2020 had been a year full of challenges for livelihoods and the overall economy of the country, sparked by the COVID-19 pandemic. According to the National Statistical Office (NSO), India's GDP is estimated to contract by a record 7.7 percent during 2020-21 fiscal as the pandemic severely hit key manufacturing and services segments.The Union Ministry of Finance is all set to roll out additional measures to revive the slowing economy, post the Rs 20 lakh crore COVID-19 relief package announced in May 2020.
The upcoming Budget is also expected to boost domestic manufacturing across sectors, in line with the Indian government’s focus for a self-reliant economy.
This year, for the first time in the history of independent India, the Union Budget will be paperless. It is expected that the Budget papers, including the Union Budget and Economic Survey, will not be printed, and the government will provide soft copies for these documents.
With just a couple of weeks to go, every sector, including the Indian startup ecosystem — the third-largest startup ecosystem of the world — is eagerly waiting for the annual budget, to be presented by Finance Minister Nirmala Sitharaman on February 1.
Here's a look at what Indian business leaders, entrepreneurs, investors, and other stakeholders across the Indian startup ecosystem expect from the Union Budget.
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More focus on ease of doing business - Deepak Gupta, Founding Partner, WEH Ventures
One area which has implications for growth and job creation is the ease of doing business ("EODB"). Within that, India lags substantially relative to most in the area of enforcement of contracts. There are many elements to resolving this issue — from accelerated recruitment of judges to the improvement of arbitration processes, and others. We hope that action can be taken on this front in short order with specific pronouncements in the budget and follow-up from thereon.
Efforts to improve rural healthcare - Meena Ganesh, MD and CEO, Portea Medical
Despite 75 percent of the Indian population residing in rural areas, the healthcare concentration is heavily skewed in the urban areas. The best and fastest way to ensure quality healthcare access in rural India is through e-health/e-medicine services.
Funds must be allocated towards skill development of teachers, nurses, paramedical staff, and caregivers. Further, by making budget allocations for the development of telemedicine and home-based healthcare ecosystem in the country, it is possible to best harness the available resources to cover the whole country. This can be done through a public-private partnership more speedily and effectively.
Regulation of hygiene industry - Vikas Bagaria, Founder, Pee Safe
This year’s Budget gives us hope of better regulation of the hygiene industry, which will help in attracting more foreign investment. We believe that an increase in healthcare expenditure is crucial at this juncture, and India, currently, has the lowest public health expenditure in terms of GDP percentage. The country needs an equal, easy, and affordable access to quality healthcare.
As far as taxes are concerned, the provisions drafted must require no major changes for at least three 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.
Facilitating better infrastructure for mental health startups - Shumita Kakkar, Founder, United We Care
There is a need to integrate technology-driven startups in its action plan to boost the physical, financial, and mental health of the public.
Cheaper finance: There must be a multi-pronged approach, starting from making cheaper finances available to e-platforms, foreign, and institutional investments simpler and more attractive, and policy support to startups. Mental health consultations and support services can be given tax exemptions and incentives to expand their coverage and employ more consultants.Facilitating training: Another key initiative must be in the form of facilitating training and education for mental health counsellors, psychiatrists, and other advisors to create a larger number of specialists. Expand mental health coverage: By collaborating with the private sector e-platforms, the government can expand mental health coverage all over India, and effectively support the wellness of hundreds of millions of people. Integrating cutting-edge technology by such startups should be incentivised. Cover mental health under insurance: Mental health consultations should also be made a part of coverage under insurance. Health insurance policies cover mental illnesses currently, but making consultations a part of it might encourage more people to opt for it.
Building better tax infrastructure - Shilpa Ambre, CFO, SARVA
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 wellness becoming a lifestyle as opposed to vanity metric.Also, a “tax holiday” by the government could be a good move. I do expect the Government of India to introduce more incentives that encourage employers and employees to naturally gravitate towards making wellness mandatory at the workplace. This can be done through tax exemptions when an individual invests in his/her health, or some sort of rebates for corporates who make conscious choices for the health and wellness of their employees.
More budgetary support to healthcare - Nilesh Aggarwal Director and CEO, Medtalks
Budgetary infusions: India’s healthcare budget in terms of GDP ratio has been abysmal until now, and the chinks in the armour were thoroughly exposed by the pandemic outbreak. The time has come for the government to scale up the investments in healthcare, and create budgetary provisions for capacity building and supporting technology-driven healthcare startups from the private sector as well. Creation of healthcare professionals: The government needs to build training and development infrastructure to create more skilled healthcare professionals, and to facilitate skill enhancement of the workforce to meet the post-pandemic needs. Reduce dependency on China for imports: The Indian medical and pharmaceuticals sector depends greatly on China for APIs and imports a lot of medical devices. The government needs to support Indian companies to overcome this need by supporting the domestic manufacture of equipment and medicines.
Strengthen the infrastructure industry - Sanchit Gaurav, Co-founder, Housejoy
The COVID-19 pandemic has drastically changed the landscape of construction in India. The pandemic’s impact is likely to be felt in terms of the pricing of construction projects. The availability of materials has become more challenging due to certain restrictions. However, we are confident that the government will take measures to ease the situation by providing interest subsidies, reducing GST rates, etc., in the upcoming Budget.
Nonetheless, the government has frequently announced plans to strengthen the infrastructure and construction sectors, and we are confident that the sector will receive much-needed support in the upcoming Budget announcement.
Incentivise export of technology products - Tapan Barman, Co-founder and CEO, Mihup
The pandemic has driven the global companies to look at India as an alternative to China in terms of technology and manufacturing.
Simplify taxation: By simplifying things such as taxation, investment, and offering further incentives to Indian startups, the government can help in helping them generate more revenue and employment. Cutting-edge technologies: Development of cutting-edge technologies should be incentivised. The Indian government can further enhance innovation in the technology and manufacturing sectors. This can be done through infrastructural and financial support, and skill development, and integration of cutting-edge technologies in all sectors, including governance. Export of technology products: This should be incentivised. The Indian IT sector is already renowned globally, and now is the best time to make the country the global hub in tech innovation and automation.
Infuse more liquidity for MSMEs - Vivek Bindra, Founder and CEO, Bada Business
The government can provide further policy support to MSMEs to tide over the recessionary phase. Given the fact that this is the first Budget post-COVID, the industry is hoping for concrete measures to revive the economy, ways to increase consumer demand, particularly in sectors that were hit hard by the COVID-19 crisis.
Infuse more liquidity: Through the Budget, the government must find ways to infuse more liquidity into the system, leave more money into the hands of consumers, and further ease the process of fund disbursement to MSMEs. Less complex GST structure and ease of taxation for MSMEs should also be a priority.More support to the manufacturing industry: The government must create a competitive tariff structure that favours imports of raw materials over imports of finished goods. Boost rural enterprises: It must also find ways to boost a wave of new micro-enterprises in rural India to create more employment opportunities outside agriculture. Building the entrepreneurial capability of rural youth through business training, easing the norms to start businesses, and creating a fast loan disbursement mechanism for micro-enterprises in villages, can help infuse a new entrepreneurial energy in villages.Job creation: The government needs to infuse more infrastructure based activity in both the rural and urban economies to generate more work opportunities.
De-silo healthcare-as-a-service provider - Kamal Narayan Omer, CEO, Integrated Health and Wellbeing (IHW) Council
It is time we de-silo healthcare-as-a-service provider, and look at the various other aspects that impact the need for health services or its efficiency. Apart from increasing the overall share of public spending in healthcare, the health budget this year must focus on its integrated nature, and adequate budgetary allocations must be made for:
Primary healthcare: Especially in rural and remote areas, ensuring trained manpower and diagnostic services, in addition to affordable and accessible secondary and tertiary care Preventive healthcare: To control the rapid spread of non-communicable diseases and lack of adequate nutrition for the young and vulnerable populationFocus on associated areas: This includes areas such as pollution control measures for air, water, and soil, and strengthening of the supply chain, especially for perishable food items. Health communication: A separate allocation must be made for health communication for behavioural change that will nudge people to adopt healthy and sustainable consumption and behaviour in the medium-to-long run.
Focussed approach for rapidly spreading NCDs - Nikky Gupta, Co-founder and Director, Teamwork Communication Group
The healthcare sector should be accorded the status of a priority sector, unlike all these years, and enable access to funds, as well as tax incentives to improve the affordability of care. India must allocate more funds to generate awareness about non-communicable diseases in people, and induce behaviour change in order to control it. Focussed approach for rapidly spreading NCDs, such as cancer and diabetes, will go a long way to control both morbidity and mortality.
A budget for financial inclusion - Ajay Lakhotia, Founder, StockGro
Pandemic has given a unique window of opportunity to introduce radical changes in economic policies. Tax reforms incentivising increased investments in government bonds, and with secure returns would be first on my cards.From a startup ecosystem perspective, relief from direct and in-direct tax filing for at least two years would help founders focus on business instead of compliances. Overall, a budget for financial inclusion, especially promoting saving and investment across masses instead of classes, is the call of current times.
Invest heavily in the manufacturing sector - Raj Patel, Director, Royale Touche
We expect a strong push from the government’s side to invest heavily in the manufacturing sectors. Hence, the ease of doing business and making Indian business competitive on a global scale should be the priority. Also, the PM’s dream — Pradhan Mantri Awas Yojana (PMAY) — to provide affordable housing to all the citizens of India will remain a significant driver for the segment in the upcoming Budget.
Levy 100 percent customs duty - Nevil Patel, Director, Orpat Group
We hope this time the government to come forward and levy 100 percent customs duty on finish products exported from other countries to support the local manufacturers. This will improve the production infrastructure and create employment opportunities.
If the government announces these measures, it will be a good start for the year, and it will also boost the morale of companies like us to step up our game in achieving the dream of a self-reliant India. By increasing import duties, it will strengthen the position of domestic products in local markets.
Empower the domestic tourism - Vimal Singh, Founder and CEO -ReadyAssist
Road safety must be brought to mainstream with the allocation of funds for awareness, setting up emergency response ecosystems, and improving highway safety and infrastructures. Domestic tourism should be empowered, and housewives should be encouraged and incentivised to become brand ambassadors of local tourism. Riders and the bloggers/vloggers communities should be recognised as they play a large part in our local tourism.
Increased focus on agri investments - Jinesh Shah, Managing Partner, Omnivore
Agritech has been instrumental in helping India manage disruptions caused by the management of COVID-19. The sector saw significant support from the government in this trying period. Furthermore, farmer-focused direct benefit transfer (DBT) initiatives have helped build resilience in the rural economy.
Early-stage enterprises, aimed at post-harvest value addition, must be incentivised and encouraged as the development of innovative fresh produce supply chains and a vibrant food processing sector are key to better price realisation for farmers. I believe the Budget will further add to the momentum we have seen over the last two quarters, with an increased focus on agri investments and agri digitisation.
Strong focus on renewable energy - Rahul Sankhe, Co-founder and President, SenseHawk
We expect the government to have a strong focus on renewable energy in this Budget as in previous years. As a SaaS startup offering solutions for solar companies globally from India, we are excited about how the government has been vocal about India taking a leadership role in the clean energy wave. We believe AI solutions are getting widely adopted for managing solar assets globally, and India is no exception, and are hopeful that stimulus for the sector in the budget will drive growth for the industry.
Increase higher education budget – Prof (col) Shishir Kumar, Director General, ImaginXP
Last year’s Budget had allocated Rs 38,317 crore (40 percent of the total budget) towards higher education. With one in five students unskilled for the modern workplace and about 60 percent unemployability in the higher education graduates in India, I implore to the finance minister to increase the higher education budget by about at least 25 percent. Last year, only Rs 125 crore was allocated to teacher and adult training. We need to significantly increase our focus on teachers as they are the backbone of the education system. We have to invest in the right future skill force, then only can we achieve the PM’s $5 trillion dream.
A progressive surcharge can be a better option - Jiger Saiya, Partner and Leader - Tax and Regulatory Services, BDO India
Tax relief to employers: To encourage employers to retain and re-hire employees or avoid layoffs, Canada introduced a subsidy to the tune of 75 percent of wages for qualifying employers. Similarly, Australia introduced a wage subsidy of 50 percent of an existing apprentice’s or trainee’s wage for up to nine months. While no similar subsidies were doled out in India, tax relief in the form of a conditional weighted deduction for salaries paid, corresponding to the impacted period, would aid disrupted employers. Avoid COVID-19 cess or surcharge: Could taxpayers see a COVID-19 cess or surcharge this Budget? The answer would hinge on how the government plans to fund the fiscal deficit created by the stimulus, and the budgeted spend on vaccination drive. However, between a cess and a surcharge, a progressive surcharge could be a better option as it will not put an equal burden on small taxpayers.
Abolish long-term capital gains tax - Shashank Udupa, Co-founder and CFO, Avalon MetaA lot of retail investors are hoping for the long-term capital gains tax (LTCG) to be abolished, which would provide a lot of relief to existing retail investors, as the government currently charges both LTCG and Securities Transaction Tax (STT). With Sensex close to a historic high of 50,000 levels, a favourable 2021 Budget will push the market to new highs and vice versa.
While India is slowly recovering from the COVID-19 induced slump, all eyes are on the Budget and the possibility of tax reliefs for the average middle-class Indian, which would help boost spending, and thus revive the economy.
Strengthen credit lending for MSMEs - Viraj Sheth, Co-founder, Monk Entertainment
As a medium-sized enterprise owner and entrepreneur, one of the key expectations I have from the Budget is focussed on improving the health of the state of the MSMEs in India. A lot of entrepreneurs are hoping for relief measures in the form of credit lending. Moreover, with the pandemic, the push towards digital adoption of businesses, has only been expedited. Educating the MSMEs and giving them easier access to adapt to this new world would reap immense benefits.
A favourable budget for common taxpayers - Raj Shamani, Founder of Shamani Industries
One expectation from the 2021 Budget — it should be favourable to common taxpayers. This year, they were the one most affected, the ones with maximum EMIs, maximum responsibility, and expenses on a recurring basis. But because of the pandemic, they have seen the lowest days. Providing some relief to the common man is the need of the hour. With this year’s Budget, I am expecting some relief in the tax slab for the common taxpayers. Given the fact that this is the first budget post-COVID, the industry is hoping for concrete measures to revive the economy, ways to increase consumer demand, particularly in sectors that were hit hard by the COVID crisis, like the retail industry, tourism, hospitality, etc.
Availability of working capital for startups - Shivjeet Ghatge, CEO and Co-founder, StepSetGo
A focal point for startups is the availability of working capital. While according to NASSCOM the investment ecosystem is set to return to its pre-pandemic levels, if not exceed it, a mobilised framework for funding would be a great start that would increase the ease of inflow and outflow for foreign investors.
Considering the size of the Indian software exports, we are hopeful that this year's Budget increases the prioritisation of growth opportunities and incentives for indigenous, homegrown brands.For the startup industry, initiatives like 'Make in India' have helped put Indian tech companies at the forefront and drove international visibility.
Reinvent India’s health system - A Ganesan, Group Vice Chairman, Neuberg Diagnostics
The domestic players can continue to fuel India’s growth in the healthcare sector, and to make the ecosystem more vibrant and responsive, a few of the things that need immediate attention are:
CGHS/EHS dues are not still being paid regularly, despite assurances by the central government. Besides, the paperwork for submission of claims is so voluminous, resulting in substantial hardships.MSME rules are only on paper and government departments/agencies are not respecting these rules. These departments/agencies first should set an example by paying legitimate claims within due dates.GST on all supplies/services to hospitals and laboratories should be removed. Hospitals and labs have no output GST liability, and hence the input credits cannot be availed by the lab. In case the GST is abolished on supplies to hospitals and labs, the price to consumers will come down significantly.Health insurance premiums, over the years, have become more expensive. To make it more affordable to larger sections of society, the GST on health insurance premiums should be withdrawnAs per section 80-D of the Income Tax Act, premiums paid by the individual taxpayers are allowed as deduction subject certain maximum amount, depending upon the age of the taxpayers. The maximum amount of deduction should be increased substantially to all categories of taxpayers.As per section 80-D, preventive health check expenditure up to a sum of Rs 5000 can be claimed as a deduction. But, this deduction is allowed subject to the overall ceiling fixed. There has to be a separate deduction, and the expenditure incurred has to be increased to Rs 15,000 and should be extended to the spouse of the taxpayer.
Budgetary provisions for travel and tourism industry - Bhanu Chopra, Founder and Chairman, RateGain
The hospitality and tourism industry was among the worst-hit due to the COVID-19 outbreak. Now, there seems to be light at the end of the tunnel as the demand is slowly and steadily increasing. It will give the sector much-needed push if the government includes the same in its concurrent list.
Budgetary provisions, better regulations, and policy decisions can go a long way for businesses of all shapes and sizes. The government should also consider granting the segment infrastructure status, given its importance in revitalising the economy. Doing so will allow businesses to avail electricity, water, and land at industrial rates along with improved lending rates.
More growth opportunities for MSMEs - Shivendra Nigam, CFO, Cantabil Retail India Ltd.
The government has taken a lot of appreciable initiatives to secure the interest of MSMEs. However, there should also be a focus on large enterprises which are dealing with MSMEs. The government should take steps like making GST returns filing dates the same for all categories of taxpayers, as large taxpayers regularly face working capital pressure due to non-filing of monthly returns and blocking of input credit.Also, we expect some tax relaxation and incentives for taxpayers to have more cash-in-hand and spending power, which will result in more cash inflow in retail to boost the economy.
Apart from this, many people have lost jobs amidst the pandemic due to the hard-hitting impact on the retail industry. It would be interesting to see how the government would address the job creation and security issue in this badly affected economy.
Support for transportation, logistics, and hospitality sector - Alok Mittal, CEO and Founder, Indifi Technologies
The economy is currently in a rebuild mode, and hence, sectoral incentives play a pivotal role as they allow MSMEs to recover. Although different sectors have been hit differently, large sectors like transportation, logistics, and hospitality have been the worst-hit. As a result, there needs to be an initiative to provide them with support and recovery measures. Secondly, the wholesale lending market needs to be refuelled, with a focus on BBB and A-rated NBFCs. This will be a step in the right direction and help the overall economy recuperate faster in the coming months.
Enthusiastic and more supportive fiscal policies for fintech companies - Kumar Abhishek, CEO and Founder, ToneTag
With regards to the budget, we are anticipating major changes and incentives this year, especially for the fintech sector.
Establishing Indian fintech footprint globally: We expect the government to ramp up its efforts in driving campaigns and schemes to encourage migration to the digital space. Encouraging fiscal policies: We are also expecting fiscal policies that encourage banks and financial institutions, especially those in rural areas, to partner and work closely with fintech companies to expand their digital service suite and integrate fintech to provide end-to-end processing instead of piecemeal service.
Boosting the transportation and logistics sector - Sonesh Jain, EIR, WheelsEye
Budget 2021 comes right after a global pandemic and is expected to bring relief to the recession-struck economy of India. Due to the lockdown, numerous industries were affected severely. The logistics sector, which played a crucial role in keeping the country’s economy afloat, is among those in need of dire help. Therefore, the upcoming budget must allot and utilise adequate funds for boosting the transportation and logistics sector. Key expectations include:
Implement uniform and subsidised diesel rates, especially for transporters with less than five vehicles.Revision to lower GST slabs for small businessmen to boost profitability.Allow NETC and NPCI to solve toll or traffic-related payment disputes in real-time.Empower software and hardware related innovation and partner with startups to solve on-ground real problems.Develop a data and resource centre to make logistics-related databases and statistical information easily available.Policies on standardising GPS and other technologies to automate toll collection, business operations, and increase the safety of commercial vehicles.Develop a better custom documentation process and an integrated platform with access to all export formalities for bringing ease and transparency among importers and exporters.
National retail policy, increase in FDI inflow, and more - Ravi Saxena, MD, Wonderchef
Starting the year afresh and on a positive note, everyone is anticipating Budget 2021 with much optimism. The industry is eagerly waiting for the government to introduce the National Retail Policy and streamline the compliance mechanism to facilitate business expansion.
Also, we are expecting an increase in the FDI inflow, which would help organised players to expand their presence as well as have access to the best manufacturing practices, in step with the Make in India initiative. This budget also needs to take into account the rising input costs so that the end consumer doesn't have to face the dual setback of coronavirus-led financial strain and price rise.
Resolution to long-pending policy expectations in real estate - Pradeep Misra, CMD-REPL, Rudrabhishek Enterprises Ltd
The real estate sector is heavily driven by government policy and the availability of investible surplus income in the hands of common people. Some of the long-pending policy expectations include:
grant of industry status ease GST regulations increase tax incentives to buyerseasy finance for the sector single window clearance
Some other expectations include:
Direct measures to address liquidity crisis may include FDI in rental housing, and ECB permissions in all real estate projects. Make provisions for direct infusion of funds in the sector through existing channels like SWAMIH funds. Also, another state-centric fund – SWAMIH funds-II – should be launched wherein state institutions can contribute 50 percent of capital. Regional offices in respective states should fund projects in only Tier-II and III cities, under the current fund.Infrastructure sector is looking for more spending from the government side, as India is going to host the G20 summit in 2023. New flagship programmes for urban infrastructure, transportation, tourism, rural employment, etc ., should be announced. Adequate allocations for quicker economic turnaround and consolidating India’s position as a world-class economy.
Formalising online education should be the priority - Rohit Gajbhiye, Founder, Financepeer
The stakeholders in the edtech sector are eyeing the Budget 2021 with a lot of expectations as the government has already signalled allocation of 6 percent of the GDP towards education. This can be a healthy start towards strengthening the sector. Aligning with it, we expect the government to introduce a framework for formalising online education by coupling it with exhaustive provisions for bridging the digital divide between both ends of the education value chain i.e. the teachers and the students.
Also, the gap in the quality of education between rural and urban areas has to be a priority, and technology is pivotal for that. We are also expecting the government to lay the ground for a gradual increase in the annual budget of education to 10 percent of the GDP to create an ecosystem for a vigorous research and development infrastructure.
Improvement in credit facilities and accessibility of funds for MSMEs - Vishal Gupta, Co-founder, Brands2Life
Startups and MSMEs are looking for some measures to improve the credit facilities and accessibility of funds that can mobilise the growth and further help the sector to revive from COVID-19. Also, the Production Linked Incentive (PLI) scheme needs a stronger framework that will further strengthen the Aatmanirbhar Bharat initiative.
As technology-led developments are taking place at a faster pace, the MSMEs sector needs more encouragement from the government for its adoption. More entrepreneurship and incubation programmes should be prioritised for the Budget. The entire world is adopting new SOPs in 2021 and this budget should set the launchpad for making India the global leader in this decade.
Focus on healthcare - Shekhar Rawtani, Founder, Prescrip
With the COVID-19 vaccine being rolled out, and other structured and effective measures in place to combat coronavirus, there is no doubt that 2021 is going to be a milestone year for the healthcare industry. We hope that the government will present a budget with a bigger focus on healthcare. The ongoing pandemic has put healthcare in the spotlight and has exposed several gaps in the ecosystem. Hence, we need policies that can cover wide-ranging voids in infrastructure, facilities, and financial provisions in the upcoming budget. Making budgetary provisions for our frontline workers, who have been pivotal in our fight against the pandemic, should be one of the key focus areas of the government.
The year 2020 has also set the base for digital transformation and innovations in the healthcare system, and 2021 policies must work towards scaling them, increasing digital inclusion in the remotest corners of the country.
Increase education expenditure - Aakash Chaudhry, Managing Director, Aakash Educational Services Limited (AESL)
National Education Policy (NEP 2020) has already set the pace for enormous skill development for the youth. We are expecting that the government will increase the education expenditure in the current education budget. With more focus on the implementation of the new policy, quality and tax-free education, and skill development, the reforms will pave the ways for more blue-collar jobs. As classroom education has undergone a complete change due to the emergence of COVID-19, we expect that the government will put more focus on online education in Tier II and III cities, and envisage avenues to make India one of the preferred higher education destinations in the world.
Improvement in the healthtech sector - Karan Chopra, Founder, Hospido.in and Co-founder, Doctor On Call
There is a very high expectation from the budget for healthcare startups, especially in a country like India where digital health can truly cater to areas that have a short supply of doctors.
Healthcare platforms connecting patients to doctors have to pay GST on their revenues, whereas broader healthcare services are exempt under GST. Such platforms should also be exempted from GST. Subsidies and lower taxation for healthtech players can also promote innovation in the sector and open access to a lot of people One nation one medical record policy should be introduced where we digitise medical records of the entire population. The government will have to bring together payers, providers, and doctors to implement this.
More support for technology startups - Gaurav Shinh, Founder and CEO, DAAS Labs
The government has started realising the importance of new technologies like Artificial Intelligence and Machine Learning, and has even called ‘data as the new oil’ in the previous Budget 2020. According to a recent NASSCOM report, deep-tech and new startup hubs will continue to grow at 40-45 percent CAGR. It also stated that investments are expected to return to 2019 levels, after seeing a dip in 2020 (if not exceeding in 2021).
The pandemic has been a huge boost to edtech, agritech, fintech, HRtech, and healthtech startups. So, we expect to see decisions to fuel the growth of cloud data storage, big data, and AI technologies in several domains. The pandemic sparked the work from the home trend, with a lot of tech investment being made into Tier II and III cities, and the trend is supposed to continue. Reforms are expected to support and enable these startups as they can have a huge long-term impact.
Take lead on climate change: Anshuman Bapna, Founder, Terra.do
A post-COVID-19 budget is a historic opportunity for India to take the lead on climate change in two ways – first, by avoiding the $2 trillion energy infrastructure mistake that the US and China made by decisively moving away from coal, and second, by learning from China and making deep investments in becoming a manufacturing world leader for a renewables-powered world.The budget should balance this push towards cleaner energy with job retraining programmes for the millions of impoverished Indians who are dependent on coal for their livelihoods.
Education and training are key to creating the new workforce India will need to build a climate-resilient and climate-saving future. Thus, it is time to invest in a new generation of clean energy engineers, regenerative farmers, smart grid planners, and solar installers.
Increased budget for education - Mohammad Zeeshan, Co-Founder and CEO, MyCaptain
As compared to the Rs 99,000 crore allocated in 2020, we might need a slight increase in budget this year; as a lot of technology will have to be implemented at a massive nationwide scale to transform education amidst the pandemic. Keeping the costs of technology in mind, there should be at least a 5-7 percent increase in the budget, specifically allocated to the technological part of education.
Also, there should be GST subsidies for edtech companies providing any kind of services to college and school students because right now, it is heavily dependent on the private sector, and the private sector incurs 18 percent GST on education. So, considering the pandemic, we should get a subsidised GST for the edtech sector for at least the next two to three years.
Increase turnover limit for startups - Siddharth Kothari, Chief Investment Strategist, Om Metal Group
The turnover limit of startups must be increased from Rs 100 crore to Rs 200 crore for a 100 percent tax deduction. There is no need to tax these companies when they are small. Even if one turns out to be a unicorn, it takes care of the taxation requirements of a thousand others. Some other expectations are:
Try public-private partnerships for healthcare startups: Startups that promote health checkups, health insurance, and telemedicine must be supported. Health insurance still remains a distant dream for many, and it's about time that we leverage technology to reach the masses. More focus on agritech startups: The new farm laws, if implemented successfully, would require the use of technology to keep checks and balances in place. Even if they are not implemented, agritech startups have to be promoted to make the agri supply chain more efficient. Also, agri startups focused on sustainable modes of farming must be supported. Educate in India: With initiatives like Make in India and Aatmanirbhar Bharat, the budget must encourage the creation of educational entities that pick the best brains from schools and colleges, and fund their ventures without any hassles.
Support to modern payments framework - Akash Sinha, Co-Founder and CEO, Cashfree
We expect the new budget to include supportive initiatives to provide a modern payments framework which can ensure high-quality performance while gearing up for the next wave of transformation. We are looking forward to RBI’s Regulatory Sandbox, which recently included cross-border payments as the second cohort after retail payments. This move opens up more avenues for fintech as well as offers global expansion opportunities for businesses.
Clear regulatory frameworks would help in assessing the legality of fintech or verifying compliance/licensing. A separate regulatory body would aid in providing transparency in digital payments and also clearly define a framework that caters to unique and new use cases that proliferate as the payment ecosystem matures.A discounted MDR for RuPay and slab-based MDR on UPI transactions would help.Introduce supportive policymaking that encourages healthy competition and ensures innovation is not curtailed.
Control the cost inflation - Dinesh Chhabra, CEO, Usha International
The recent abnormal surge in the price of raw materials and freight costs cast a shadow on sales forecasts in the forthcoming summer months. We hope that the government will prioritise the measures necessary to control the cost inflation with liberal budget allocation focusing on strengthening the domestic manufacturing and component ecosystem this year.
As digital adoption and transformation accelerates, increased allocation to improve internet infrastructure and connectivity to bridge the rural-urban divide across geographies will also induce strong consumer demand and stabilise growth patterns in the future.
(Disclaimer: This is a rolling story and will be updated as and when more inputs are received from Indian startups, entrepreneurs, and industry experts.)
Edited by Suman Singh