February 1 2021: Here is our second set of industry reactions to the Indian Budget 2021. It includes industry associations like IET and iSPIRT as well as educational institutions and corporates:
Shekhar Sanyal, Country Head and Director, IET India: “There is no doubt that the past year was one of the toughest years in post-independence history and therefore this budget is a crucial step in building a post-pandemic India. The 6 pillars presented by the honourable finance minister – Health & Well-being, Inclusive Development, Human Capital, Innovation and R&D are areas of national importance and the underlying thread of self-reliance in these areas is noteworthy. The proposal to start a world-class fintech hub in Gujarat with a potential to provide 150,000 jobs is commendable. However, developing skilled workers to fulfil these vacancies is an area that needs greater detailing. It is reassuring to see that Social security benefits to gig economy workers feature in the budget speech."
iSPIRT: “The Pandemic had decided much of the flow of financial planning in a country like India. The emphasis on Atma Nirbhar Bharat right at the outset in PART A of speech is on expected lines in a changed scenario post-pandemic. Health being given importance forming the first pillar of six pillars was also expected based on ongoing developments. For decades, India has underinvested (both in public and private spend) in the overall health of the population, and it took a global pandemic to dedicate a new Pillar of the budget to improving health outcomes and increase funding by 130%. It is heartening to see a substantial budget allocation of 64,000 Crore towards the Aatmanirbhar Swasth Yojana to improve primary, secondary and tertiary care.At iSPIRT, we are pleased to see this development and look forward to a year of accelerated efforts to establish a key public digital infrastructure that could improve healthcare.”
Prakash Mallya, Vice President and Managing Director,Intel India: “At a time of great uncertainty, the first ever paperless Union Budget 2021 stood out for its unremitting focus on economic recovery through higher spending and inclusive growth opportunities. The allocation of Rs. 50,000 crores over the next five years through the National Research Foundation to develop India’s potential as a global innovation hub is particularly exciting. This will undoubtedly provide greater impetus to the Indian innovation story and cement our position on the global map of leading economies. At Intel, we are steadfast in our commitment to partnering with the Indian government on this journey of technology fueled innovation and growth.The Budget’s elaborate focus on developing healthcare infrastructure is also very encouraging. Technology will be a key enabler for building a robust healthcare ecosystem that can ensure universal access to high quality and personalized medical resources across the country. The past year has also refocused efforts on a digital-first mindset to enable greater access to education, support educational planning and teaching, and elevate learning outcomes. The proposed National Digital Educational Architecture (NDEAR) together with online modules for education and provisions for digital training for teachers are welcome steps towards ensuring quality education for all. It is evident that the government is banking on India’s digital technology foundation to power its revival journey. It is encouraging to see the government’s sharpened focus on adoption of cutting edge technologies like Artificial Intelligence and Machine Learning. We are excited to see the future of Indian innovation and economic resurgence unfold over the next few months. And we look forward to continuing to partner with the government to develop innovative technology solutions that can support the nation’s growth objectives, generate employment and strengthen India’s digital innovation capabilities.”
Rahul Agarwal, CEO & Managing Director of Lenovo India: The six pillars of the Union Budget 2021 add enormous value to the economic relief post the pandemic issues and paint a futuristic picture for the new year. It has managed to address some of the key issues around Atmanirbhar Bharat, education and Digital India that presents significant business opportunities for global corporates such as Lenovo. With the PLI scheme announced along with the increased focus on ‘Make in India’ in this budget, we are confident that it will encourage local manufacturing, and further bolster the local PC market. The national education policy also creates an opportunity to build the Indian EdTech ecosystem to make it best across the globe for research & innovation, and empowers the citizens to scale up their skills.”
Akhilesh Chopra, Sales Director at Bluei: Mobile, charges and power banks can be expensive in the coming times. This is because Finance Minister Nirmala Sitharaman has proposed to increase customs duty (import duty) on mobile phones and power bank sub-parts for FY 2021. The aim is to promote local manufacturing in the country, the rebate on all parts of mobile phones and parts of chargers is being withdrawn. Now 2.5% import duty will be levied some parts of mobile phones and chargers will now be subject to 2.5% customs duty. Till now, there was no duty on these parts. Increasing custom duty will certainly make it expensive for the companies to procure these mobile parts. To make up for this, mobile companies may increase the prices of mobile and power bank in the coming time. Currently, handsets attract a customs duty of 22.5%. Apart from this, display panels, printed circuit boards, mechanics, and die-cut parts also attract a duty of 10%. At present, customs duty has to be paid on the components of the total value of 50 percent of the bill of a mobile phone.
Ramanujam Komanduri, Country Manager, Pure Storage India: “Budget 2021 looks promising and rightly focuses on public healthcare, given the disruption caused due to the pandemic. We are particularly excited about the Finance Minister’s announcement of smooth delivery of digital services as part of the next wave of digital revolution. AI, ML, and Data Analytics are making greater inroads in India, as was observed in the budget. These are all essential elements of the modern data experience. We are looking forward to the next phase of Digital India which will be a big growth driver for businesses and individuals alike.”
Jitendra Chouksey, Founder of FITTR - "We welcome the steps outlined in the Union Budget 2021-22. It hinges on augmenting economic recovery while laying emphasis on self-reliance. This year’s Union Budget has a strong focus on healthcare with increased spending. The allocation of Rs 2,23,846 crore for healthcare in FY21-22 and the proposed ‘Aatmanirbhar Swastha Bharat Yojana’, with an outlay of Rs 64,180 crore over six years is expected to give the right impetus to healthcare in India. What makes it significant is the fact that this year the allocation is almost double of last year’s budget. Considering the given circumstances, this was the need of the hour. Besides healthcare, the budget has given due importance to the start-up segment as well. The extension of tax holiday by one year, till 31st March 2022, on revenue as well as investment was much needed during these challenging times. This will further foster the growth of start-ups in India. On the whole, we believe that announcements made today will help usher in a well-balanced growth of the economy."
Rajat Singhania, Founder of HyLyt by SocioRAC: "The budget is growth-oriented. Govt expenditure on infrastructure is high which will boost the economy. There are no major changes in direct/ indirect taxes. For startups, the tax extension, increase in paid-up capital, registration of one-person firms, NRI permission to incorporate OPCs in India is a good boost to Startups. Overall a positive budget to spur growth, stock markets have responded very positively and we can expect to overcome some of the losses of the year gone by."
Kapil Makhija, CEO, Unicommerce: “We appreciate the government’s continued push towards digitization and strong infrastructure. The focus on development of roadways, dedicated freight corridor and airports will provide a great boost to logistic sector enabling faster product movement across the country. The strong road and rail connectivity will also help in making e-commerce logistics more sustainable in smaller towns, leading to higher growth of the e-commerce sector. We are optimistic that the government’s focus on encouraging digital transactions and strong push towards manufacturing in India, will boost the e-commerce growth in in the long run.”
Kumarmanglam Vijay, Partner, J Sagar Associates: “While the Finance Minister briefly touched upon the direct tax proposals, fine print reveals many proposals that may have far reaching impact. Taxation of gains on ULIPs has been brought at par with Mutual Funds, Interest on PF contributions beyond 2.5 lacs has been made taxable, Slump Sale provisions shall cover other modes of transfer of business as well and anomaly leading to double taxation of income that was subjected to Equalisation Levy in FY 2020-21 has been rectified. Further, Budget proposals that seek to promote reduction in time limit for reopening assessment, increasing turnover threshold for tax audits, and providing pre-filled tax returns are aimed at bringing in certainty and making tax compliances easier. These measures coupled with use of Artificial Intelligence and Analytics shall boost the Direct Tax to GDP ratio in ensuing years”.
Dr. Keshab Panda, CEO & MD, L&T Technology Services: “The move to provide greater impetus to India’s manufacturing sector with outlay of almost Rs 2 trillion over the next five years is indeed a welcome move. We are hopeful, this will pave the way for enhanced adoption of digital engineering capabilities by domestic players, especially in the Industry 4.0 segment, to give them a global edge. With patents and innovations being at the core of our proposition as a pure-play engineering services provider, it was encouraging to know that Innovation and R&D was classified under the six pillars of focus for this year’s union budget. Unlike last year where explicit mention to initiatives such as National Mission on Quantum Computing and Technology were announced, one would have hoped that this year’s budget would have made provision for further focus.”
Lalit Mehta, Co-founder & CEO of Decimal Technologies: “The budget seems to tick most boxes that India needs today post COVID. The promise on CAPEX should help in generating employment and also solve for long-term growth objectives. The six pillar focus will set the foundation for growth in coming years and make us better prepared for difficult situations like the COVID.Some of the items that would see effect faster than others would be the FDI cap increase for Insurance, which will surely lead to a better capitalized Insurance sector and better reach of Insurance to the masses. Privatization of PSBs is a welcome move. It should help in make the banking sector more agile and oriented towards digital growth. This should lead to a few acquisitions of PSBs by private lenders. Hopefully, this will increase reach of the private sector to rural markets and will enable these markets with new products and a digital ecosystem. The fintech hub in the GIFT city is a great step towards enabling the fintech industry and shows the government's recognition of FinTech as a significant play in the financial sector. This should set the road for creation of the required regulations and frameworks for FinTech to work with conventional lenders and banks.”
Ashraf Rizvi, Founder & CEO of Digital Swiss Gold and Gilded:”The Sensex witnessing a rise of over 4.5% signals the positive sentiment towards the Union Budget 2021. The gold and silver market received good news with a rationalization of import tariffs. The reduction in import duty on gold and other precious metals from 12.5 percent to 10 percent, will make jewelry cheaper in the domestic market for the buyer, as India continues to be the second-largest buyer of gold in the world. Moreover, the announcement of SEBI as the regulator for gold exchanges in India, is also a welcome move as it hints at deeper regulation of digital transactions of the yellow metal, which is a critical to earn consumer trust. Overall, a very positive shot in the arm for the Indian economy that looks to help India and its citizens recover in 2021 after a very difficult 2020.
Rupa Barua, Managing Partner & Director, The Brand Quest: “It's a mixed bag for us. 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. In a big boost for startups and incentivize incorporation of one-person companies, such companies will be allowed to grow without any restriction on paid-up capital or turnover and to convert into any other type of company at any time. Apart from this, the government has given a huge aid to home buyers. Presumably, the real estate sector will accelerate. Overall, this is an ambitious, growth-oriented budget and the government has tried to ensure that the economy receives the impetus it needs to go back to a respectable GDP growth level.
Shachindra Nath, Executive Chairman & Managing Director, U GRO Capital: “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.”
Nikhil Das, Founder, Agdhi: “The budget presented by Nirmala Sitharaman Ji today acknowledged the importance of agriculture in India’s economy as one of the central pillars employing 15% of the population. The central budget has shown confidence in the Minimum Support Price (MSP) regime and has upheld it for the farmer. The budget has promised 1.5 times MSP against the cost of production across all commodities. This is likely to bring in more innovation and adoption of technology in farming. Besides this, the budget has proposed an increase in agriculture credit.The budget has realized the importance of start-ups in job creation and has extended the tax holiday for startups till March 2022. Already withering under the impact of the pandemic, the announcement has come as a big relief for startups that have become a critical employment generator with 4,70,000 jobs. Such measures are likely to boost sentiments across the board among potential entrepreneurs who are keen on entering the market with their business ideas”
Dr. Ajay Data, Founder & CEO, VideoMeet:“The announcement by the Honorable Finance Minister regarding the startups was much required at the moment and will help the fledgling startups with meager resources to continue with their business operations without worrying about the compliance with complex taxes. The announcement comes soon after Prime Minister announced setting up of Rs 10,000 crore fund for seed funding of startups. These moves by the government make the intent of government clear that it wants to promote entrepreneurship and help the enthusiastic young entrepreneurs in the country. The setting up of separate administration structure to promote ease of doing business is a laudable move by the FM. Also, as predicted startups were given importance under this budget, and the industry is poised to be greatly benefited with the Tax holiday extended by another year till 31 March 2022.”
Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and Proptiger.com: “Amid a sharp improvement in consumer sentiment with regard to property purchases post the start of the COVID-19 vaccine rollout, the government’s move in the Budget to extend the benefit of additional Rs 1.5 lakh tax deduction on home loan interest, until March 31, 2022, will act as a further impetus to the residential property sector. This move will augur well, especially for the affordable housing segment, which will also benefit from the decision to offer a tax holiday for affordable housing projects for one more year, to boost supply. The support announced today for rental housing too will go a long way in boosting the real estate market and will ease a lot of pressure points in the rental home market. This will also help migrant workers to a great extent and will support them in remaining in metros and other big cities during times of financial hardships such as the one presented by the Covid-19 pandemic. However, the long-standing demand of the real estate industry to expand the definition of affordable housing so as to include homes priced more than Rs 45 lakhs in big metro cities, has sadly not been addressed.The infusion of lakhs of crores into India’s infrastructure segment, with a focus on improving connectivity, will be particularly beneficial for India’s housing sector. The proposed debt financing for REITs and InvITs, and the setting up of the Development Financial Institution for augmenting funds for infra and the real estate sector is expected to provide a major fillip to the sector, and will attract more investments in the sector.The proposed extension of the tax holiday for start-ups by one more year, a tax exemption for relocating funds to IFSC, and a tax holiday for the aircraft leasing business in GIFT city, are some of the other measures that would also help India’s real estate sector as a whole.”
Raman Roy, Co-founder, Indian Angel Network: “FM’s Budget High focus on COVID 19 Vaccine: 35k crores and can allot more: enable India to get back on its feet quickly. The announcement of pneumococcal vaccine rollout in more than 5 states will impact the health care system towards a healthier Atmanirbhar Bharat. The additional budget for urban health and wellness centres will provide the necessary boost.”
Saurabh Srivastava, Co-founder, Indian Angel Network” “Budget’s focus on health, hygiene, clean air, water: will need innovative solutions, great opportunity for startups! Easing for one person companies and size of small businesses boost for startups. Margin money for stand up India 25 to 15% is a welcome move. One Nation- One Ration vision is an aspirational project benefitting 86% beneficiaries. Incentivising digital payments will help Fintech players. Measures to facilitate contract disputes will help investors.”
Amit Gupta - Managing Director, SAG Infotech."I am neutral or slightly ok with this 2021 Budget announcement. Relaxations like senior citizens of above 75years not required to file an income tax return with pension income is appreciable. Also, now the government has increased the limit of auditing in the case digitized transactions from 5 crore to 10 crores is impactful for those who were in the bracket. The reduction of assessment time period from 6 years to 3 years will drastically lower the paper handling so it is far better now from the previous rule.Nothing much has been introduced in the taxation industry but we have gathered strength from the previous budget so there is not much issue, however, some of the clients from healthcare & infrastructure have told us that they are happy as of now and we have equally responded to them. It is to be seen the impact of Budget in the coming days for a clear picture ahead."
Rajendra Chitale, CFO at Crayon Software Experts India:”It is a welcome move that the government is emphasizing on the implementation of data analytics, artificial intelligence, machine learning for the Ministry of Corporate Affairs (MCA)' database. We also welcome the digitization process and the introduction of e-scrutiny, e-adjudication, e-consultation and compliance management in MCA 3.0.. After the adversities of 2020, tax holiday for another year to startups is a commendable move for the government. Again, the tax audit bar raised to Rs 10 cr for those transacting 95 per cent digitally shows the government's commitment towards bringing in greater transparency. Apart from that the government's promise on removing GST anomalies and the amount of Rs 1,500 crore earmarked for a scheme to boost digital payments are other welcoming moves for a stronger digitized India..”
Gurpreet Singh, Managing Director at Arrow PC Network Pvt Ltd: "Regressive rules had certainly affected the ease of doing business for many organizations and start-ups. However, the government's announcement of establishing a separate administrative structure especially for ease of doing business will help many organizations benefit in the future. Revision of the definition of small companies by raising the capital base to Rs 2 Cr from the current limit of Rs 50 lakh will give a big boost to companies affecting their monetary status. Though not much of changes have been made in terms of income tax slabs, the move to make changes in tax evasion has instilled confidence in common man that they would not be facing tax harassment. Earmarking Rs 1,500Cr for promoting digital mode of payment and changing the tax audit limit from Rs 5Cr to Rs 10Cr will benefit many and will allow transparency. Hiking of FDI from 49% to 74% is a good move. The announcement that the forthcoming census would be digital shows the government's initiative to practice what is being preached. On the other end, the emphasis on education, power and infrastructure sector will support the overall development of the nation."
Jaya Vaidhyanathan, CEO, BCT Digital: “2021 budget is more of an Infrastructure and Healthcare budget. Glad to see the stimulus to the economy keeping these spends in its core. Governance is also paid attention to. We would have loved to see some more announcements for the BFSI sector over and above the notable mentions like FDI limit being lifted for the insurance sector. And Interesting to see the conversation happening to see the shadow bad bank. While the Stressed assets are being moved to the asset recovery unit, we still have to wait and watch. It does make sense to take the assets to specialist to monetize it, but it also has the inherent risk of the bank just moving the bad assets rather than works on preventing issue of bad loans or prevents NPA’s. So we have to pay attention to its execution. And it is also to be seen who is going to be at the helm of the asset recovery to ensure that execution happens in the right way. There was emphasis on governance issues , and it goes with the turf of independent directors. So overall largely infra and healthcare, things have not been shaken up much, and attention is paid to economic recovery, but it is yet to be seen if this is a V share or U shape recovery. Let us hope the budget is executed well.”
Sanjay Gupta, Vice President and India Country Manager, NXP Semiconductors:”The Union Budget 2021 has been the first-ever digital budget marking a major milestone in the digital journey of India. The budget has put the much-needed focus on Atmanirbhar Bharat and the need to grow the innovation and R&D sector in the country on a sustained basis. We are excited about the announcement of INR 50,000 crores for the National Research Foundation over the period of five years. This will surely boost the overall research and innovation ecosystem of the country. R&D is the lifeline for any organization and any country to continue to prosper in changing dynamic times. In India, we have to focus parallelly on 'design-in-India' in addition to 'Make-in-India' to continue to be ahead of the curve. Looking forward to having more and more companies leverage this increased R&D budget from govt and develop future researchers and Innovators. The voluntary vehicle scrapping policy would play a major part in phasing out the old and unfit vehicles thereby encouraging uptake in environment-friendly means of transport like electric vehicles. Overall, we are hopeful that Budget 2021 will propel India in the direction of becoming a global economic superpower.’’
Vikas Garg, Chief Financial Officer at Paytm: "The Finance Minister has presented a balanced budget that is aimed at maximum growth of all sectors in the coming year. The Rs.1500 crore proposed scheme to incentivize digital payments is a welcome move that will accelerate the growth of cashless transactions in our country. During the pandemic, digital payments emerged as one of the key enablers of empowerment at the grassroots and brought millions of people under the fold of the formal economy. Government's continued emphasis on increasing investment in Infrastructure, Insurance and digital payments will ensure financial inclusion of the masses."
Ajay Piramal, Chairman, Piramal Group:“I would like to commend the Finance Minister for a well-balanced and realistic Union Budget 2021-22 designed to put India’s ongoing business cycle recovery on a much more solid foundation. The Budget’s high focus on public capital expenditure, relaxing fiscal deficit targets and concrete plans to support financial markets through recapitalisation of public sector banks, and an asset reconstruction company for bad loans will provide the necessary impetus to restore economic growth. While the Budget is cognizant of the country’s immediate economic needs, it also lays out a medium term vision of 3-5 years.Furthermore, the introduction of a Development Finance Institution (DFI) to fund long term projects will complement the high focus on infrastructure. With banks remaining evasive towards long term institutional exposures, the DFI is expected to ensure availability of credit for projects with long gestation periods.”|
Sonali Kulkarni, Lead – Financial Services, Accenture in India:“The investment outlay towards digital payments is a welcome inclusion in the Union Budget. As per a recent Accenture research report, in India, 66.6 billion transactions worth USD 270.7 billion are expected to shift from cash to cards and digital payments by 2023. This shift is expected to intensify the existing competition in the Indian payments space and ultimately, enhance consumer experience and convenience. However, the exact nature of the scheme of the outlay and its implementation will be instrumental in its success.We are seeing some notable innovation coming out of India’s fintech ecosystem – be it for digital payments, credit and risk management, underwriting or security. The initiative to set up a fintech hub in Gujarat International Finance Tech-City (GIFT) will spur investment and innovation designed to help financial institutions not just meet compliance requirements but also build more-personalized customer products and services.”
Prof S Sadagopan, IIIT Bangalore: “The Union budget this year is focused primarily on healthcare, national infrastructure and agriculture - following the effects of the pandemic last year. However, what caught my attention was the government’s plan to construct a universal platform that will help collate information and set up access to social security benefits surrounding healthcare, credit, etc., to the gig and platform workers. This is a welcome move as it will better the daily life of the workforce that makes up a significant percentage of our population.”
Rustom Kerawalla, Founder Chairman, VIBGYOR Group of Schools: “We, like the rest of India, welcome Budget 2021 with open arms. This budget is highly significant, as it comes at a time when Indian industry is beginning to rebound from the unprecedented contraction caused by the COVID-19 pandemic, and our goal needs to be to help the country get back on track as the world’s fastest-growing economy, by boosting the spending on education, skilling, and apprenticeship. The budget has correctly highlighted the imperative for greater emphasis on innovation, research, and development, which are crucial to helping India reach the aspirational goal of becoming a $5 trillion economy. Focusing on the amplification of emerging technologies can help create a world-class education ecosystem in the country and equip future Indian professionals with the required skills and competencies to navigate the data-driven world of tomorrow.”
Hersh Shah, CEO, India Affiliate of Institute of Risk Management (IRM India): "We welcome the Finance Minister’s announcement to revamp the higher education sector in line with the NEP2020. Among other critical developments, the Nation First policy, outlined in the budget, is based on strengthening education for all with an emphasis on primary and higher education. The budget focuses on the need to foster international collaborations in research and development as a critical tool for skill enhancement. The announcement of higher education cluster in nine cities will bring synergy and further strengthen the education sector. It will allow enhanced cooperation between good private and public institutions, encouraging knowledge-sharing and coherence. We are looking forward to the Higher Education Commission which will be tasked with taking forward the vision of NEP2020.”
Akhil Shahani, Managing Director, Thadomal Shahani Centre for Management, Shahani Group and Ask.Careers: "The budget had some welcome initiatives, like collaboration with UAE & Japan, adding more rural schools, and strengthening the national apprenticeship programme. However, I believe that a lot more could have been done to build India's education sector as per the goals set out by National Education Policy (NEP 2020). Increased allocation of funds up to 6% of GDP (as recommended by expert committees), opening the sector to private for-profit investors and allowing foreign universities to setup campuses in India, were great opportunities which were missed in this budget."