Early industry reactions to the Indian budget 2021

01st February 2021
Early industry reactions to the Indian budget 2021
Image: Gerd Altmann Pixabay

February 1 2021: Here is the first instalment of feedback  from corporate India
Professional organizations: Nasscom:   “The plan to set up a world-class fintech hub and the allocation of INR 1,500 crore to provide financial incentives for digital payments are certainly positive steps towards realizing a cashless economy. The proposal to amend apprenticeship law to boost skilling is a welcome step to further enhance employability in the country. Start-ups and SMEs play a critical role in defining India’s growth story. While there have been steps taken such as incentivizing incorporation of one-person companies and the extension of claiming tax holidays and capital gains for one more year, this was a perfect opportunity to do something disruptive for the sector, like extending the available tax holiday of 3 years to all start-ups registers under DPIIT, which would impact over 40000 start-ups in the country.
The IT/ITeS industry has been a key driver of growth and jobs in 2020 and we have the opportunity to significantly accelerate its ability to do more. For the IT sector, one of the biggest needs ahead of us is the development of future business models, with hybrid working becoming a reality. We look forward for the government to provide clarity on providing a framework in direct taxes and indirect taxes for the industry to adopt WFH/remote working on a long-term basis. Secondly, we require WFH to be enabled in SEZs on a long-term basis. Since this requires movement of duty-free goods like laptops etc outside the SEZs, the Finance Ministry should provide the requisite clarifications under Customs and GST.
 In terms of attracting new investments, NASSCOM has suggested a bold policy concerning the Special Economic Zones (SEZs). The tax holiday for new Units has ended in March 2020. The Government has provided 15% tax rate to attract new manufacturing. We have suggested this same 15% tax rate be offered to IT-ITES companies in SEZs subject to some employment and investment criteria. We believe this can boost economic development in tier-II cities, drive employment and grow our exports.”
Rajesh Uttamchandani, Director, Syska
 Group: “Finance Minister Nirmala Sitharaman stated that for a 5-trillion-dollar economy, our manufacturing sector has to grow in double digits on a sustained basis. We welcome the measures exercised in the Union Budget towards boosting electronic manufacturing in the country. The government has pledged an infusion of Rs 1.97 lakh crore on various PLI schemes over the next 5 years, starting this fiscal. This is in addition to the Rs 40,951 crore towards the PLI scheme to help expand and boost exports. Today, India’s manufacturing industry has tremendous potential to place the country on the global manufacturing map, simultaneously boosting several employment opportunities to India’s youth. Our manufacturing companies need to become an integral part of global supply chains. With a budget of Rs 15,700 crore, which is more than two times that of the previous year, this will help strengthen the MSME sector in terms of productivity development, technology adoption, strengthening of infrastructure and more. The budget has a positive, expansionary approach towards the manufacturing sector, which is reflected through the incentives and strengthening of the PLI schemes provided by the government."
Kishan Jain, Director at Goldmedal Electricals:“The Union Budget 2021 has provided massive opportunities for companies looking to set up manufacturing facilities in the country. Given our current economic situation across the globe caused by the pandemic, the Finance Minister’s decision to infuse Rs  1.97 lakh crore towards various PLI scheme is laudable in addition to the Rs 40,951 crore towards the PLI scheme to help expand and boost exports. Our manufacturing companies need to become an integral part of global supply chain. Further, the provision of Rs15,700 cr towards the MSME sector, will provide a further fillip to the Government’s flagship Make in India initiative. As a company, Goldmedal Electricals has always been at the forefront of introducing innovative and sustainable solutions that make our planet not only smarter but also sustainable for generations to come and support government’s vision of Atmanirbhar Bharat.”
Surabhi Goel, CEO - Aditya Birla World Academy, Aditya Birla Education Academy, The Aditya Birla Integrated School “The measures announced by the finance minister in today’s union budget 2021 focuses on two important aspects – one is the continuous upskilling of India’s youth and also providing education for all. We are in-line with the announcement as Aditya Birla Education Academy is at the forefront of creating various programs that help the educators of the country upskill themselves. Finance minister Niramala Sitharaman has set aside funds worth 3000 crore with an aim to create an opportunity for millenials of India to upskill themselves. The budget also provided an impetus on establishing a National Research Foundation by allocating Rs 50,000 crore thereby qualitatively strengthening the education system through the National Education Policy.
Gaurang Sinha, Director of Go-to-Market Strategy at Flock: “We welcome the Finance Minister's announcement to introduce the scheme allowing 1-person company(s) for start-ups and innovators to be exempted from paid-up capitals and turnover norms, in the Union Budget today. This will enable India to develop new technologies and boost employment like never before. Additionally, the government’s move towards boosting emerging technologies such as the internet of things (IoT), machine learning (ML), artificial intelligence (AI) and data analytics, will accelerate the growth of our digital economy. Further, the adoption of video conferencing for various tasks by the Government will encourage the use and demand for professional communication and collaboration platforms. We believe that with all of these measures, this new decade looks great for the Indian start-up ecosystem.”
Ramesh Mamgain, Country Manager, India and SAARC, Commvault: “The Union Budget 2021 is sui generis considering that it is India’s first-ever ‘Digital Budget’. The gesture of doing away with the paper versions of Budget underlines government’s commitment towards PM’s ‘Digital India’ vision.  A renewed focus on infrastructure would mean accelerated technology adoption, which cannot be accomplished without data privacy measures, propelled by data protection. This approach would help in strengthening India’s data protection framework to protect individual information, with investments in key technologies like artificial intelligence (AI) and machine learning (ML) to secure cloud-based infrastructures. While the capital expenditure on the physical connectivity - road, railway and port - has been highlighted throughout, I am sure that digital connectivity will ultimately become a cornerstone of everything we do in the current times.”
Vivekdeep Gupta, Country Head, India at R3: “Overall, the budget is forward looking, transformative, and provides the booster shot required by the economy to emerge out of the Covid slump. The continued focus on digital payments is encouraging and I believe that clearly shows how the government, regulators and the industry in India are working in sync. With the new NUE licenses being issued this year, we expect the government’s support to drive further adoption of payment systems in the country. The announcement of setting up a fintech hub in GIFT city can have significant multiplier effects for the economy. The special status accorded to the GIFT city, coupled with its innovative regulatory framework under IFSA has the potential to create a new financial hub akin to Hong Kong or Singapore, with growth being driven by new tech enabled innovations and asset classes like digital assets.Being a part of the blockchain industry, I am looking forward to the introduction of ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ in the upcoming parliamentary session. I strongly believe that this will drive growth and adoption of blockchain across enterprises in the regulated economy while providing a framework for the introduction of an official Central Bank Digital Currency.”
Sonit Jain, CEO of GajShield Infotech:  "Budget 2021 lays a strong foundation in Infrastructure, Health and Education. It provides a big boost in making India a leader in the World Economy and manufacturing hub of the world. Not only does it give an impetus to easing in doing business in India, it also gives a big push to rural development, which was impacted, the most, during the pandemic. The budget has a vision of Aatmanirbhar Bharat and will motivate Indian entrepreneurs to make products in India for the World. Overall it is a pro-growth budget and will further fuel the growth of Indian IT companies with its strong focus on Digital India."
Deepak Chandnani, Managing Director, Worldline South Asia & Middle East: “The FM’s announcement in the Union Budget allocating Rs  1500 crores to promote digital modes of payments is very welcome and will add muscle to the drive to enhance the adoption of digital payments across the country to tier 3 and below towns, a much needed step for universal acceptance of digital payments.”
Prasad Shahane, Head of Lender Partnerships at Rupeek: “The budget ticks all the right boxes with the proposed structural reforms and signals. It does a fine balancing act of promoting growth and mobilising resources without increasing tax burden. The focus and visibility on privatisation (rather than just divestment), and the bold large capital expenditure driven borrowing program are welcome. The reduction of high taxes on gold imports will reduce the landed price of gold and increase its affordability for the masses. We also welcome the focus on establishing regulated gold exchanges and continue to believe that India should take efforts to build on its strength of widely held gold ownership and facilitate monetisation and circulation of gold within the economy. We hope to see more policy and regulatory support on this front in the days to come. On the startup and technology front, the extension of tax benefits to startups and the financial/regulatory incentives for digital transactions are the right signals and point to what the new economy can expect in the years to come."
Pushkar Mukewar, Co-Founder and CEO, Drip Capital: ”The Finance Minister aptly pointed out – for India to achieve its five trillion economy goal, the manufacturing sector needs to grow in the double digits. The Budget 2021 is a good start in this direction. The government’s commitment to double its budgetary expenditure to Rs 15700 crore for MSMEs, will be a big boost for the sector. The Rs 1.97 lakh crore production-linked incentive scheme, which is now extended to 13 sectors, will uplift the overall sentiments of the manufacturing sector and MSMEs at large. It will also allow MSMEs to offer high-quality products at competitive prices in the global supply chain. Proposed projects like the development of seven Mega Investment Textile Parks and five major fishery harbours will provide a competitive edge to Indian exporters in the international market.” 
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”.
Sunil Sharma, managing director – sales, Sophos India & SAARC: "The Government’s Union Budget 2021 is built on the foundation of new technologies such as Data Analytics, Artificial Intelligence (AI), and Machine Learning (ML) which will empower businesses with econsultation, escrutiny, and compliance management. This is surely going to enhance enterprise cybersecurity as AI has immense potential to bring in scalable and effective defenses against sophisticated attacks like ransomware. That said, this increased penetration of digital technologies brings with it additional cyber risks that one should be vary of. As per our recent survey, with 100% Indian businesses being concerned about their current level of cloud security, there is a need for initiatives that promote the development of cybersecurity skillsets. Additionally, this reskilling process should also take care of security of cloud environments which are the backbone of the accelerated digital transformation that India is witnessing due to the pandemic. While we welcome the Government's proposed steps in strengthening MSMEs that provide employment to millions of people, we need more impetus on building skilled cybersecurity professionals in the country. The Government’s allocation of Rs. 3,000 crore towards skill development that will help reskill India’s youth and boost the overall economy, is a step in the right direction.”
Dhruvil Sanghvi, Chief Executive Officer, LogiNext: “Strengthening global and national supply chains is of paramount importance for economic growth. The proposals to set up freight corridors across the country, as well as the proposal for a future ready rail system, along with development of national highways will bridge the gaps that currently exist, bringing in better connectivity between production and consumption markets. Furthermore, the push towards digitisation along with proposals of the one year tax holiday for startups and extending cap gains tax exemption for investment into start-ups shows the intent towards making it easier to do business in India and push forward on the technology wave.”
Niraj Hutheesing, Founder & Managing Director, Cygnet Infotech: “Significant capital expenditure in infrastructure and health care sectors will be a big asset for India. Promotion of digitization at large, and digital transactions particularly, is another positive aspect of the budget. There has been political will to take a big deficit for the next year. Simplifying the tax regime is another important aspect of this Budget. The budget also provided impetus on one of the most hard-pressing issues, namely tax evasion cases. The use of digital technologies such as automation solutions and data analytics tools can help in removing anomalies in the GST tax infrastructure and make it transparent to a great extent. All the measures announced today will further enable companies such as Cygnet Infotech to develop technology solutions for businesses to help them adhere to the taxation norms”.
Roopank Chaudhary, Partner, Chief Commercial Officer India & South Asia, Aon: “The budget’s announcement that social security benefits will be extended to gig workers and platform workers and that the government also proposed setting up of a portal to collect information on gig workers, is likely to be a welcome move for the new economy work-force. The evolution of the Gig Economy is a testament to the changing dynamics at the workplace and how future of work is playing out. A larger percentage of organizations in India plan on increasing the amount of work given to gig workers in the next 2-5 yrs and this could be an important enabling factor in the relationship between employers and gig workers.” The start-up ecosystem also gets a much-needed boost as the tax holiday for these businesses was extended by one more year to March 2022 in the budget, as well as the capital gains exemption given to start-ups also extended by a year more. Such moves are expected to positively impact the sentiment in the start-up sector and act as an incentive.” 
Ravi B. Goyal, Chairman & MD, AGS Transact: “Budget 2021 effectively addresses the impact of the pandemic on overall economy. The budget’s significant concentration on healthcare, allied industries and economic revival is a welcome move and may provide much needed respite in the near future.  The proposed recommendation of allocating INR 1500 crores is a constructive step towards strengthening the overall payments infrastructure and bridging the digital divide in the country.  We also laud the Government’s move to set up a world-class fintech hub, Gujarat International Finance Tec (GIFT), which will spur innovation, growth as well as boost employment.” 
Saurabh Aggarwal, CEO, Octro Inc.(mobile gaming comp0any): “With the government proposing to provide tax incentives for startups and reducing compliances for one-person companies, we at Octro believe that the government’s decision will benefit start-ups and innovators in India. India is amidst a boom in digital technology adoption and the budget will help raise India’s economic footprint in the global scale and help create greater opportunities for companies to invest and develop services in the country”.
Suman Reddy, managing director, Pega India said, As the first budget during recovery of the pandemic, we are optimistic that the slew of measures announced on healthcare and infrastructure will provide impetus to the economy. The agenda to focus on the six pillars including infrastructure, innovation and R&D clearly sets India on a path of recovery.In a significant break from tradition, Government’s Atmanirbhar package focuses on increasing spend towards the creation of jobs and rural development, generous allocations for development schemes, handing more monetary benefits to the common man, and easing rules to attract foreign investments. Enhancing the digital backbone of the country, the announcement on the fintech hub at the GIFT -IFSC and R&D investment of 50,000 crores over 5 years will ensure that the overall research ecosystem of the country is strengthened with a focus on identified national priority thrust areas. The move to establish a National Digital Educational Architecture (NDEAR) in the context of a Digital First Mindset to ensure digital learning, as well as planning infrastructure, will empower the youth of the nation.
Sudhindra Holla, Director, Axis Communications, India & SAARC: “We are upbeat on the six pillars of the government agenda including focus on infrastructure, innovation and R&D that is all set to strengthen India’s power as a global digital hub. We are optimistic by the renewed focus on road safety with advanced traffic management system with speed radars, variable message signboards, GPS enabled recovery vans along with the outlay of ₹ 2.28 lakh crores for developing the highways, roads, and railways. Good to see pertinent steps taken to revitalize the economy with key focus on allocating budget for healthcare, metro railways, ports, airports, and logistics to boost urban infrastructure. These in turn will be stepping stones towards invigorating Smart Cities planning and urban development and help in generating more jobs."
 Nikhil Rungta, Country Manager, India, Verizon Media:Taking insights from the learning curve of Covid-19, the government has done well to take appropriate measures to improve the lives of citizens and pave way for economic recovery. “This is a 'get well' budget with an expansionary outlook and focused on growth. Given the times it might not be a radical budget, but it is practical and thoughtful, which will propel consumption and growth of business. This budget has also rightly signalled the need for greater inclusion in India's workforce. Women being allowed to work in all sectors and in night-shifts with adequate protection, and social security benefits extended to gig workers will provide an impetus for women to step up their contribution towards Aatmanirbhar Bharat.”
Vamsi Krishna, CEO & Co-founder, Vedantu: “The National Education Policy has been a strategic move towards guiding the development of India’s education. To strengthen the policy further, this Union Budget is focusing on initiatives like National Digital Educational Architecture (NDEA) which will provide a diverse education eco-system for the development of digital infrastructure, educational planning, governance and administrative activities. The complete shift from using assessments to not only judge the cognitive levels of the learner but also using it as an opportunity to identify the unique strengths and the potential, is a student centric approach which will lead to the holistic development of a child and provide them a greater edge, globally. Further, I would like to see more investments & budget allocation to go into the education sector to enhance it with more trending technologies which will make education accessible to students in the farthest corners of the country.”
Balajee Sowrirajan, Managing Director, Samsung Semiconductor R&D (SSIR): “We are very optimistic with the focus given on Innovation and R&D being identified as one of the key pillars, I believe 'Design for India' will gain momentum and localization of product designs will lead towards an aspirational and Innovative India. These will lead to the next phase of inclusive growth with increased emphasis on skilling and job creation. Furthermore, with a significant increase in Capex from 4.39 lakh crore to 5.54 lakh crore, the Atmanirbhar Bharat Initiative will be strengthened with more focus on domestic manufacturing and production, laying the foundation for the 5 Trillion Dollar Economy by 2030.”
Warren Harris, CEO & MD Tata Technologies: “With a significant outlay on Infrastructure spend and the much-needed Vehicle Scrappage policy, the government of India has finally set the tone for recovery of Auto Sector which has been significantly impacted by the pandemic. This will not only help boost the demand for production of Commercial vehicles but also support the entire transportation ecosystem. Also, while it would have been good to see some more initiatives to promote Electric Vehicles in this budget, we are glad that the government has noted India’s critical role in the global automotive supply chain post COVID 19.  Specific initiatives through Production linked schemes, creation of infrastructure for R&D and enabling skill development in new-gen technologies such as artificial intelligence (AI) and Machine Learning (ML) will help drive investment in Engineering and Research ”
Ujjwal Jain, CEO & Founder, WealthDesk: “Consolidation of multiple securities laws into a Single Securities market code will bring in clarity and boost capital and debt markets. Likewise, the introduction of an institutional mechanism to buy corporate bonds and an AMC to handle stressed debt from banks will further strengthen debt markets, bringing in faster debt resolution and greater liquidity. Avoidance of changes to taxation - income tax, LTCG, STT, wealth tax, or a Covid cess - will further spur capital market participation in the coming year. The budget also ensured continued support to the Startup ecosystem by extending tax holiday and capital gains exemption for investment by 1 more year to March 31, 2022. Increased spending on infrastructure and enabling entry of FPIs into debt financing in the sector will also boost economic growth and revival.”
Dr Rishi Bhatnagar, President, Aeris Communications:“ Today, Artificial Intelligence and IoT technologies are being used by Aeris Indian enterprise clients not only to optimise operations, but also to plug revenue leakages, reduce NPA’s  and much more. This budget elaborated how the Government is using & promoting technology to achieve record GST collections this year, ensuring good governance and even enabling the very first digital census to be carried out this year, which is indeed a big revolution in India's census exercise. This will make the process faster, eliminating human errors with the use of mobile application rather than pen and paper. Announcements were also made to enable a global competitive edge with natural growth, for instance, the policy on voluntary vehicle scrapping which will help control air pollution index across cities. This is in-line with our objective of promoting electric/battery-operated variants across the automotive and smart fleet sector.”
Sai Srinivas, Co-founder and CEO, Mobile Premier League(MPL), “Government’s budget announcement has been extremely encouraging for the start-up ecosystem in India. The extended exemption on capital gains for investments will definitely make more funds available for budding entrepreneurs and growing organizations alike. Digital payments infrastructure has played a very important role in the growth of the mobile gaming industry. It is very encouraging to see the government’s efforts to strengthen digital payments through incentivization.  The Rs 1,500 crore boost will further support migration of more people towards digital payments and will have a positive impact on the mobile skill gaming industry. The incentivizing of one person companies is especially heartening as it promotes the development of more game creators that will help in strengthening the gaming industry in India. The move has also allowed conversion of one-person companies to any other kind, reducing residency limit from 182 days to 120 days. India is at the cusp of creating a wave of mobile gaming unicorns, these measures only support that momentum. With these announcements acting as winds in our sails the Indian Gaming Industry can aspire to be the Global Hub of game development.”
Leo Joseph, Managing Director, Xerox India: “As expected, the core needs of the economy, coming out of a pandemic-hit year, take prominence in the Union Budget 2021. However, long-term, the budget focuses on the D in India – standing for both development and digitization. The progressive budget lays the roadmap for greater digitization in governance. A budget presented and disseminated in a digital format for the first time to a digital census will pave the way for the government to serve citizens through technology and data more seamlessly.”