of benefits between life insurance products and other investment avenues. The Union Budget must prioritize reducing the current Goods & Services Tax (GST) rates of 18 percent on life insurance term policies to 5 percent with intact Cenvat Credit, to further incentivize the adoption of what is the most fundamental, cost effective, and comprehensive form of financial protection. Also, a separate deduction of Rs 1.5 lakhs should be allowed in addition to deduction prescribed under section 80C in respect of contribution made by individuals towards Life Insurance plans.

S Prakash, MD, Star Health and Allied Insurance

Any consideration on GST is what industry looks forward to in this budget. Health insurance nowadays, is considered as a necessity rather than an option. There are some products where insurance companies take more risks and come forward to cover people living with disease. In this segment there can be a better concession in GST. For senior citizens, there should be an exemption from GST atleast for products with lower Sum Insured

Although Government is enhancing the 80 D benefits periodically, the expectation from our tax payers are still high, hence further enhancement in 80 D benefits may influence health insurance penetration in a greater way. Since in health insurance cover is available these days at higher sum insured, say 50 lakhs, 1 crore etc, we can consider withdrawing the limit under Section 80 D.

Nivesh Khandelwal, CEO and Founder, CareCover, healthcare financing company

The Budget for the centre's flagship health insurance scheme Ayushman Bharat- Pradhan Mantri Jan ArogyaYojna (AB-PMJAY) was Rs 6,400 crore earmarked in Budget 2019-20. This amount is not sufficient to make this scheme a success as it would cause major delays in payments and would be un-viable for any insurance company to participate in.

The government should aim to increase the expenditure as a percentage of GDP by 0.25 basis points every year. Notably, the hospitalisation expenses are lower in certain states like Delhi and Karnataka as compared to other states. The government needs to set up a task force to assess how to bring down the cost of healthcare without penalising service providers for the same. Successful schemes like Delhi ArogyaKosh could be implemented across other states too.

There should be a separate allocation of funds for emergency healthcare, for access to quality healthcare, especially for the weaker sections of the society. Here, the Government must invite investments and support start-ups, which can help in making primary healthcare more accessible in smaller towns and villages.

Takashi Maki San, Managing Director, Sakra World Hospital

The increased spending on healthcare is a welcome step. Now, we look forward to increasing FDI and larger Public-Private Partnership (PPP) to make healthcare more accessible to everyone. The increased investments and partnerships will also bring in latest technologies, making healthcare affordable.

Suresh Ramu, co-Founder and CEO, Cytecare Cancer Hospitals

While the government has started initiatives related to universal healthcare coverage through Ayushman Bharat, I hope, as we head into a new decade, there is more allocated to the sector. India has one of the lowest spendings on healthcare globally and I would like to see more focus and funds put into the country's healthcare segment. It is also important to focus on the quality of clinical care and outcome, and not just the transactional cost as ultimately this is what would be beneficial to the society.

For the private sector, we need to get infrastructure status from the government for healthcare with fast-track regulatory and approvals including tax rebates, subsidies and import duty reductions where Indian products are not available in the market. The cost of providing healthcare is rising and the government needs to ensure that private healthcare is protected and supported in the country.

Amit Choudhary, Founder & CEO, DawaaDost, provides affordable medicines

The government had pushed for affordable and accessible healthcare in its last term, and we hope that this year’s Budget will also have some concrete action plans to realize this vision. We hope the government will simplify regulations for pharmacies buying medicines from GST paid channels. There should be 100 percent input credit for such entities and the working capital must be freed even under circumstances where the manufacturer or authorised distributor has erred on paying the deposit. The retailer has no recourse to anyone else nor the margins to absorb the entire GST as is the case today. We also hope the government will consider offering income tax breaks to affordable medicine providers like DawaaDost as this will make them more accessible to the masses.

Neha Rastogi, Founder and COO, Agatsa, world’s smallest and leadless ECG machine

India’s current healthcare infrastructure and allotted budget is not adequate to ensure universal healthcare services to all. The need of the hour therefore is to provide adequate funding and support to fuel further innovations under the Make in India and Digital India campaigns.We need more support from the government to promote indigenous innovations and provide an impetus to domestic device manufacturers. We would like to see the government procure more Indian products from the market so that our dependency on foreign imports can be brought down to a minimum. This will not only boost the Indian startup niche but also make healthcare services more affordable for the common people.

VikasBagaria, Founder, Pee Safe, sanitation and personal care brand

Our expectation from the budget 2020 centresaround government policy and regulation to enable ease of doing business through centralised policies. This will also attract more foreign investment opportunities in the segment. There is also a need to simplify the taxation process and make early stage funding easier. While the government has done well in terms of facilitating foreign investments in India, this outlook needs to be maintained going forward to effectively promote more innovations under the Make in India campaign. Even though there is immense potential, the investor confidence in the Indian femtechindustry is still considerably low–and we hope the policies to be announced in the budget ahead will be an enabler.

Sarvesh Shashi, Founder, SARVA, yoga and wellness ecosystem

Under section 80D of the Income Tax Act of 1961, taxpayers can claim tax deductions on health checkups and health premiums; preventive wellness, however, is still placed under a high tax bracket. This year, however, we hope that the Budget goes beyond providing tax deductions to those getting back to good health after falling sick but also supports and incentivise those who take care of their own fitness. This could potentially include fitness services such as memberships to gyms, fitness studios, commercially-run yoga centers, etc.

Real estate sector

Farshid Cooper, Managing Director, Spenta Corporation, Mumbai-based developer

The pre-Budget announcement of the Alternative Investment Fund to provide liquidity to stuck real estate projects will start to play out over the next couple of years. We hope that this will revive these cash strapped projects and therefore not only ensure that homebuyers finally get possession of their homes but also ensure that developers are able to recover capital that has been blocked for a long period of time. This will lead to reinvestment and subsequently growth. A reduction in GST rates for ancillary industries will further help the real estate industry in terms of lowering costs and leaving more in the hand of small to mid-size business in terms of cash flow management. Lastly, for the economy at large we hope that there is a reduction in individual tax rates. This will automatically kickstart the consumer market and have a ripple effect on job growth/job security.

Deva Jyotula, Retail Head, Kalpataru Limited

With Budget 2020 being announced tomorrow, the government is expected to come up with fresh policies and amendments to existing schemes. Post-Budget 2019 the retail sector has defiantly witnessed an upward trend. The Indian retail industry has emerged as one of the most dynamic industry due to the entry of several new players. Some major expectations by the retailers from the Budget 2020 would be: Income support schemes to boost overall consumption, tax benefits to middle class to swing consumers, reduction of corporate tax to 25 percent and GST slab to be simplified. There is a gaping need for a special startup growth fund to support startups.

Hardik Agarwal, CEO, RadhaMadhav Developers

The real estate sector in India has been scrambling for a helping hand for quite some time now. We are on the lookout for positive news with regards to the sector every budget or every time the government hints at an important announcement. What we are missing out on, however, is the rightful implementation of the existing policies and regulations, be it stronger RERA, efficient solvency courts, adequate use of funds; which would put us in a much better position. Would look forward to steps in this direction

Ankit Jain, Skootr, a co-working and managed workspace

With the GDP of India not performing as well as expected last year, Budget 2020 will be vital to attaining a $5 trillion economy by 2024-25. The real estate sector being the second-largest employer in the country today, accounts for about 10 percent contribution to the GDP. We, at Skootr look forward to a comprehensive real estate policy that would provide employment opportunities while ushering strategic investments in profitable sectors and budding start-ups to support its targeted economic growth. The ‘real estate & infrastructure’ ecosystem verily hold enough potential to drive growth in all these aspects. We expect due diligence and support from the government in potential sectors for Indian-origin companies to grow and evolve.

Vikas Jain, CEO, Labdhi Lifestyle

The real estate sector definitely needs a boost, which the Budget 2020 can provide. Residential sales of regions like Wadala, Neral, Karjat,etc. have been performing fairly, but decreased pressure on the home buyer, as well as the developer, will help in revival of the sector. Although the government took necessary steps; such as announcing Alternative Investment Fund of Rs. 25,000 crore, PMAY scheme, some repo rate cuts, etc., there is an increasing need to revise the taxation policies and allowing one-time rollover loans to solve the liquidity issue. We expect that the government will help the sector in raising funds and allocating them properly. Also, we hope Finance Minister Nirmala Sitharaman will announce measures that would help with GST and other tax benefits, which will encourage the confidence of the sector. This will impact in increased sales of residential properties.

Kishore Jain, President CREDAI, Bengaluru

Finance Minister Nirmala Sitharaman, during her first maiden budget, announced an increase of Rs3.5 lakh tax deduction cap on the interest paid on home loans approved for the acquisition of the first home purchase up to Rs 45 Lakh in the financial year. It is good that the government is promoting affordable housing to fulfil the promise of “Housing for All by 2022” under PMAY scheme. But the missing factor is the benefit for the middle-class population. The Government did not address the housing concerns of the mid-segment population apart from strengthening RERA. Therefore, developers are looking at tax and interest benefits for the mid-segment which will help in increasing the sales.

Construction material cost is directly dependent on the cost of raw materials and procurement charges. Although the government has reduced GST rates for the affordable and under-construction buildings, the materials like cement (28 percent), sanitary items (18%), steel, doors, windows, electrical continue to pose a challenge due to the high GST rates. The industry requests the government to reduce the inputs and input services tax to 5 percent– 12 percent..

Himani Narula Khanna, Pooja Grover Kapoor, Co-Founders and Directors, Continua Kids

India’s healthcare has been unique in a way that private sector contributes equal to or more than the government sector whereby the people working in the private sector, especially those who are in the startup sector look forward to government not only for directions but also help. It is not an easy task for any startup to show a turnaround more so in a brick and mortar model prevalent in healthcare.

Social enterprise

Arun Nagpal, Co-Founder & Managing Director, Mrida Group, a social enterprise working with Base of the Pyramid and underserved rural communities

There is a need for a robust mechanism that fairly and at least reasonably accurately measures the actual increase in farmer incomes and reports it in a transparent manner. In essence, there needs to be a sense of accountability towards this objective, across the board. Another core issue that needs to be addressed is not farmer incomes per se, but disparity in these incomes as well. There needs to be a visible, concerted effort at bridging the gap between the haves and the have nots, and ensuring that small and marginal farmers, who make up by far the bulk of India’s farmer base, are specifically addressed.

Using the KVK’s – KrishiVigyanKendras as a tool to reach out to the farmer to facilitate (a) knowledge dissemination and practical inputs on the ground and (b) convergence of various Central and State schemes at the last mile and the farmer’s doorstep. A well-defined, massive outreach program ensuring that a single window facility is available to the farmer at the last mile is a critical requirement. The Budget would do well to provide a specific outlay and defined objectives for such a program, targeted at creating pockets of excellence across different crops and in different parts of the country, which actually demonstrate significantly higher income enhancement than the national average - these pockets of excellence could then be horizontally deployed and scaled up quickly thereafter.

Aparajita Gogoi, Executive Director, Centre for Catalyzing Change (C3)

The gross allocations for women-specific schemes have increased over the last budget, from Rs 1.22 trillion in 2018-2019, to Rs 1.37 trillion in 2019-2020. This is a trend we expect to continue since all policymakers now agree that investing in women's health, education and welfare has direct benefits for the nation and economy as a whole. Of specific mention is the fact that allocations to women's schemes as a share of the total budget has declined from 5.5 percent in 2014-15, to 4.91 percent in 2019-20. This is something that we hope the Budget will address. The other, equally important point to keep in mind is tracking expenditure of the allocated funds across states. We look forward to this two-pronged strategy to move the needle towards achieving gender equality in India.

Technology sector

Hemant Sood, MD, Findoc Financial Services Group

We would expect that the Finance Minister in this Budget of 2020 should gift the common man and retail investor with more spending and saving power to put India back in the race of emerging as a Global Power. This would eventually lead to making the dream of $5 trillion economy a reality. Furthermore, some ways of increasing spending and cost-cutting can be done by reduction in individual taxation slabs, increase in 80 C investment limits to 2-2.5 L and thereby giving by a booster shot to commodity and equity rationalization of CTT and STT for commodity and equity markets; respectively.

Deepak Mittal, CEO & Co-founder, TO THE NEW

We eagerly await the Budget 2020 expecting the government to focus on overall economic growth and by taking measures to continue positioning India as the IT epicenter of the world. We expect new policies promoting IT innovations by pushing relevant initiatives, making innovative and bold policy interventions to propel the process of digital adoption across varied sectors.

There’s no denying that Digital innovation is an important building block for India’s future growth. Thus, nurturing new-age tech, improving the quality of talent, and enabling start-ups must be on the agenda of this government. The government can strengthen R&D by providing tax incentives to technology start-ups in the Budget to enable India to draw level with the world.

It is important to note that the amount of data being created and stored across industries continues to grow at unprecedented rates. The government, therefore, must also intervene and play a role in the protection & management of this data.

Pathik Shah, CEO of DB Digital, digital products company

We definitely hope that the government will come up with incentives to boost the Digital India program. Currently, there is a need for a much easier process when it comes to establishing a business, raising investment and eventually, collecting money from the end customers in exchange for the products, services, and content they sell.

A lot of the consumption in the new India is not just of physical goods, but also digital content. We need to also look at not only e-commerce but also specifically digital commerce. We need one click, easy micropayments available to everyone so that they can start paying as low as a rupee in a single click to buy the content they need easily. It could be integrated with the Google and Apple App Stores in India, and for those digital purchases, make them charge only a 1-2 percent fee, not the 30 percent fee they have right now for in-app digital purchases.

Rakesh Deshmukh, Co-Founder and CEO, Indus OS, a home-grown technology brand

The growth story of the Indian startup ecosystem has been outstanding in the last decade. With a record $14.5 bn funding raised in 2019 alone, the industry has played a pivotal role in the Indian economy. This Union Budget is highly important for further amplification of innovation in the sector and potential of each budding entrepreneur in the country. We are expecting a robust investment from public and private bodies, especially to help promote and strengthen emerging technologies such as artificial intelligence, machine learning, the internet of things, etc. The industry is banking on simplified regulations, market access and funding to incentivize digital technologies to bridge the infrastructural needs of the diverse audience in India.

Vasanth Kamath, CEO and Co-Founder, Smallcase Technologies, a technology platform

Amongst other things, we anticipate Budget 2020 to bring further clarity around ETFs becoming tax-deductible under Section 80-C. Increase of the maximum deductible allowance under Section 80-C from 1.5 lakhs to 2 lakhs (or even higher) is also a popular expectation that we think might play out in the upcoming Budget. Both these moves will certainly boost the capital markets in the short and long term. The rumoured removal of Long-Term Capital Gains (LTCG) tax, whether it's for a 1-year or 2-year holding period or more, will also spurn domestic and foreign investment if implemented.

Redickaa Subrammanian, Founder and CEO, Resulticks, real-time, Omnichannel Marketing solutions company

We expect the upcoming Budget to further propel this growth trajectory. As a fast growing AI and ML-based technology start-up that helps businesses catalyse growth through real time customer engagement and acquisition, we hope that the budget will introduce policies that would induce companies to adopt digitisation across all aspects. Administratively, we hope processes to get even smoother for entrepreneurs to do business and investors to invest in India.

We are entering a new era of technological disruption and expect the government to leverage this thoroughly through investments in initiatives on artificial intelligence, machine learning, blockchain and the internet of things as well as relevant skill development.We would also welcome tax reforms that stimulate consumer demand and spending as well as corporate investments.

Manjula Muthukrishnan, Managing Director, India Avalara Technologies Private Limited

Easier tax compliance process for businesses: Paying taxes includes GST return preparation, which contributes the largest share of the Ease of doing business index. In the current status, the absence of invoice standards leads to several issues. That’s why there is a need for standard e-invoice to ensure complete interoperability and elimination of the need for manual data entry and transcription errors.

Reduction in taxation: GST revenue in the country has been 40 percent lower than the previous budget estimates. The meeting of the GST Council has been ordered to collect Rs 1 lakh crore a month to meet the GST decline in the remaining four months. But there is an urgent need to reduce the heavy GST burden for certain sectors like automobile, FMCG. High GST rates on mass consumption items have hit sales. Fixing GST rates on selected items will be a welcome move.

Personal income tax: Reduction in personal income tax would provide a reasonable impetus to our economy. Reducing personal tax rates in line with the recent corporate tax cut will be a welcome move. This can help revive the economy by increasing disposable income and fuel consumerism.

CS Murali, Chairman-STEM, Society of Innovation and Development (SID), IISc

The government needs to provide a further boost to its startup policies, specifically in a couple of areas: Provide tax exemption for investments in DIPP-registered startups, this would enable capital boost for startups that desperately need cash during early days to survive. Second, to further ease out procedures not only for starting up but also to shutdown failed startups. In addition, the government can provide a direct allocation for academic incubators to provide an additional fillip to the startup ecosystem.

Manufacturing sector

Rajesh Aggarwal, Managing Director, Insecticide India Ltd

With appalling farm distress taking the sheen off the agriculture sector, there is an urgent need to improve the prices of the produce as well as the income of the farmers. Besides, as the monsoon rain becomes more and more unpredictable, the government must also make substantial provisions to improve penetration of irrigation. The need of the hour is more than farm loan waivers and that should come in the form of robust policies and substantial budgetary allocation to back them.

Rohan Sharma, Managing Director, RK Jewellers

In the past 12 months, after the government has raised the tariff on gold, since then the price of gold is escalated. We are expecting government to come up with good policies to bring stability and better phase in the jewellery industry. We feel that there is an immediate requirement to cut down custom duty to 5% and import duty charges to 2.5 percent from existing 7.5 percent. The industry is going through the roughest time now, so all industry players are keeping very high hope from our respected finance minister.

Arjun Ranga, Managing Director, Cycle Pure Agarbathies

The government should invest in rural infrastructure to give impetus to the rural markets which hold great potential. The economic infrastructure of our country also needs to be improved to make logistics and business easier within the states. Investment should be made in distribution infrastructure like a warehouse, freight corridors. As a developing nation, our primary focus should be on education and primary healthcare. We have to bring in the proper system to make it accessible to every person. There should be a reduction in income tax for the individuals which will increase the purchasing power for the public.

Shakir Ebrahim, Founder, GoBisbo Broadcasting Network Pvt. Ltd. and Creator of Bisbo

At present, with 4G bandwidth, streaming/digital media companies need to spend a lot of money on keeping local servers with ready loaded content. This is possible for big companies offering streaming services like YouTube, Netflix, Hotstaretc, but smaller companies cannot afford the infrastructural expenses. The current AGR imbroglio with the Telcos will delay the auction of 5G spectrum as they are all, barring one, scrambling for money. This delay will seriously affect Modi's "Digital India" dream and prohibit smaller players from challenging the big players with innovative content.

PC Musthafa, Co-Founder and CEO, iD Fresh Food

I would like to see a Budget that gives due importance to the organic food sector. For more Indians to go organic, it’s essential to have a dedicated budget allocation for converting conventional farmers to organic farmers. We need smart schemes that promote natural and organic farming. Once farmers see the value addition in growing organic foods, efforts to raise awareness about its myriad benefits to human and environmental health will start bearing fruit - beyond select urban pockets. It helps Indians eat healthy and stay healthy.

Similarly, the government needs to incentivise companies to embrace sustainability. One major incentive could be to waive off GST for a short period of time for products with plastic-free packaging. This will help businesses to come up with innovative solutions and alternative technologies to reduce their environmental footprint.

Boutique investment bank

Utkarsh Sinha, MD, Bexley Advisors

Clarity on Angel Tax: There is widespread hope in the tech and startup community that the dreaded Angel Tax will be put conclusively to rest, to help investor sentiments.

More Fund-of-Funds: We hope to see more dedicated fund of funds: they can serve as a boost in the arm for specific sectors we want to encourage in India, particularly manufacturing and deep-tech.

Revocation of Zero MDR: The lack of clarity around ZeroMDR is inhibiting the adoption of digital payment infrastructure in India at a time where we need to incentivize its expansion.
FIIs and FPIs are looking for clear signals of long term stability and progressive reforms in the economy. The lingering effects of GST reform and demonetization have put the brakes, and Budget 2020 has the potential to release them.

Insurance sector

Amit Gupta, CEO & Co founder, Rapyder

Hurdles in the path of MSME growth should be removed as I foresee a significant relaxation in the lending aspects for MSMEs to survive the current economic changes. Government could relax some of the compliances, which were mandatory earlier. It will also address the issue of delayed payments to MSMEs. The ecosystem of MSME lending is set to see significant transformation. Thanks to better access to authentic data from various credible sources that provide a better understanding of the nature of the specific business, its growth potential and profits. Government will become even more citizen friendly, by providing a boost in consumer confidence with lowering personal income tax in the coming budget. This inturn is expected to fuel demand of goods and services, leading to consumer-spending more for buying and consumption.

Shyamsunder Bhat, CIO, Exide Life Insurance

This year’s Budget would be challenging in the backdrop of a multi-year low for GDP growth and a multi-year high for Consumer Price Inflation which we are presently witnessing. The Budget would need to balance the high expectations that have built up over the past few months , in terms of choosing between the expected demand stimulus (infra spending) and higher spending on the rural economy on one hand, and a reduction in personal income tax-rates for the middle-income group (consumption revival) on the other hand, after the mid-year reduction in corporate taxation. The proposed methods of financing the additional spending, possibly through the tapping of foreign investors, would be watched. The targeted PSU disinvestment figures for next year, particularly the component of strategic divestment, is also important. Markets would react to the fiscal deficit numbers from two aspects: extent of slippage for this year, and the extent of deviation from the projected path for next year, by prioritising an economic recovery over fiscal consolidation with a road as a higher nominal GDP growth would help to keep the debt-to-GDP ratio in check and maintain the sovereign credit rating. Changes to taxation on Long Term Capital Gains on equities (either in terms of holding period, or by allowing indexation) and on dividend distribution, could support equity market-valuations, with a relatively limited impact on Government revenues.

Shailesh Shah, Co founder, Strta Consulting

India needs to garner over $10 trillion to get its urban infrastructure going in the correct direction. We need relevant, innovative and bold policy interventions to help make this happen. In the short term, we need to foster exports and domestic consumption while we start thinking beyond taxes the way we currently are to balance budgets. The Insolvency and Bankruptcy Code is a step in the right direction but is in its infancy in comparison to the depth and width the nation needs to resolve thousands of cases and trillions of rupees. As a nation, we need to commit to monetary policy that helps align inflation and interest rates to massive growth.

Tarun Mathur, Co-founder and CBO, Policybazaar.com

Only 8 percent of the population was covered by any form of insurance including term, health and the percentage of pure protection led insurance is abysmally low. We do not have a social security system like the one prevailing in Europe where the government takes care of all the end-to-end requirements of the citizen post-retirement. In fact, the only available instrument of social security for citizens is insurance. Thus it is important for the government to adopt a sandbox approach towards insurance in Union Budget 2020 and incentivize people to make the nation socially secure.

Infrastructure sector

Gaurav Dewan, COO and Business Head, TFS

Year 2019 was a challenging year for the travel industry, with a leading airline stopping operations. We look forward to the budget having a clear and continued focus on infrastructure development with regards to the airways, rail and highways. Moreover, favourable policies with regards to the tourism sector, given its enormous ability to generate employment and sustainable GDP growth, will go a long way to stabilise the economy and infuse cash in the system.

Utkarsh Sinha is the Managing Director of Bexley Advisors.

Personal tax

Suresh Surana, Founder, RSM India

The major focus would be to increase the disposable income in the hands of individual taxpayers and push the consumption cycle. In this backdrop, it would be fair to expect a more liberal personal tax regime particularly for lower income slabs and enhancement of savings-based tax deductions despite challenging fiscal deficit. One of the most important would be:

Slab Rates Revision and Rationalization of the maximum marginal tax rate from 42.744 percent to 35 percent

The current tax slab is quite disoriented. For instance, the base tax rate for income ranging between Rs 2.50 lakh to Rs 5 lakh is 5 percent, which directly jumps to 20% for income ranging between Rs 5,00,001 to Rs 10 lakh. It is understood that the Direct Tax Code (DTC) Task Force has recognized this issue and had recommended a revised tax slab rate structure, wherein the tax rate upto Rs. 10 lakhs would be 10 percent (with a full rebate up to Rs 5 lakhs), Rs. 10-20 lakhs would be taxable at 20 percent, Rs. 20 lakhs to Rs 2 crore would be taxable at 30 percent & income above Rs. 2 crores at 35 percent. It is expected that the tax slabs will be recast in line with the above.

In the above context and considering the skewedness in the tax structure, it is expected that Budget 2020 would revise the tax slabs as under:

Untitled

The surcharge and cess should be subsumed in the overall tax rate to avoid extremely complex fractional tax rates. Further, in case of individuals and HUFs, the levy of surcharge of 25 percent and 37 percent of the tax rates introduced in July 2019 (popularly called “super-rich tax”) resulting in personal maximum marginal rate of 42.744 percent is in sharp contrast to the overall government policy of moderate tax rates. It is expected that the maximum marginal rate may be lowered to 35 percent (including surcharge and cess).

Follow full coverage of Union Budget 2020-21 here

Updated Date: Feb 06, 2020 22:47:27 IST



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