More reactions to the 2019 India Budget from industry and analysts

July 6 2019: Here is another  set of industry reactions to the Indian Budget 2019

Institutions, analysts, industry associations
iSPIRT Foundation
Startups may, at last, see the end of the dreaded “Angel Tax” that has plagued them since 2012. The creation of an e-verification process and “special administrators” whose permission would be required before an Assessing Officer can begin inquiries against start-ups who have already received orders should extend relief to those who were excluded from the February 2019 circular by DPIIT. This can also solve for section 68 - wrt unexplained cash credits - which was the more onerous section by ensuring verification of investors. Extending the exemption of section 56(2)(viib) to Cat II AIFs also brings parity and greater participation between AIFs. The tax deduction for investments into startups saw relaxations in the holding period (5 to 3 years), reduction in the minimum threshold (50% to 25%) and extending the time period.
What was missing was an indication of “Startup India 2.0” - the new phase of Startup India. The Rs 20,000 Cr Startup Seed Fund wasn’t announced, nor were fresh incentives for investments into VC Funds or startups, rationalisation of ESOP taxation, amongst others. Lowering the LTCG ( Long term capital gain) rate on startups shares, which was alluded to in the Economic Survey, also doesn’t find mention in the Budget. Additionally, there have been no measures to help our startups list in Indian exchanges. Overall, this budget has also not delivered on promoting Rupee Capital Formation which would help local startups wean off volatile foreign capital.
Faisal Kawoosa, Founder and Chief Analyst, techARC
 The budget while precisely laying the foundation of the role technology has to play for distant New India,  has very little to offer for immediate New India. The expectation was some out of box thoughts that could resolve some major challenges like debt in telecom, increasing domestic value addition in manufacturing or tech led job creation. But this is a budget at usual. 
Manish Sinha, MD, Dun & Bradstreet India
Our headline response to the Union Budget is that the government stayed consistent to the growth agenda that was emphasized in their election manifesto. The Union budget was expected to provide a blueprint to make India a US$ 5 trillion economy. It has outlined some of the measures to achieve that. We see four  themes in the Budget announcements: Structural reforms, Infrastructure development, Investment facilitation and ‘Ease of living’. Structural reforms like strengthening the regulatory authority of RBI, faceless tax administration, rationalization of labour laws, promoting R&D, bringing companies having annual turnover up to Rs 400cr within the 25% corporate tax benefit and social stock exchange will provide a foundational support to the economy. 
Infrastructure spending of Rs 100 lakh crores in next five years, connecting states through Bharatmala phase 2 and developing connectivity infrastructure will facilitate ease of doing business.Measures to facilitate foreign investment through 100% FDI for insurance intermediaries, merging of the NRI-Portfolio Investment Scheme Route with the FPI Route and permitting investments made by FIIs/FPIs in debt securities will help in getting capital.Ease of living measures like National Common Mobility Card, 8 crore free LPG connections and interoperability of PAN and Aadhaar are helpful  initiatives.
Raja Lahiri, Partner, Grant Thornton India LLP
The Budget enhances the Government’s focus on Digital India and Startup India, newer technologies and higher education skills, which are key to achieving the growth ambitions of the country. The incentives for start-ups, including the much-anticipated relief on the issue of angel tax, benefits of carry forward of tax losses and the measures to promote digital payments including the TDS levy are a push in the right direction. The proposal to increase the minimum public shareholding benchmark may need to be carefully evaluated for tax implications, especially for some of the Indian technology listed companies.
Indian Private Equity and Venture Capital Association (IVCA)
The streamlining of AIF taxation by allowing pass-through of losses at the end-of-fund life for Category I & Cat II AIFs will allow investors to offset their terminal losses. We expect this step to further enhance the attractiveness of AIFs as the primary vehicle for VC/PE Investments in India;The IVCA also welcomes the exemption of Cat II AIFs from the purview of Section 56(2)(viib). In 2018, Cat II AIFs invested Rs. 1.33 lakh* crores across 147 deals of which 24.4% was invested in startups, this has risen to Rs. 0.45 lakh crores across 75 deals YTD in 2019, of which again 24.5% has been invested in Startups. Thus, this move will effectively facilitate a favourable eco-system for start-ups, investors and augment their growth in the country. The tax exemption has been a step for broadening the earlier tax benefits, as proposed the fund managers based in IFSC, will get a 100% tax exemption for 10 years out of 15 years.

Nivruti Rai, Country Head, Intel India 
It's a welcome move for the technology ecosystem and I am happy that the government is focusing on high-end technology manufacturing. I believe that this initiative complements India's strengths as a global hub for technology development and adoption. This will add further impetus to design, product development and design-led high value manufacturing in India. This also bolsters India's “Make in India” initiative and will enhance the country's competitiveness and growth.
Aditya Ghosh, CEO, India & South Asia, OYO Hotels & Homes
The budget breaks away from tradition and nudges the public and policymakers to think outside the brown briefcase. It sets a vision for the next decade for India with an intent to bridge the socio-economic and urban-rural divide. The boost to infrastructure, labour reforms, access to capital and talent for start-ups and MSMEs alike will drive productivity and consumption, which is also good news for the hospitality, travel and tourism industry.  The real test of this vision, however, will lie in its realization, which is essential to deliver on the government’s mandate of providing ease of living and ease of doing business. This will be possible only through concerted efforts from all stakeholders.
Varun Khanna, CMO, Aeronutrix Sports Products and Director, Full life Healthcare
The budget has given a very clear message , India wants to be an incubator of new enterprises, and promote the youth to follow their passions of starting their businesses. Apart from benefits , we really hope the reduction of bureaucracy and bureaucrats is also on the cards soon both of which currently can really take away good productive time from young businesses red tape.
Dr. Keshab Panda,  L&T Technology Services, CEO & MD
The government’s focus on positioning India as the top destination for research and innovation augurs well with the interests of the ER&D industry. Moreover, the announcement on providing support to the skill development initiatives related to AI, IoT, 3D printing, VR, Robotics has the potential to establish India as a global talent hub for digital technologies. Lastly, earmarking Rs.10,000 crore over a three year period towards building a wider ecosystem of electric vehicles is a  welcome move. It is now for the value chain players to come together and replicate the success achieved by Indian ER&D players for global auto majors on the EV front.
Sunil Sharma, managing director sales, Sophos India & SAARC
With India poised to become a USD 5 trillion economy in the next five years, we welcome the Government’s impetus in making India a digital economy. The proposal of ensuring the growth of SMEs through various initiatives including establishment of an online portal for MSMEs for filing of bills or the government’s efforts at  improving the cybersecurity skills of our youth in next generation technology areas such as Artificial Intelligence, Big Data and Robotics, aims at meeting the huge demand of skills required in IT and cybersecurity while we look at strengthening the digital transformation wave. Withcyber threats being detected on servers (39%), network (35%), endpoints (8%) and mobile (18%) and 89% of IT managers believing cybersecurity recruitment is a challenge, there still remains a pressing need for further investment in technologies for data protection and IT Security, both from the Government and organization’s standpoint.
Santanu AgarwalChief Innovation Officer (CIO), Paisalo Digital Ltd 
The Union Budget 2019 boosted  consumption, expenditure and introduced tax breaks with the aim of encouraging investment and get the economy on track to achieve USD5 trillion mark. The government believes that this will make the ball roll again, and we hope that it does. The Indian economy liquidity systems are paralysed and are in need for a kickstart. With this view the government will be recapitalising public sector banks with INR700bn capital infusion, to offset the liquidity crunch they have been facing. We think some part of the funds will be retained by banks for their own fund management and some part of it will be made available for lending purposes to promote growth and development of the financial private sector companies including systemically important non deposit taking NBFCs. The budget further provided government guarantee on direct assignment of loan pools done by NBFCs like PAISALO and this move is expected to give greater comfort to banks and hopefully will act as a measure for capex cycle to kick start, and improve the upcoming disbursement quarter number of NBFC ND SI as well propel growth in the recent slow down in business of NBFCs. Foreign Investors will now be able to invest in NBFCs Debt Paper which opens up a efficient avenue for fund raising for NBFCs. 
Debasish Mukherjee - Country Director - India & SAARC, SonicWall
The Union Budget provides a great boost to the MSMEs which is a growing sector. The key focus on digitization and rural inclusion indicate the dependence on technology for fuelling the growth of Indian economy. To this end, it is imminent that a strong policy framework that regulates cybersecurity be implemented for protecting enterprises from cyber threats and attacks.  It is increasingly important now that at a time when MSMEs are under the radar to be completely digitalized and Government focusing on Digital India, it is apparent that more needs to be done for enforcing cybersecurity measures.
Dr. Ajay Data, Founder & CEO, Data Xgen Technologies
It is overwhelming to see how this government is taking steps to realise the dream of Digital India and acknowledging its critical role in changing the lives of the people across the country. It is inspiring on the government’s part to put increased efforts to improve the skills of our youth in said areas, as it will ensure more high paying jobs for our youth both within and outside the country. It is promising to note that the government has proposed to extend the lower rate of 25 % Corporate Tax to all companies with annual turnover up to Rs. 400 crore. Earlier, this rate was applicable to companies worth Rs 250 crore. Lowering the corporate tax rate to 25 % for 99.3% of companies in the country is a positive step. However, contrary to the expectations, the Budget 2019-20 has disappointed the Indian IT sector yet again. There was no mention of the allocation of fund for tech start-ups or any kind of support to the software product companies. Overall the Union Budget 2019-20 generates a mixed feeling among the masses.
Sanjay Gupta (India Head), Vice President and India country manager NXP.  
 We welcome the government’s move to lower the GST rate from 12% to 5% for purchase of Electric Vehicles and the vision to make India as the global manufacturing hub. The push for FAME II by providing the right incentives can encourage a faster conversion rate. Semi-conductors and host of other components will be vital in developing the EV Ecosystem in the country and as NXP, we will play a vital role to foster this goal. Initiatives such as complete elimination of customs duty on some EV components could prove to be a gamechanger for the auto-industry. Currently, over 80% of the cars in India use NXP chip for RFID key.
Amit More, Founder and CEO, Finzy
The Budget for 2019 has a lot of welcome changes and initiatives to push India in direction of becoming a USD 5 trillion economy in the coming years. The proposed Budget tries to maintain a balance between growth, inclusion and fiscal prudence. The TDS of 2% to be levied on cash withdrawal over 1 crore rupees in a year is a step towards reinforcing digital payment in the country. Also, the removal of IT scrutiny for angel funding will further help in resolving tax issues for the startups.  Overall the budget comes as a support for startups by creating a specialized pool of talent and an environment for smooth business operations.  
Dinesh Agarwal, Founder & MD - IndiaMart InterMESH Ltd  |
The annual budget gives a road map of India’s transforming economy and government’s intent to evolve an ecosystem for MSMEs, which is definitely going to scale-up production, build-up infrastructure and help in ease of doing business across the country. Investment in MSMEs will receive a big boost through the proposed Government portal. This should eliminate the delays in payments to small enterprises. By making PAN and Aadhar card interchangeable the government has further offered more transparency and scalability for businesses. In addition, the FM has struck the right cord with MSMEs operating in India by proposing 25% corporate tax on companies up to Rs 400 crore turnovers. This will create an ecosystem for change and give the required impetus for growth and add more job opportunities.|
Rajan Navani, Vice Chairman & Managing Director, JetSynthesys
The ease of Angel Tax comes as a welcome move for the start-up community. Further, the introduction of an e-verification mechanism gives an impetus to companies improving ease of doing business, driving efficiencies for investors, and bolstering the start-up ecosystem in India. To deliver on the country’s Digital India vision, we believe that an increased focus on initiatives for new-age skills in Artificial Intelligence, Big Data, Robotics, etc. will further bridge the gap between technology and talent. This sets the tone for the industry to move from Start-up India to Scale up India.
Gaurav Hinduja, Co-Founder & Managing Director, Capital Float
The Government continues to identify the MSME sector as being critical towards increasing our country’s GDP and employment. The push for increasing acceptance of digital payments, Interest subvention scheme and waiver of MDR charges are key to MSME economy which will not only boost financial inclusion but will also create a conducive environment for NBFCs including fintech players to grow and succeed.|
Shekhar Sanyal, Director and Country Head, The IET
We  welcome the greater focus placed on research and innovation and the setting up of National Research Foundation and a single-window model of research funding and grants which will provide a much-needed impetus to promote research. Further, the initiative of upskilling and reskilling the youth of India in the fields of AI, IoT, Big data, VR, Robotics and 3D printing will enable access to economic opportunities in this ever-competitive evolving future of work. I am sure that the Higher education Policy and the proposed Higher Education Commission will together help us reach greater milestones in our focus to build world-class higher education systems and we look forward to contributing to this mission.
Srini Raghavan, Founder and CEO, EI
Two significant initiatives, National Education Policy and the Union Budget, coinciding this year is a huge opportunity for the education sector. As a research-driven EdTech company, we welcome the government’s proposal of setting up National Research Foundation to improve the quality of research across all levels of private and public educational institutes. I believe it can be a game changer. However, there is a need for a higher focus on K 12 education. Unless we fix core issues in learning levels of school children - such as building foundational skills, tracking impact, board exam revamp, teacher training, etc. - initiatives at the higher education level will not yield desired results.
Kunal Prasad,  COO & Co-Founder, CropIn
The finance minister has taken a positive and cautious approach for the current financial year. The proposed steps to double the farmer's income is a herculean task. Given our experience, public and private partnerships have the complete potential to translate the herculean task to a vincible one that would assist the Central and the State governments. 
Sanjay Agarwal, Director and Co-Founder at Umbrella Infocare
This budget is a balanced budget and ensures the continuity of policies at ground level without offering big bang changes.Most neglected area Gaon, Garib, and Kissan have got the maximum attention through many large scale welfare schemes. Simplifications of GST, Investments, Labour Laws simplification got covered. However, there is nothing to cheer for Individuals directly due to no change in IT slabs.I am sure, the Finance Minister will announce more policies to ensure growth regularly, without waiting for the next budget. Unfortunately, there is nothing specific to promote IT products and services however few demands of Startups have been met.
Surojit Shome, CEO DBS Bank India
The Union Budget reiterates the Government’s intent to accelerate digitisation in the economy. Incentivising digital transactions through measures such as a 2% levy on cash withdrawals from bank accounts above a cumulative one crore per annum threshold and reduced merchant discount rates can structurally change adoption levels.  Additionally, encouraging measures for start-ups should boost digital entrepreneurship as well as efforts to increase digital literacy particularly in rural India will strengthen the Digital India transformation process.
Ali Rizvi, National Sales Manager, Garmin India.
The National Sports Education Board being set up under the Khelo India initiative will significantly impact the sports ecosystem. With the objective of building better sportspersons for the future, this proposal will help improve sporting facilities all across the country. We, at Garmin India, wholeheartedly welcome this budget, which has strengthen the sports ecosystem by encouraging mass participation and promotion of excellence.
 Sachin Dev Duggal, Founder & CEO,
|The budget presented encourages skill development across the country and especially within the tech industry--it’s a well-grounded approach to propel India towards a $5 trillion economy. The focus on modern technologies like big data, VR, 3D printing, AI and IoT which will not only provide job opportunities for metropolitan urbanites living in the biggest cities, but also those in rural areas, as well. The proposal of 20 tech incubators in the agro sector along with the allocation of Rs.400 cr for higher education institutes to transform them into innovation labs is a clear indication about the kind of informed, technically equipped resources India is set to enable for the coming, ever-growing technology-driven industries. The push for digital economy and training of over 2cr. individuals to bridge the urban and rural digital divide is one of the key indicators that India is positioning itself to become a hub for digital transformation in the near future
Nagesh Banga (Deputy Country Manager at BIGO LIVE)  
Digital empowerment of individuals and economy are welcome signs for ushering India into the digital age. We are happy with the initiatives as we are also in sync with the idea of empowering youth with new technologically driven mediums. We see it as a great opportunity to catalyze the movement the government has started as we already have created over 14,000 broadcasters on our network and there are many who are doing it independently. The Newage technology companies and business are creating opportunities for all segments of society which is a good sign for the economy
Prashant Ganti, Head of Product Management, Zoho Finance
The budget 2019 is forward looking with an eye towards making India a $5 trillion economy. It aims to create a business ecosystem characterised by easy access to funds, simplified GST compliance, and availability of payment collection infrastructure for MSMEs that can help improve their cash flow.
Rajarshi Bhattacharyya, Country Manager, SUSE India
We welcome the Government's move in promoting Digital India, Startup India and other initiatives which are positive steps for the economy. It is evident that with focus being put on skilling the youth in technologies such as AI, Robotics & Big Data, the Government is reinforcing the importance of digital innovation. The upcoming generation will be a driving force of the economy, knowledge of deep technologies will help make them employable and bridge the gap between demand and supply of talent. Open source companies like SUSE can be benefited from this talent pool, and be encouraged to work and support the nation and enterprises towards becoming globally competitive.
Rajiv Bhalla, Managing Director, Barco India
 We are pleased with the government’s thrust on improving infrastructure and technology as catalysts for the economy going ahead. For India to be  on the path to being the 3rd largest economy by 2030 , the budget’s rightfully emphasizes  that robust improvements are required in social infrastructure and education. The plan to set up 20 technology incubators to push rural development opens the stage for new initiatives that will enable India to become a $5 trillion economy in the years ahead. Additionally, the budget has emphasized on 17 ‘iconic sites’ which will be transformed into world-class destinations to provide an impetus to the tourism sector. All these initiatives, I believe, will assist in reshaping and empowering the country and will help to drive and sustain long-term growth for India.
Dr. Abhishek Garg, Executive Director, Sansui India 
The first Budget of the Modi 2.0 government has all the right ingredients to bring about structural changes in the economy. Multiple measures have been announced with focus on private sector-led investment, jobs, rural distress and exports. Basic custom duty has been hiked on select items to support the government’s cherished ‘Make in India’ dream. Meanwhile, we continue to await long-term measures that will aid market sentiment and boost the consumption cycle. 
Prashant GuptaExecutive Director, Sharda University
Allocation of Rs 400 crore for world-class higher education, 'Study in India', new national education policy, thrust towards R&D, skilling and new –age technologies are all steps in the right direction that will help, the government, industry and academia in establishing India as the next educational hub. Additionally, the emphasis on quality education, improving the overall infrastructure will help the country become future-ready with a deeper focus on research and new age skills such as robotics and AI.
Ravi Narayan, CEO of T-Hub
First, the introduction of the e-verification process for startups when they raise funds will provide a bankable and transparent control to the IT department. Startups will not have any tax scrutiny on raising funds as the investors, their source of funds, and investment dealing details will not depend on human interventions anymore but solely on e-verification mechanisms.
Second, aspiring entrepreneurs and those that are solving problems at the grassroots level will stand to benefit from the wider availability of world-class training. Also, the proposed dedicated startup news channel will be a knowledge-sharing platform that will inspire India’s future startup growth story.  This will boost the ecosystem as it empowers our youth to embrace entrepreneurship.
Finally, the FAME II scheme and Manufacturing Hub, the new plans articulated in the budget, will give rise to several business opportunities for startups developing intelligent products.
Vamsi Gaddam, Joint Managing Director , Visaka Industries
Firstly, the proposal of investing INR 100 lakh crore for infrastructure development over 5 years will open doors to pitch-in products which are smarter and enhances the infrastructure levels of the country. This will also encourage the traditional manufacturers to make use of government’s interest on the new-gen technologies Artificial Intelligence, Big Data, Robotics and it might require them test out innovative products and solutions for their factory outlets.Secondly, the implementation of 'One Nation, One Power' grid in the power sector, to ensure power connectivity to states at affordable rates and power connectivity to all willing families by 2022 will boost the new building construction processes like installing an integrated solar roofing system that generates energy, instead of traditional roof. This also enable families to use futuristic products creating a sustainable world. Lastly, the creation of ‘Manufacturing, Repair and Operate’ (MRO) industry showcases the commitment provided to Indian manufacturers. It will bring in a transparent environment for the ones in this business.
Tarun Bhalla, Founder & CEO, Avishkaar 
When I started Avishkaar, there were quite a few hurdles that I had to navigate through. This initiative of the Government to have a dedicated channel for startups for information dissemination could prove to be immense for budding entrepreneurs. Focus on job creation in MSMEs and a dedicated payment platform will help give a much needed boost to the industry. Also, teaching skills such as AI, Big Data, IoT and Robotics would help create a skilled workforce in the near future. 

Ashish Bhatia, Founder, India Accelerator   
The Finance Minister has duly tried to address some of concerns of Startup ecosystem. Easing of Angle tax issue  is a step in right direction. Providing a platform like Shark Tank via a Doordarshan umbrella will also help many of the start ups, particularly in the early stages to raise funds and let the whole nation know about them.