In an unprecedented time like this, India needed an extraordinary budget to push the county’s economy on a high growth trajectory. Before the budget announcement, we expected the government to levy a COVID-19 surcharge on individual taxpayers and the higher income groups to fund the additional spending to the pandemic. It was a relief that the government refrained from imposing such taxes. On the other side, the budget has several schemes and reforms that many experts consider as a step in the right direction.
While the business world has a mixed bag of opinions, let us look at the quick reactions from the industry leaders on India’s Union Budget 2021.
Prem Kishan Dass Gupta, Chairman & Managing Director, Gateway Distriparks Ltd.
“The Union Budget 2021-22 placed key focus on healthcare, infrastructure, digital economy and job creation for the youth. The announcement of massive investment of Rs. 2000 crore on seven port projects under PPP mode will boost the logistics sector and enable overall economic growth. Under the Recycling Act, 2019, a recycling capacity of around 4.5 Miliion Light Displacement Tonne (LDT) will be doubled by 2024. This will not only benefit us as a company but also be a way of providing employment opportunities.
With road and rail connectivity being an indispensable factor of the economic development, an allocation of Rs 1,10,055 crore for Railways has been made where the eastern and western dedicated freight corridors will be commissioned by June 2022. This will help in bringing down the logistics cost as well as ensure smooth connectivity between different points of country and ensure easy and faster freight movement. The Union Budget targets 100 percent electrification of broad-gauge railways to be achieved by 2023. This will increase efficiency, and reduce dependence on conventional fuels.
The Government’s push to port, road and rail infrastructure through various investments, initiatives and projects will further add to the development of the logistics industry in India.”
Dr K K Aggarwal, President, Heart Care Foundation of India (HCFI) and Confederation of Medical Associations of Asia and Oceania (CMAAO)
“The government has announced an increase of 137% in the annual budget for healthcare. The ongoing pandemic has highlighted the necessity to invest in strengthening the healthcare system in the country. Hence, this increase in allocation for healthcare is along expected lines. However, the allocation of 35,000 crore for the vaccination is lower than what was needed and implies that the government could open up the vaccines for the private sector.
The government also needs to do a lot of work on research and development (R&D) activities. It needs to boost research in the field of genomics whether it is by the private or the public sector. This will help in early detection of new virus mutations in animals and the likelihood of cross-species transmissions, develop diagnostics and track transmission of infections. The Covid-19 virus was discovered in bats. India needs to focus on genomic studies in plants, animals, birds and humans to stay one-step ahead of any such future pandemics. India has the know-how and the capability to do so and should take a lead in this.
The government also needs to proactively research and develop vaccines for animals.
As far as primary healthcare is concerned, the government needs to experiment with low-cost technology. I have already mentioned in various videos over the last nine months as to how it is possible to develop cheaper and more beneficial cures for infections. Development of low-cost technologies and treatments to improve delivery of universal healthcare will be key to tackling major public health problems. A robust primary healthcare system will enable this. The hospitals of the future are also going to be less capital intensive as there will be a lower need for private rooms. The way ahead will be to go for IT driven general wards and not 5-star hospitals. We need technology and shared facilities which are similar to the economy travel options. Thus, by smartly utilizing the increased budget, we can create superior and more far-reaching common use healthcare facilities in the country.”
Marthesh Nagendra, Country Manager – India & SAARC, NETGEAR
“Substantial increase in health budget will ensure that India successfully beats Covid-19 and no more lockdowns which in itself is a big boost for business. The Government has also stressed upon the digital connectivity to promote digital mode of payment which is certainly a huge step for the internet companies. We at NETGEAR feel that each and every individual and organization must be equipped with tools and solutions with better internet connectivity as most of the industries would be more dependent digitally in near future.”
Shachindra Nath, Executive Chairman & Managing Director, U GRO Capital
“Broadly evaluating, the Union Budget 2021 is a significant attempt by the government, to accept a higher fiscal deficit and enhance expenditure towards economic revival. It is appreciative of the government to put a special emphasis towards providing relief to the tax payers and reducing the burden posed by COVID-19. One of the key highlights of the budget is setting-up of the development finance institution (DFI) towards infrastructure financing and institutional framework to purchase corporate bond, which would solve the issue of liquidity for the infrastructure sector and corporate bond market. Also, with the path-breaking initiative of instituting Asset Reconstruction Company (ARC) and asset management company (AMC) for NPA consolidation, banks have been allowed to streamline their focus on the much needed growth.
The government has reduced the threshold for NBFCs to initiate recovery under the SARFAESI Act, 2002. This is an effective step towards ushering credit discipline and in the long-term will increase the penetration of credit to small businesses. The government has also doubled its allocation towards MSMEs, which would greatly support their revival and the eventual growth. Holistically, the Union Budget 2021 is an encouraging event, yet we optimistically look forward to a distinctive support for NBFCs, with a framework to provide them sufficient liquidity, while also furthering the credit guarantee scheme support to the MSMEs.”
Agnelo Joseph, Co-founder, Tattva Academy and Business Consulting
“The Budget 2021 -22 has been built to boost Infra works thereby leading to employment opportunity and economic growth through atmabnirbhar. Some positives are focus on infra and health care and direct taxes benefits and affordable housing boost is a positive readiness upswing plan. This can lead to more investment internally, boosting Infra will lead to skill up focus for employable skills which can be gauged from the fact that MSME outlay given for 15000 cr for this sector. Skilling focused around NAP scheme is seeing around 3000 cr investment focus which is seen as boost for skilling opportunities for edutech and startup firms in this space to specialize with tax holidays offered
Overall positive push for infra, health sectors that will lead to growth but the challenge will remain if the ground level quick ease of process for implementation will be vital. Hope the Migrant worker benefit plan will see movement for positive labor surplus for infra projects”.
Sumana Iyengar, CEO and Co-founder, Goavega Software India Pvt Ltd
“The budget announced was an encouraging one for the entrepreneurial and start-up ecosystem of India, with the tax holidays extended for one more year. Although nothing was directly mentioned about the IT and emerging technology sector, the adoption of major tech enabled services directly by the government, is in itself a good motivator! From announcing a ‘digital’ budget on a tablet, to announcement of e-governance, e-surveillance and e-filing of documentation around taxes and company establishments, the public sector efforts are notable and are set to transform the private sector enterprises to adopt technology. The access to internet in Indian languages is another major boost to enhancing digital inclusivity, followed by the setting up of the Fintech parks to drive digital economy, are all positive and commendable steps to enhance technology adoption across sectors, giving tech start-ups and SMEs/ MSME’s a boost. The changes recommended in the companies act, specially promoting one person company (OPC), is also a commendable step as it will now allow individual entrepreneurs to leverage tax and other benefits. The rise in MSME allocation and Government support of INR 15,700 crore in FY22 for the sector, enhanced provisions for private investors and NRI to pump FDI, along with a thrust on ease of doing business, are other encouraging announcements. All of these translate into a pro-growth and pro-small business budget with adequate financial and policy support, which are in line with the previously announced relief packages set to help the sector tide over the COVID 19 slump.”
Bala Parthasarathy, Co-founder and CEO, MoneyTap
“Union Finance Minister Nirmala Sitharaman presented Budget 2021 in the Parliament. Since we have seen that India is one of the fastest-growing Fintech Markets in the world. We have no doubt that the government’s support in creating and promoting a world-class Fintech hub at GIFT City will draw everyone’s attention, and can soon become the cradle of developing Fintech companies. We do see enormous growth not only in that region but also in creating jobs, drawing more people to work in Fintech. The exposure can bring in more innovation, technical know-how, help companies thrive in a joint collaboration set up, attract many incubators, investors, accelerators, help in creating an ecosystem for growth.
Regarding the Government’s Rs. 1500 crore influx to support digital payments, we all know that The Digital India Program is a flagship program by the Government of India. MoneyTap has also mirrored this goal in its aim to make more Indians digitally empowered, be able to use financial apps in better ways, improve knowledge and create apps that are easy to use, flexible, and can make people’s lives more secure. So, we are hopeful that any influx like this will help people get more convenience and accessibility to financial payments online.”
Arvind Goenka, Chairman, The Plastics Export Promotion Council (PLEXCONCIL)
“Hon. Union Finance Minister (FM) presented a progressive and transparent Budget to stimulate growth in the economy after a global pandemic. FM stated that our manufacturing sector has to grow in double digits on a sustained basis to achieve a USD 5 trillion economy. Government has to encourage plastics’ manufacturing companies need to become an integral part of global supply chains, possess core competence and cutting-edge technology. But PLEXCONCIL has been seeking the inclusion of plastics under the PLI Scheme. We welcome the review of 400 existing custom exemptions this year. PLEXCONCIL requests for reduction in customs duty on Plastic raw materials. Naphtha custom duty lowered will help production of plastic raw materials. Finished goods of plastics should have attracted higher duties. We welcome the announcement to review inverted duty structure under GST. But there is no allocation for MEIS shipments made for 2019-20 and 2020-21 – we seek clarity on the same. Government’s focus on providing alternative discoms and reduction in cross subsidy shall help industrial consumers. MSMEs in the plastics industry will benefit from Collateral free loans for businesses. Increased outlay for road and rail infrastructure shall help logistics movement within the country/ICD.”
Vikas Bagaria, Founder, Pee Safe
“As announced by the Finance Minister, the focus of the government is on improving preventive healthcare, environment and hygiene, and this is a great development. Hygiene has become a key need in the wake of the COVID-19 pandemic, and we have seen how various aspects of personal and community hygiene and sanitation have significantly aided in the battle against the contagion. Now, the government’s emphasis will further bolster our efforts and lead to greater innovation in the personal hygiene arena. There is a lot of fund allocation towards waste disposal and reduction of plastic consumption which is in line with efforts by companies like Pee Safe. We have been working towards reducing usage of plastics and integration of sustainable raw materials in our products such as biodegradable sanitary pads etc. The government’s plans to simplify various operational processes will also work towards improving the ease of business and we are looking forward to contributing towards improvement of hygiene and sanitization in our society through our innovative products.”
Harshit Jain, MD, CEO and Founder, Doceree
“This year’s budget by Hon’ble Finance Minister is pragmatic, positive and committed to the healthcare sector which needed a deliberate boost post unprecedented virus outbreak last year. The announcement of centrally funded scheme – Aatmanirbhar Health Yojana – with an outlay of Rs 64,180 crore over six years in addition to National Health Mission is a welcome step towards strengthening primary, secondary and tertiary healthcare in the country. Setting up of 15 Health Emergency Centres shows the government’s intent to be future-ready to address any healthcare crises. It is commendable that the government has put healthcare on the forefront, putting focus on curative and preventive health and wellbeing. The allocation this year is likely to be around Rs 2,23,846 crore which is a whopping over 130% rise from the budget last year. The proposals would make quality healthcare accessible and affordable, besides standardizing healthcare infrastructure across the country.”
Suman Gandham, Founder, Finin
“It is a big leap ahead with the FM going digital (paperless this year). The proposal to use data analytics, artificial intelligence, machine learning to make regulatory filings more frictionless for businesses and startups is a step up as MCA-21 shares crucial information to various stakeholders such as the regulators, investors and companies. All filings under the company’s law are submitted to the ministry through this portal. This is very much in sync with the voice of Finin as India’s first neobank that employs AI and ML for various financial recommendations. The earmarking of Rs 1,500 crore for promoting a digital mode of payments is also a positive move and step ahead for the Fintech industry. It is also fascinating to see the facilitation of a Fintech hub at GIFT city, opening up more avenues for Fintech hubs to go PAN India from an administrative standpoint.
It is also interesting to note the efforts taken towards doubling the allocations with the Government setting aside Rs 15,700 crore in FY22 and the revision of definition under Companies Act, 2013 for small companies by increasing their threshold for capitalization. The Budget also proposed to reduce the margin money requirement from 25% to 15% for startups and an extension of the tax holiday for startups by a year which comes as a relief.”
Varun Babbar, Managing Director, Qlik India
“The Union Budget 2021 is truly a balanced and reformative framework that looks forward to bolstering an economy towards faster recovery and growth which was otherwise ravaged by the pandemic. We appreciate the government’s vision of an “Atma-Nirbhar Bharat” by providing economic assistance through tax reliefs, incentives and new policies. Continued support in areas like education and technology as well as providing breathing room for startups through initiatives like providing tax relief for one more year will help to kickstart a resilient economy for all industries. The government’s allocation of Rs. 1500 crores towards promoting digital modes of payment will also boost India’s digital payment infrastructure. Aligning with our focus to provide active intelligence and real-time analytics, the government’s allocation for infusion of Rs. 20,000 crores will help to reform the country’s surge in digital payments for the post-pandemic future”.
Prof (Dr.) Sanjiv Marwah, Director, JK Business School
“The budget presented by the honorable Finance Minister tried to address many facets of the educational sector. The overall allocation of Rs. 93224 Cr for the education sector is a welcoming announcement. The budget emphasized the recent trend of tinkering at the edges of the problems that confront Indian Education System. Madam Finance Minister announced strengthening of more than 15,000 schools, starting 750 Eklavya schools and 100 new Sainik schools which will have a great impact on the school education. On the other hand, Legislation of the Higher Education Commission of India will resolve the various challenges faced by higher education in our country. The budget consists of the apt strategies which will help in speedy implementation of National Education Policy (NEP).
Another point which deserves huge appreciation in the budget is the development of the National Research Foundation, which outlayed Rs.50,000 Cr over 5 years. It will strengthen the overall research ecosystem of the country and help India emerge as the R&D epicenter of the world.”
Meena Ganesh, MD & CEO, Portea Medical
We commend the Finance Minister on addressing various concerns of the healthcare industry and the needs of post-pandemic India. The healthcare budget has been increased to rupees 2.3 lakh crores which is a much-needed step given how the Indian healthcare infrastructure has been reeling under the pandemic impact and the expenditure on healthcare has so far been grossly inadequate. As a boost to the ongoing battle against COVID-19, the government has made a provision of INR 35,000 crore for COVID-19 vaccination in the FY 2022 which is a laudable step. We have seen last year how the integration of private and public sector healthcare operations and collaborative model of healthcare delivery led to rapid scaling of the efforts. We are keenly looking at furthering such collaborations going forward. Another key highlight of the announcements is the intent to shift the focus from a curative to a preventive healthcare ecosystem with strong focus on development of the diagnostic, research and development sector as well as on boosting the emergency healthcare system. A large number of new integrated labs, primary health centers, hospitals and other medical facilities have been announced. We hope that various digital technology driven services such as home healthcare and telemedicine are also given adequate support and focus under the National Digital Health Mission. Overall, the provisions seem to be quite promising and we are ready to support the government in executing the plans related to healthcare transformation across India!”
Shilpa Ambre, CFO, SARVA
“As a startup in the wellness segment, there is a lot in this budget that gives me joy. To begin with, the government’s plan to focus on preventive healthcare is the need of the hour. India is a country with incredible burden of chronic lifestyle diseases as well as other health challenges which arise out of a weak immunity in most people. If we can develop a holistic wellness system wherein practices such as yoga are integrated to keep people naturally fit and healthy then it augurs well for all the stakeholders. SARVA has been dedicatedly moving forward in this direction and as a startup, we welcome the government’s decision to extend the tax holiday as well as the capital gain exemptions. These are crucial for receiving funding and improving the financial health of Indian startups. The simplification of processes is also going to improve the ease of doing business. Startups can now look forward to focusing more on development of their services and reaching out to the target audience in a better way. It is a great and growth oriented budget.”
Neha Bagaria, Founder, CEO, JobsForHer
“The government’s emphasis on creating an Atma Nirbhar Bharat is synonymous with ensuring that our women are also atma nirbhar, which can only come with their financial independence. It is thus a welcome change that women will be allowed to work in all categories with adequate protection, a move which will open up further job opportunities for women, thus enabling higher financial security.
Additionally, we had highlighted the need to ensure that gig workers, a huge proportion of whom are women, need to be provided with adequate benefits. It is thus heartening to see that Social Security benefits will now be extended to gig and platform workers for the first time”.
Shumita Kakkar, Founder, United We Care
In the wake of the COVID-19 pandemic, the Union Budget 2021 has been the most eagerly anticipated reform and the government has taken a step in the right direction by focusing on preventive and holistic wellness. We saw how the pandemic outbreak has not only impacted the financial and physical health of our public, but also led to stress and mental health issues due to the sudden and drastic changes in lifestyle and a revamp of established norms. There is a need to address this issue. We hoped to see more impetus or announcements around addressing mental health issues.
Technology is going to play a major role in creating the desired support system for the people. In this regard, we anticipate the government to promote platforms like ours and adopt a collaborative approach to incentivize usage of such services by the public. Since, UWC is a startup, the extension of initial tax benefits and capital gain exemption on funding will go a long way in boosting the morale of our company as well as thousands of other startups all over India.
Meghna Suryakumar, Co-Founder & CEO, Crediwatch
“The proposed plans to spend on infrastructure is fundamentally sound. Over time this will bring down the cost of business and value creation. The huge increase in the overall capital expenditure budget should augur well for mid to long-term growth. Rationalisation of some of the customs duties should aid sustaining these sectors as well as incentivising offshore manufacturers to set up base in India. Production linked incentive (PLI) schemes will also aid the growth of MSMEs. Overall, this appears to be a growth-oriented budget that should hopefully enable and empower small and medium businesses as much as the rest of the Indian economy.”
Vishnu Saraf, Co-founder and CEO, Possible
“Overall, the budget is quite positive. 33% increase in capex to Rs 5.5 lakh crore will boost demand. Also, Rs 64,000 crores Atma Nirbhar Health Program is a good initiative. It’s also good to see no new taxes, especially when the fiscal deficit is so high. Allowing one person company will also help entrepreneurs to start a new company.”
Nityanand Sharma, Co-Founder & CEO, Simpl
‘’Budget 2021 is a Budget of hope towards realizing India’s growth aspirations, strengthening the start-up ecosystem and boosting the digital-first economy. We believe Budget 2021 aligns to the urgent need of the hour to shift focus from survival to revival of economic growth. ‘’
The following key Budget provisions will benefit the start-ups, fintech and digital payments space:
– Recognizing the crucial role of fintech and the huge jump in digital transactions, the FM has allocated INR 1500 cr towards financial incentives to promote digital payment modes.
– Start-ups are innovation hubs. To further encourage the start-up ecosystem to thrive, the Budget has extended the eligibility for claiming tax holiday for start-ups till 31st March, 2022.
– Additionally, to ensure access to funds, the capital gains exemption for investment in start-ups has been extended till 31st March, 2022.
– To ease the process of setting up of start-ups, the Budget incentivizes the incorporation of One Person Companies (OPCs). This would encourage entrepreneurs to grow as OPCs, without any restrictions on paid-up capital and turnover, with the flexibility to convert into any other type of company at any point of time.”
Ankit Gera, Co-founder, Junio
“The Finance Minister and the Government of India have been very supportive in promoting digital payments, which is reflected in the budget speech today. While India has been one of the fastest-growing fintech markets globally, it is also important to note that the digital mode of payments has also emerged as one of the most transparent and trustworthy methods to track payment/credit repayment compliance. This can be reflected even in the budget announcement today wherein the Finance Minister, Nirmala Sitharaman proposed to increase the limit for tax audit for persons who are undertaking 95% of their transactions digitally from 5 crores to 10 crores. Another encouraging factor has been 1,500 crores investment for a proposed scheme that will provide financial incentives to promote digital modes payment. This will further strengthen the buyer and provider market sentiment, and we are optimistic that a lot of market consolidation will happen this year. Also, the extension of tax holidays for start-ups and capital gains will also spark greater capital activity in the investment landscape and serve as an enabler of robust early-stage venture funding for start-ups.”
Atul Rai, CEO, Staqu
“In the Union Budget 2021, FM Nirmala Sitharaman made several encouraging announcements when it comes to India’s technology sector as well as the startup ecosystem. It was announced that cutting-edge tech including data analytics, AI, ML, and MCA-21 version 3.0 will be launched to have additional modules for e-adjudication, consultation, and compliance management and monitoring. This, along with the proposed extension of tax holiday for start-ups by one more year, will enhance ease of doing business and encourage the next generation of tech companies to step up and carry the mantle of development towards a digital-first future in line with the PM’s Digital India mission. The Finance Minister also proposed to revise the definition of small companies under Companies Act, 2013 by increasing their threshold for capitalization to not exceeding INR 2 crore from the current INR 50 lakh and turnover to not exceeding INR 20 crore from the current INR 2 crore. With this step, the Government aims to benefit about two lakh companies.
We further welcome the FM’s plans to incentivize incorporation of one-person companies (OPCs). Besides allowing a company to convert into any other type at any time, the Government has reduced the residency limit for an Indian citizen to set up one person company from 182 to 120 days while allowing NRIs to establish OPCs in India. This move will provide a big boost to startups and innovators by enabling them to grow without regulatory restriction on paid up capital and turnover, thereby bolstering the startup ecosystem and the economy at large.”
Nilesh Aggarwal, Director & CEO, Medtalks.in
“This has been one of the most anticipated budgets for the healthcare sector as we have been regrouping after the biggest medical catastrophe of our lives until now. The government has made the right noises as far as the budget allocation for the healthcare sector and taking the measures related to infrastructure and capacity development is concerned. As is the need of the hour, there is focus on empowering the existing healthcare sector and building a robust research, development and preventive healthcare infrastructure. It is really heartening to see e-consultations figure in the Finance Minister’s plans, but, what we really need to see is how the integration is going to take place. In the wake of the COVID-19 pandemic outbreak, we have seen the impact made by the innovative healthcare delivery practices such as telemedicine and e-diagnostics. To prepare the existing healthcare workforce and also to meet the requirement of human resources to man the proposed healthcare facilities, it is imperative that a significant attention is given to training, re-skilling and knowledge upgrade of the healthcare professionals through digital mediums. We are looking forward to the government taking the highly successful public-private collaboration to cater to this need. While the finer details of the budget are yet to come, the announcements are definitely heartening.”
Tarun Mehta, Co-Founder & CEO, Ather Energy
“The introduction of several progressive policies and incentives by the Government like the FAME 2 subsidy and offering income tax rebates on the purchase has led to an increase in consumer demand for electric vehicles in India. We are also witnessing the growth of the EV Industry in terms of companies launching high-quality and well performing new products in the market.
For manufacturers, one of the key challenges on investments in the sector is the concerns regarding GST inverted duty structure. In order to minimise working capital blockage, the Government should look at extending end use based benefits to the EV industry like lowering GST rates on raw materials, allowing inverted duty refunds for research and development and capital expenditure. Especially for startup’s like ours in their growth phase, offsetting inputs on such major expenses without being GST profitable is a big challenge.
We also see a need for banking institutions to come up with innovative financial products for EV purchases. Further startup’s in their growth phase suffer from lack of options on debt financing thereby increasing finance cost burden.
From an operational perspective, we are closely following the Production-linked incentive (PLI) scheme and we look forward to more progressive schemes designed for OEMs”
Abhijeet Pai, Partner at 9Unicorns
“The Budget 2021 is special since it focuses on creating avenues for both Make in India and Innovate in India initiatives. The Finance Minister’s announcements and proposals are well in line with the Government’s vision to make India the leading startup destination globally. The Government’s decision to invest heavily in futuristic technologies such as AI/Robotics and Automation in various sectors right, from healthcare, infrastructure, finance, and manufacturing, would undoubtedly boost the existing startups and lead to innovative startups entering the ecosystem. The decision to use new-age technologies such as data analytics and machine learning in the roll-out of the new MCA website and announcement to allow the formation of a one-man-company suggests that the Government is on the right step to make India a truly digital economy. These initiatives’ could create a huge impact and bring more opportunities for startups to step up and resolve gaps in the ecosystem. ”
Mohit Dubey, Co-Founder and CEO, Chalo.com
“The latest budget has clearly laid a strong focus on public transportation. It was heartening to see the INR 18,000 crore commitment by the government towards Bus services. While buses are already the largest form of organized commute in India – we still have less than 3 buses per 10,000 people. We need to grow this to at least 10 over the next few years and this is a great start.
Equally important is the announcement to add 20,000 city buses through the PPP model. India had thousands of operators with decades of experience in running buses. And now, we also have promising start-ups who have built technology for making the bus experience reliable and safe through live tracking and digital ticketing. Overall, this is a fantastic start – with this we have taken a crucial step towards easing congestion, reducing pollution and making our cities more liveable.”
Akash Gehani, Co-Founder & COO, Instamojo
“The announcements made by the Finance Minister towards the further development of digital payments in India, as part of the Union Budget 2021 are indeed positive. In fact, the allocation of Rs.1500 crore for digital payments is a welcome move, but it is too early to comment on the same. What we should be looking forward to is the implementation of the same. While the funds have been announced it is still unclear how these budgets allocation is going to be used for the benefit.”
Anil Kumar N.S., Co-Founder and MD of Aeldra Financial
“It is heartening to see some of the budget announcements like Fintech-hub at GIFT city and 1500Cr push for digital payments that show the Government’s acknowledgement of fintech being the flagship of the startup ecosystem in India. Fintech is and will be one of the fastest growing sector in India at almost 23% CAGR over next 5 years and will be a major driver of growth as well to generate the 90 Million jobs required in India over the next 5-10 years (as per a recent McKinsey Survey). With the revival in consumer sentiment, spending and investments, we see an uptick in hiring ourselves and faster roll-out of our innovative products. We clearly expected more push towards adoption of technology in banking and more allocation towards innovations in fintech. Easing of regulatory clearances for cross-border inflows and outflows of funds and rationalization of FEMA will help accelerate further growth.”
Puneet Singh, Filmmaker & Co-founder, Clapstem Entertainment
“Backed by largest cinema hubs in the world and passionate cinema goers, Indian Film industry is a multi-billion-rupee industry. With the onset of the coronavirus (COVID-19) pandemic, though it has impacted the Indian Film Industry in terms of conducting shoots, releasing in theatres etc, a positive has been that fact that the film releases have moved to the virtual world, making a mark into an already booming streaming market. Despite this, the fact remains that Indian Film Industry has been hit badly due to pandemic and survival has become challenging for the entertainment industry. Indian Film Industry has had immense contribution to the growing Indian economy and creates a direct impact in adding total revenue of the combined industry 199 crs ($ 2. 73 ) in FY 20 as per reports as a total media and entertainment (M&E) industry revenue. Apart from creating a direct revenue impact, Indian Film Industry also contributes significantly to social, cultural, political transformative changes. Look at the employment we create and add value to the hospitality and tourism industry too. From Budget perspective, I am hoping that this budget of 2021/ 22 has more policy reforms to bring down the GST tax slab, induce grants and subsidies, apart from providing more flexibility in operations and creating better infrastructure for the industry. The budget should also address policies for safeguarding the theatre infrastructure and the major loss that the entertainment has suffered due to the Pandemic.”
Rajit Bhattacharya, CEO, Data Sutram
“We welcome this budget as it steers growth in the right direction. Extension of tax holiday by one year is a great move that will give startups more time to evaluate and fix things, owing to the pandemic-related challenges. We are also happy to see the government’s increased focus on technology by leveraging data analytics, AI, ML to revamp MCA-21 portal. This will ensure seamless compliance across businesses of all sizes. With the integration of these advancements, we can expect the MCA-21 3.0 to be equipped with new features like a single source of truth, ease of doing business, e-adjudication, online compliance monitoring, to name a few. Incorporation of one-person companies to incentivize innovation is another ground-breaking move for startups and will help them grow without any restrictions, mainly on paid-up capital and turnover. The technology-driven moves taken by the government will also help streamline India’s healthcare and pharma industry while widening the avenues for recruitment across the startup ecosystem in India.”
Anuj Golecha, Co-founder, Venture Catalysts
“The Budget 2021 is considered the most significant event as it coincides with the ongoing Covid-19 pandemic. While the specific announcements for startups were limited, startups should benefit from the waterfall impact of the larger economic decisions and budgetary allocations.
For example, the massive allocation towards healthcare and infrastructure and logistics would help boost these segments’ startups and create enormous employment opportunities in markets beyond the metros. We also expect more innovative startups to emerge this year.
The fine print of the budget also indicates that a lot of administrative tax and regulatory legislations have been proposed that would impact the functioning of startups such as creating a one-person-company, relaxations on the tax audit and Small Company regulations. These further ease the compliance burden for startups. The extension for tax holidays and capital gains benefit was warranted and has come through.
The overall emphasis on further strengthening the digital ecosystem with a focus on artificial intelligence, data analytics would further deepen the country’s digital payment ecosystem, which we feel is quite a plus for the FinTechs. Besides, the Government’s announcement to creating a FinTech Hub in Gift City, allocation of Rs 1500 crore for promotion of digital payments, and incentives to MSMEs who carry out 95% transactions digitally are likely to benefit the FinTech ecosystem. The furtherance of financial institutions in the form on AIF’s would also increase domestic and global institutional participation in the startup investment asset class.”
Pranjal Kamra, CEO, Finology
“One of the significant moves was increasing the FDI limit on the insurance sector to 74% from the existing ceiling of 49%. This move may result in rising competition in the sector but it will support the insurance industry growth and help in improving the insurance penetration in the country. Currently, the insurance penetration in India is only 3.76% as compared to the global average of ~7%. The proposal to enhance the threshold limit for classification of small companies will surely benefit many corporates by giving them the advantage of operating with lower compliance costs. Further, the plan to integrate various securities laws into a single umbrella law would further give a boost to ease of doing business and reduce legal costs.”
Jyoti Roy, DVP – Equity Strategist, Angel Broking Ltd.
“The Union Budget 2021-22 surprised all market participants as there was significant boost provided to Government spending despite the shortfall in tax collections. Overall Government spending for FY2021 has been revised to 34.5 lakh cr. as against Budget estimates of Rs. 30.4 lakh Cr. despite a significant shortfall in tax collections for the year. revenue receipts for the year have been revised to Rs. 15.5 lakh Cr against budget estimates of Rs. 20.2 Lakh cr. Disinvestment proceeds too have been revised sharply down to Rs. 32000 crore from Rs. 2.1 Lakh cr. As a result, the fiscal deficit has been pegged at 9.5% for FY21. The fiscal deficit for FY21 is well above consensus estimates of ~7% as the Government is actually looking to spend more than budgeted despite a shortfall in tax collections. Personal and corporate tax rates have largely been left untouched and the Agriculture cess too has been implemented in a very non disruptive way. Gross borrowing figure at 12.7 Lakh cr is also not significantly higher than revised figure of Rs. 12 lakh cr which will ensure that G Sec yield does not move significantly higher. Overall the Budget is slightly negative for the bond market though it is positive for equities.”
Ashwani Rawat & Amarsh Chaturvedi, Co-Founder & Director, Transerve
“The Union Budget 2021 can be rightly considered as path breaking as it was the ground-level of the country and not just sector specific. The budget laid much-needed importance to the country’s healthcare system considering the recent and ongoing Covid pandemic by allocating Rs 64,180 crore for Atmanirbhar Swasthya Yojana, thus strengthening healthcare in India. We also appreciate an outlay of Rs 1.41 lakh for Urban Swachh Bharat 2.0 Mission, Rs 2.87 lakh crore for Jal Jeevan Mission Urban, Rs 1.41 lakh crore for Urban Clean India Mission and announcement of 5 new Smart Cities under PPP mode in collaboration with states, to reinforce the Urban India. Technology being the core suite to build on a successful business ecosystem, we welcome allocation of Rs 8,000 crore for National Mission on Quantum Computing & technology and building data centre parks. The honourable Finance Minister has left no stones unturned to give a boost to new age technology like AI, ML and Data Analytics across sectors with the launch of MCA Version 3.0 which shall target simplification of E-Scrutiny, E-Adjudication and Compliance management.”
Harshil Mathur, CEO & Co-founder of Razorpay
“2020 saw an 80% increase in digital payments, especially from Tier 2 & 3 cities, and the Gov. has understandably focussed on capitalising on this momentum and incentivising the adoption of digital payments for the year ahead. I believe the 1500 Cr. incentive announced will open a plethora of opportunities for Fintechs to innovate for the new normal, leading to large scale adoption even in the smallest of towns and villages. I’m hoping the funds will be used towards developing alternatives to Zero MDR policy and initiatives towards bringing digital financial literacy in vernacular languages. These will instil trust in the system and accelerate adoption from MSMEs and entrepreneurs who are apprehensive towards moving money digitally.”
Fintech in India has grown more in the last ten months than in the last two years, thanks to young Startups who’ve built tailored solutions and addressed markets never served before. And so, easing the norms around setting up of One-Person Companies (OPC), without any restrictions on paid-up capital and turnover, is a good step towards removing barriers to innovation amongst startups. Also, the 1-year extension towards capital gains exemption will provide additional tax relief for startups, enabling ease-of-doing-business in this new order and allowing small businesses to prosper.”
Krishna Kumar, Founder and CEO, Simplilearn
“Post 2020, we have witnessed the role of technology taking center stage, opening new job opportunities and increasing the demand for a technically skilled workforce. The government’s decision of introducing post-education apprenticeship with an investment of over Rs.3,000 crore towards the skilling of engineering graduates, diploma holders, etc. is definitely a forward-looking proposition aligned with improving employment opportunities for students pursuing different disciplines. However, it would have been encouraging if the government had introduced a reduction on GST for online education services, with learners and teachers alike taking to online skilling programs in view of the demands of the “New Normal”. Another highlight of the Union Budget 2021 is the extension of social security benefits for gig employees. COVID-19 accelerated the growth of India’s gig economy, giving rise to a new genre of employment and employees. All the initiatives announced by the Government of India today, are signs of building a new India for the generations to follow.”
Prateek Shukla, CEO and Co-founder of Masai School
“With rapid digitization and online learning defining the days ahead, technology is set to be the prime job creator. The Union Budget 2021 has introduced useful propositions in line with enabling a technically skilled future workforce. The government’s investment towards a robust framework which includes the skilling and upskilling of engineering graduates, diploma holders, and an enhanced focus towards technical skilling of non-science students will aid in paving the path in creating a job-ready workforce in the “New Normal”. However, it would have been advantageous if the Government introduced amendments with regards to the GST cut from 18% to 5% for edtech products, benefitting both learners and edtech companies.”
Natarajan, SVP- Head of Finance & Accounts, JK Technosoft
“The Union Budget 2021-22 is applaudable at various levels. While as expected by many there were no exemptions in the tax slab, but providing exemption to the elderly for filing the return is a great action to reduce the compliance burden for the senior citizens. We also appreciate the Finance Minister’s decision to constitute a Dispute Resolution Committee to ensure efficiency, transparency and accountability under which anyone with a taxable income up to `50 lakh and disputed income up to `10 lakh shall be eligible to approach the committee for resolving disputes. We commend the Government’s decision to smoothen the GST structure to remove anomalies such as the inverted duty structure. Further, digitization of GST by deploying deep analytics and Artificial Intelligence to identify tax evaders and fake billers and launch of special drives against them is a praiseworthy action. We also appreciate the Government’s focus on new-age technology like Data Analytics, Artificial Intelligence (AI) and Machine Learning under which it will launch MCA21 Version 3.0 involving additional modules for e-Scrutiny, e-Adjudication, e-Consultation and Compliance Management.”
Sangeet Kumar, CEO & Co-Founder, Addverb Technologies
“Budget 2021 focuses on enhancing productivity by incentivising the use of technology to make India ‘Atmanirbhar’ and future-ready. As the future of manufacturing is driven with robotics and other automation technologies, we appreciate the announcement of PLI schemes to create manufacturing global champions under AtmaNirbhar Bharat for 13 sectors related to electronic manufacturing. The Government also announced to extensively use data analytics, artificial intelligence & machine learning for the roll out of MCA21 portal version 3.0. This version 3.0 will have additional modules for e-scrutiny, e-Adjudication, e-Consultation and compliance Management. Also, as upskilling programs are required to make the workforce ready to work with robots and other automation, the budget played a lot of attention to machine learning driven programmes and setting up of data centre parks to promote R&D. We highly appreciate the proposal of extending the tax holiday for start-ups for one more year and Tax relief for startup employees on deferment of tax payment on ESOPs by 5 years.”
Rohit Garg, Co-Founder & CEO, SmartCoin
“The recent announcement has given a push to the Sensex going above 750 points, as this was evident by Nifty being up by 3.3% as soon as the budget speech was over. They are incentivizing the digital payment with Rs. 1500 Cr. boost will accelerate the adoption and help in building financial inclusion. The development of World-class fintech hub will attract more international investors to invest in India. As proposed, the budget announcement brings in the minimum loan size eligible for debt recovery under SARFAESI Act 2002 which reduced from ₹ 50 lakh to ₹ 20 lakh; which will help an NBFC to become eligible to be recovered by another under the Act. The special attention has been given towards the unskilled labour, gig workers and migrant labourers to streamline the benefits offered to them which will push to bring them under financial ambit and accordingly will help in formulating schemes like Health, insurance housing, credit & food, for their wellbeing. With this, we are extremely excited and looking forward to build more custom made products for this segment. To promote investments and funding in Indian startups, the extension in claiming capital gain deductions & the tax holiday extension will help build entrepreneurship and fulfill the ambition of being self-resilient.”
Sunoor Kaul, Co-Founder & Director, Origo Commodities
“The Budget 2021 in our view has hit the right keynotes this year. In terms of providing liquidity and the credit availability in the agriculture space being increased to Rs. 16.5 Lakh Cr. will push it ahead. In terms of the liquidity that the agriculture ecosystem can further utilize both for commodities and pre-harvest system. with respect to the infrastructure, the agri-infra fund being increased up to Rs. 40 thousand crores will be a big boost to infrastructure which was actually required for the Agri supply chain both in terms of warehousing silos and hopefully, this will promote more warehousing partnerships between the private and the government entities build more projects under PPP model thereby enhance and stabilize the agri supply chain. The government’s move on digitisation with 1000 more mandis being setup on E-NAM platform will help in getting more price discovery and bring efficiency in Agri ecosystem”
Sandeep Wirkhare, MD & CEO, Indian School Finance Company
“Over all well thought out six pillars for growth. Education sector would have expected higher allocation or specific measures for schools & education infra financing institutions given the pandemic overhang but setting up 15000 model schools under NEP is positive and will go a long way in channelising energies in desired direction to enhance much required quality in education. Financial institutions to benefit from setting up an organization in line with Asset Reconstruction Company. Specifically, bringing down applicability of SARFAESI to the loans above INR 20 lac will be a big boost to NBFCs like ours to tackle NPAs.”
Amit Agrawal, Founder and CEO, OckyPocky
“As an edtech entrepreneur, I had huge hopes due to NEP – but somehow the government seemed to have forgotten to backup in primary years. The budget has met the wishlist halfway as the edtech segment had a lot more expectations. There has not been any allocation for funds for kids who have been deprived of schools due to the pandemic. The sector was looking forward to an increment in the funding allocation than the last year, however, it has been decreased further. Although setting up the National Digital Educational Architecture (NDEAR) could be of great benefit to the country as it focuses on educational planning. Adding to this, by extending the eligibility to claim tax holiday and capital gains exemptions for investments in start-ups by one year, it has given a boost to the Indian startups overall and will definitely help to incentivize funding of the start-ups and will help in increasing the entrepreneurial spirits.”
Rajiv Kumar, Founder & CEO, StoreHippo
“The budget has some welcome announcements for small businesses and startup environment. The increased limit of turnover to qualify as a small company would benefit many small businesses, particularly the ones that suffered losses during the pandemic.
Also, the new relaxed norms for setting up one person companies will facilitate more NRIs to participate in the startup revolution of India. Easing of compliance will also benefit businesses in general and promote a business conducive environment in the country.”
Kounal Gupta, Founder & CEO, Henry Harvin Education
“The year 2020 introduced a new way of learning in India where technology played a key role. Amidst this, the announcement of setting up a National Digital Educational Architecture (NDEAR) is a great initiative to march towards a Digital First Mindset which will not only support teaching and learning activities but also educational planning and governance. The announcement of NEP (New Education Policy) in the Union Budget 2021 is also a welcoming step. Furthermore, skill enrichment programs to be initiated in collaboration with UAE will open the doors to new opportunities for the youth. Setting up of the Higher Education Commission via legislation is another motivating step addressed in the budget.
Despite the steps taken for the betterment of the educational ecosystem, we feel the budget lacked specific mentions for higher education. Hence it will be interesting to see the implementation of new laws that will lay more focus on the higher education system. Having said that, we do feel that the allocation of 50,000 Cr for research will strengthen the education system in the country.”
Satya Yerramsetti, Founder & CEO, Telebu
“We welcome the all-round comprehensive budget which covers most aspects of the economy. The 6 pillar approach has been laid out quite clearly and is a very good framework to focus on the inclusive development of the economy. The budget seems progressive and initiatives such as increase in tax audit limit, reducing time limit for reopening assessment and enlarging the definition of small companies will provide thrust to ease of doing business, ease of compliance, ease of living and pave the way for aatmanirbhar and resilient India.
We feel it is a bold and expansionary budget which will spur capex, infrastructure and healthcare spending. The doubling of outlay for MSME sector and extending the capital gains exemption for investment in start-ups will boost Make in India and help companies like Telebu in accessing financial and human capital. Further, the announcement of One Person Company is a great measure that will drive the growth of the start-up ecosystem. The intention is promising with regard to asset monetization, disinvestment and privatization; however, implementation is the key aspect. Executing the planned disinvestments and asset monetization will go a long way in achieving the planned fiscal deficit.”
Vikram Wadhawan, Founder & CEO, Vasitum
“After everything that the country has been through in the past year, there is no questioning that there were a lot of expectations that the Finance Minister had to meet. And she did not disappoint.
The way we see it, Union Budget 2021 focussed on two things – growth & empowerment. And what better way to empower a nation than empowering the start-up culture?
The thing which caught our attention was the proposal for incentivizing the One Person Companies. OPCs came into being in 2013 and have made the employer community diverse and inclusive. And the shift in government’s focus to allow OPCs to grow and become any other type of company. Also, reducing the residency limit for NRIs to set-up OPCs means more and more people can pick a great business model, return to their country, conduct a market study, and start a company!
The Finance Minister proposed to extend the tax holiday for start-ups till 31 March 2022. In our view, this is a move that entrepreneurs across the country are celebrating. Businesses were down in 2020, revenue was lost, debt was incurred, and so much. On a personal level, I am speaking on behalf of the entire entrepreneur fraternity when I say we were anxiously waiting to see if we were going to be grounded. It is a sigh of relief, for sure. We are quite happy that the government also took notice of investments and funding of start-ups. So, the decision to exempt capital gains for another year is a welcome one.
Though, this budget might not have been perfect in all terms and there still may be a lot of grey areas that need attention, it has successfully managed to balance the broader market-need quite well. We are hopeful to see the positive change this brings about in the Indian economy in the fiscal year of 2021.”
Shubhradeep Nandi, CEO & Co-Founder, Pihchain Labs
“There is a need to integrate technology-driven startups in its action plan to boost the financial wellbeing of Rural India. This year’s Budget gives us hope of better regulation for the startups dedicated to Bharat Finclusion, which will help in attracting more foreign investment. We believe that an increase in expenditure to further the financial accessibility to unbanked & underbanked is crucial at this juncture, and India, currently, is lagging. Bharat needs equal, easy, and affordable access to quality financial products customized and built for Rural India.
As far as taxes are concerned, today, the GST we are paying is as high as 18 percent. But, in the upcoming Budget, we hope that this is corrected, given the increasing importance of financial wellness becoming a lifestyle as opposed to a vanity metric. The provisions drafted must require no major changes for at least five years. This would reduce the compliance burden on startups and make management easier.
Wherever needed, corrective changes need to be made to make implementation easier”
Rajesh Panda, CEO & Founder, Corporate Gurukul
“I am expecting an Education budget allocation at 5.5%-6% which will easily be in excess of Rs 110,000 crores in 2021-22. The impetus and increase can be attributed to two primary factors:
New focus areas of NEP 2020 such as AI, design thinking, internships, vocation skills, etc. in schools and universities will need substantial investment in infrastructure and teacher training. The establishment of research-focused universities, if taken up in the fiscal year will add to the budget. The initiative to have primary education in mother tongue will also need a significant amount of resources and teacher training.
Post COVID digitization efforts will be humongous, if the government wants to strategize and implement to transform education in next 5 years in lines with NEP 2020. Digitalization in education will also mean quality and standardized content and delivery across the nation – a crucial factor for success of new initiatives under NEP 2020”.
Kailashnath Adhikari, Managing Director, Governance Now
“Budget 2021 is looked upon with a great deal of expectations as it is the budget right post the pandemic induced year. The industry will look forward to a great deal of measures being announced to boost demand. Measures taken to boost demand will lead to increased consumption which in turn will aid revival of the economy. The BFSI sector has faced great headwinds due to the pandemic. The sector will certainly look forward to measures which will help them raise capital and measures which will augment their process of capital lending. Revival of consumer sentiment will help banks & financial institutions improve their personal lending portfolio. As far as corporate India is concerned any incentive measures which will help them make further investment will be directly related to enchanted corporate lending by the BFSI sector. The sector will certainly look forward to incentives being announced which will ease their process of lending”
Yogesh Makkar, CEO, Kapdec
“The year 2020 had an insurmountable impact on the education systems and on learners. Despite a surge in online education, a vast majority of the student population remained at a disadvantage. At a macro level, a nation with more than 1.5 million schools, more than 280 million students, with over 65% of the student population in rural areas, and more than 50% of the student population in government schools, those specific groups had by far experienced the worst and negative impact. Reasons cited were the lack of quality resources and lack of schools’ preparedness to face such unprecedented times. Much needed is special attention to divert a larger proportion of funds, schemes, government-backed programs to flow into the K-12 segment, supporting the school eco-system or the entrepreneurs supporting education. Our expectations from the budget remain focused in the following key aspects, the strengthen the basic infrastructure for the schools of new era:
Digital Infrastructure: Equip government-led schools with the access and affordability of high-speed internet and computers or tablet devices for lower-income groups. Investing in online education models can be a smarter way of increasing outreach to millions of students in a short period.
Government Policies: Much needed is the reduction of the unnecessary compliances to make it easier for innovators and entrepreneurs to establish businesses, helping grow the economy and education system. Including reduction of taxes on educational services.
Funding: Supporting and helping 1.5 million schools is a task that requires strong input from ed-tech entrepreneurs, focusing more on the innovation in education delivery methods. However, often new start-ups are cash striven and help from government backed funding programs will fuel the growth cycle.”