In a bid to boost the pandemic hit economy, through the multiple investment announcement in the sectors like Health, Infrastructure, Education, Startups, Automobile among others. Finance Minister Nirmala Sitharaman on Monday tabled the first paperless Union Budget for 2021-22 in the parliament.
Here are some reactions from Indian businesses, Startup founders, Investors, and Analysts:
Vishal Yadav, CEO, FDI India:
“This year’s budget provides a great Philip to the economic growth by clearly laying out strategic moves that not only foster the growth of key industries such as manufacturing but also make India an attractive investment destination. We are thrilled that the government has put an increased emphasis on ease of doing business as is a basic prerequisite for a thriving FDI ecosystem. There is a balanced approach to FDI whether in terms of equity or debt.
The insurance sector has attained great importance in the post-pandemic phase especially in life and health. Therefore, the government’s move to raise the FDI cap for the insurance sector from 49% to 74% allowing foreign ownership in insurance with safeguards was indeed a much-required step. We appreciate the government’s concerted efforts towards cementing India as a preferred investment destination globally.”
Mr. Arjun Ranga, Managing Director, Cycle Pure Agarbathi:
“Budget 2021 looks promising, it will surely expedite the V-shaped recovery that we all are working towards. The initiatives taken to strengthen the global supply chain and upgrade the national fright corridors are commendable, this will highly impact businesses across sectors. The policies taken towards infrastructure will elevate India’s stature to the global level. The budget has the potential of catalyzing the Sankalp of Nation-first.
The policies announced by honorable FM will enable the initiative of AtmaNirbhar Bharat and boost domestic manufacturing. The doubling of MSME allocation to Rs 15,700 crore is a well-planned strategy to boost the sector and bring it to pre-covid levels. This budget will also strengthen our local handicraft market and support the artisans in this sector. The improved credit access for enterprises will also uplift the industry and generate employment in the country. FM’s initiatives towards women empowerment ensuring their safety is another great step which, will be a game-changer for our country.”
Dr. Vibha Tripathi, Founder & CEO, Swajal:
“Jal Jeevan is a step in the right direction and if implemented with a vision of technology and innovation it can not only greatly benefit people but also force startups to think out of the box.
Tax holidays and capital gains tax exemptions are helpful. However, more support is needed to enable startups to recover from a pandemic, especially easier access to capital through debt and equity.”
Amit Sinha, Co-founder, Unnati:
“The budget 2021 will surely enhance the agricultural sector. Increased credit target is a very positive step and will help build up distributed agriculture infrastructure which is very much needed. In addition to this, the money in the hands of farmers through the MSP regime will keep the momentum seen during the COVID times going in agriculture. With the new Budget announced, Farmers and the sector stand to gain from the funding.”
Mr. S Viswanatha Prasad, Founder & Managing Director- Caspian Debt:
“We welcome setting up of a new DFI for providing infrastructure capital and leveraging it however it should focus on providing capital only to the private sector and non-profits. Another DFI lending to Government entities will not create any differentiator.”
Mr. Avishek Gupta, Investment Director, Caspian Debt:
“Outlay for T of `1,000 crores to Solar Energy Corporation of India and `1,500 crores to Indian Renewable Energy Development Agency is a welcome step. Solar Energy Corporation will be able to commission more projects and if it can target Green SMEs for some of these implementations, it will give a big boost to these companies. The solar companies having challenges in implementing and sourcing components during COVID should get special attention in form for subordinated debt or equity for them to leverage debt to cover the lost ground.”
Mr. Sarbendra Sarkar, Founder & MD, Cygnett Hotels and Resorts:
“While there is nothing specific on the tourism and hospitality sector in the budget, I feel the broader focus on the budget on increasing consumption and infrastructure spending by the government will have a positive impact on the hospitality sector. The government has done the right thing by not introducing any new tax or COVID cess as some had anticipated. We also believe that the amount allocated for COVID vaccination is a positive for our sector as more people get vaccinated it will encourage people to travel.”
Mr. Gaurav Mehta, Founder & CEO, Jaipur Watch Company:
“I think the budget is positive in the sense that it will drive consumption and encourage consumers to spend like they were doing the pre-COVID times. The announcement on rationalization of custom duty on gold, silver, and other precious metals is a huge positive for us in the bespoke watch industry. The demand for bespoke gold watches is at an all-time low, a lower customs duty will help us in reducing our input costs which we can pass on to consumers. Await to hear details on custom duty for imported watches.”
Mr. Sasidhar Nandigam, CoFounder & CSO, CredR:
“This post covid budget has been balanced given the situation where the entire economy is struggling. There are few good steps taken by the government. But we were expecting more. Most importantly, they have not taken any measures on relief in the direct taxation as this would have had a direct impact on consumerism and the ability to purchase private automobiles or apply for a personal loan.
We welcome the steps taken in the scrappage policy & extension of tax holiday for start-ups. For startups, this comes as a breath of fresh air to the struggling startup ecosystem. With the pandemic disrupting business and earning this year, the amount saved from this tax holiday will help startups to reinvest this money into building business.”
Mr. Shubhradeep Nandi, CEO & Co-Founder, PiChain Labs:
“Increase in tax holiday for Startups will help as a boost after the pandemic blues. Incorporation of OPCs without paid-up capital and turnover limitations will allow them to grow without compliance challenges and help get into the mainstream quickly. The other interesting thing to watch out for will be MCA 21 version 3.0 portal powered by advanced technologies like data analytics, AI & Machine Learning.
This hopefully will reduce the manual TAT and gaps leading to holistic due-diligence. Doubling of allocation for MSME will hopefully be a great boost towards new employment generation post the very challenging covid period that had seen poor demand & job cuts.”
Mr. T.Kalyan Chakravarthy, Executive Director, PanIIT Alumni Foundation:
“The budget strengthens the Skill India mandate of India being the human capital provider for the world including an avenue for livelihoods of the underserved – economically weaker sections, SC, ST. The Nursing bill is welcome and the current draft needs amendments for creating a credit continuum from ANM (Auxiliary Nursing & Midwifery) to all the way MSc nursing for upward mobility. This is a forward-looking budget that is much needed for COVID resilience. While budgeting is important for ‘what is being funded’, It would further help if ‘the how’ (implementation) mechanisms are outlined and increasingly made outcomes-focused year on year. The central scheme based framework needs to be reimagined for making Atmanirbhar Bharat a reality.”
Ahaan Aggarwal, Founder & CEO Junoon:
“At the onset, we would like to laud the government for growth driven budget. We welcome the progressive initiative aimed to benchmark skill qualifications, assessment, and certification, accompanied by the deployment of a certified workforce and with an international collaborative training Inter Training Programme (TITP). But we feel that the budget could have been more focused on skill development and job creation as it is an urgent need of the hour! None the less government thinking about skill development at par with UAE or Japan is consistent with the vision of Junoon”
Sudhesh Chandrasekar, CFO, slice:
“India is one of the fastest-growing fintech markets in the world and the 2021 budget reflects the government’s willingness to support this growth. From the setting up of a world-class fintech hub in GIFT city to the Rs 1,500 crore proposed scheme to incentivize digital payments, the budget is focused on building a strong infrastructure that would be pivotal in aiding financial inclusion in our country. It’s also encouraging to see the FM’s focus on extending social security benefits like health, credit (easy financing), etc. to our gig workers who have time and again proved to be highly essential for our economy. I strongly believe that good collaborations and partnerships with organizations who share the same belief systems will further help the government with effective execution of their ideas.”
Narayan ‘Naru’ Ramamoorthy, Chief Revenue Officer, Global PayEX:
“At the outset, it is laudable that the Union Budget 2021-22 lays an increased emphasis on the use of data analytics, artificial intelligence, and machine learning across industries. We welcome the Government of India’s move in taking definitive steps towards using the power of digital technologies and boosting the fintech and startup ecosystem through initiatives such as the fintech hub in Gujarat International Fintech Tech (GIFT).
The benefits accrued through the allocation of Rs. 1,500 crores for promoting digital modes of payment as well as the increased tax audit limit for those who carry 95% of their transactions digitally will enable businesses, especially MSMEs to digitize their entire value chain and drive exponential impact on key business levers – innovation, growth, and efficiency. Add to it, the proposed setup of Asset Reconstruction Company (ARC) and Asset Management Company (AMC) for stressed assets, which will help accelerate the much-needed credit line in B2B payables and receivables financing from the banking system.
Further, the allocation of INR 3000 crore for skill development and facilitating a National Digital Educational Architecture (NDEAR) within the context of a Digital First Mindset will help bridge a sizeable technological skill gap in the country and offer the right engine of incessant growth, while setting the foundation for India’s future in the right direction.”
Mr. Kumar Gaurav- Founder and CEO, Cashaa:
“Strengthening the financial scenario stood at the top of the priority list. Hence, the announcement of the ease of establishment of the financial institution is a great move. Also, embracing the technologies like AI and ML is the need of the hour. However, we expect the government to enhance the financial system and create more jobs by welcoming blockchain and cryptocurrency. India has become a key crypto market in less than a year since the Supreme court uplifted the ban. The Indian government can be at the forefront of crypto regulation, to be adopted worldwide. Smart regulations can help eliminate scams and enable the legitimate business to thrive, assisting the government’s ambition for a digital India to flourish.”
Mr. 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 the Budget underlines the 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. Overall, it is an inclusive and pro-growth budget, presenting a balanced stance on the pathway to recovery.”
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 the smooth delivery of digital services as part of the next wave of a 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.”
Pavan Adipuram, Co-founder & CEO, ChitMonks:
“The Budget this year was riding high on expectations from taxpayers and businesses. The FM has tried her best to deliver on a majority of parameters. It is heartening that the much talked about COVID cess was introduced neither any dramatic increase in taxation for the businesses. For a digital-first company like ours, the proposal of Rs 1500 crore to incentivize digital payments will accelerate the financial technologies sector growth.
In investment instruments like Chit Funds, Mutual Funds, online payments, more companies are expected to move to 100% digital payments mode which will ensure further transparency and confidence in individuals and it will address the problem of any scams running that take advantage of innocent individuals. However, the devil would be in the details. We look forward to the details of this proposed scheme as it will tell us how the incentives will work for the companies and individuals.”
Hitesh Jirawla, Founder & CEO, Cubictree:
“The FM presented a digital Budget, a yet another first of India. It is a small step but goes to show the intent of this govt to move to digital transformation in every way possible. Indian Courts have been under tremendous pressure with limited availability of judges. Longer litigation results in higher costs, procedural hassles that consumers and companies suffer.
The proposed MCA21 Version 3.0 will roll out e-scrutiny and other compliance management initiatives thereby bringing down the legal costs for companies and individuals. The use of deep tech, will over time impact the judgment delivery thereby making it faster and for some standard cases, there is a possibility to introduce an element of automation in the documentation and other legal processes. We believe the govt has taken a lead in addressing the problems that currently ails the judiciary system in our country. Over time, India may see fast closer of matters and justice served to the people who have been waiting a long time.”
Divya Jain, Co-Founder, SafeJob:
“Union Finance Minister Nirmala Sitharaman presented Budget 2021 in the Parliament today. This budget was significant as it was expected to revive the economy reeling under the COVID-19 crisis. Almost all the sectors were adversely affected due to the COVID-19 pandemic. Of all, perhaps the education sector faced major challenges. As schools and colleges largely remained shut, due to the COVID-19 outbreak. The strengthening of 15000 schools for the effective implementation of the National Education Policy is highly welcomed. These schools are suggested to mentor and work as a model for the NEP implementation across the country.
Along with this, the establishment of 100 new Sainik schools in collaboration with NGOs and private organizations will help in providing standard education to remote areas of the country. The government has also announced to set up a Higher Education Commission responsible for the accreditation and regular funding of the Colleges and Universities providing better synergy to these institutions.
Realigning apprenticeship for students from Diploma in Engineering will get an allocated fund of Rs. 3000 crore increasing knowledge transfer through on-the-job learning and customized training that meets industry standards. The government will also collaborate with UAE for skill development and deployment and has taken a few innovative initiatives to maintain and increase the quality of the research ecosystem in the country by collaborating with Japan and many more countries in the future to help in.”
Anukumar Ramesh, Co-founder & CEO, LegallyOne:
The Union Budget 2021 delivered on many parameters like healthcare, infrastructure, education, banking reforms but the distant cousin — startups — were more or less left out of the key announcements. The tax holiday and LTCG exemption are definitive positive initiatives but their impact remains limited to DPIIT recognized startups (tax break exemption). The funding in the startup sectors currently comes from foreign funds, so while LTCG will give a boost to domestic money finding its way into the sector, the numbers still won’t match up to the scale where impact can be made. However, we can’t ignore the fact that the govt has rolled out many positive initiatives outside the Budget like the Rs 1,000 crore seed fund announced recently, and even setting up OPC will give a boost to new startups getting launched. It will also give them credibility in raising seed or angel money.
The simplification of zero return GST and filled tax returns is overall good for the small entrepreneur. The digitization of the Census is in the right direction of overall digitizing all government processes as this would enable census within months and not years as it takes now. Overall, a good budget but not much for the startup community.”
Ashvin Patil, Director & Founder, Biofuels Junction Pvt Ltd:
“The allocation to the clean energy sector is a big support to the solar energy sector, which shows that the government intends to promote the clean energy sector. The rural development infra fund where the allocation is up by 34% supports the biofuel industry which typically originates from agriculture waste and also provides good incentives to the cotton farmers.
There is also an ease of doing business where tax audit has been raised to Rs 10 crores which will support the small entrepreneurs where the compliance will be much lower. Lastly, the Agri infra development sales, which are levied on petroleum, diesel, and coal making them more expensive than biofuels thus making it beneficial for the sector. I think overall it’s a good budget and we look forward to its implementation.”
Ajay Kaushik, CEO, Panacea InfoSec:
“With the thrust on technology and entrepreneurship, the 2021-22 budget is historic. From healthcare to infrastructure, the Govt has come up to the expectations of all the stakeholders. In this budget, the Honourable Finance Minister has announced the allocation of Rs 1,500 crore for a proposed scheme to provide financial incentives to promote digital modes of payment. This will be a boost to the digital economy which will further lead to the demand for payment data security.
The strong focus on digital infrastructure and announcement for the fin-tech hub at gift city shows Govt’s will power towards realizing the dream of Digital India. Furthermore, strategic initiatives aimed at leveraging new-age technologies like the Internet-of-Things, Machine Learning, Robotics, Bioinformatics, Quantum Computing and Artificial Intelligence in governance across sectors will further help in laying the foundation of a robust digital economy. Apart from this, the concessions announced for one person company and relaxed norms for NRIs will help start-up creation and ease of doing business.”
Imaan Javan, Director of Operations, Suntuity REI:
“We applaud the Government of India for having minutely looked through every aspect of the economy to indeed roll out a Budget ‘like never before.’ With the impact of the recent pandemic, the Govt needed to emphasize measures to both repairs and revive the economy. The INR 1000 crore fund allocations to the solar corporation will bring in the much-needed respite. In addition to that, no customs duty on solar imports of modules and cells will give an impetus to the developers to take up more projects thus enabling India to achieve the ambitious target of 175 GW by 2022.
Also, the increased focus on infrastructure along with the Government’s vision of clean and sustainable sources of energy can together create more potential opportunities for the solar industry. This will provide more scope to educate the C&I and a residential segment on the perks of transitioning to sustainable sources of energy and accruing the benefits of the viable solar sector.
We believe that the forward-looking budget will springboard the growth of the solar industry in India, multiply employment opportunities, and empower Indian to level up with her global counterparts.”
Rahul Garg, Founder, Moglix:
“A digital budget for a digital India! The 2021 Union Budget takes a calibrated approach in shaping the government’s fiscal policy and responding to opportunities and challenges on our way towards being self-reliant over the long term. The budget strikes the right notes for developing the financial corpus and physical infrastructure needed to incentivize manufacturing enterprises to make in India for the world.
The outlay for the National Infrastructure Pipeline through 35% higher CAPEX spending on multimodal logistics and affordable housing, and extension of projects will increase the scale and strength of India’s supply chain infrastructure. The special framework for easy exit and duty alterations will augment the ease of doing business for MSMEs, enabling small businesses of today to become global manufacturers of tomorrow.”
Hersh Shah, CEO, India Affiliate of Institute of Risk Management:
“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.
The Budget 2021 also addressed the key issues facing the economy today. The six pillars, as envisioned by the FM, will be critical in reviving the post-pandemic economy. The decision to double MSME allocation will provide much-needed relief to the micro, small, and medium-scale entrepreneurs who were hit hard during the lockdown. Incentivising one-person companies, coupled with easier debt resolution will further help in boosting this critical employment-generating sector. The slew of measures in finance, insurance, and banking continue the government’s commitment to reforms while providing critical space for capital inflow in the economy. Overall, the budget shows the government’s commitment towards developing a robust education ecosystem that is in harmony with sustainable development and a self-reliant India.”
Saurabh Jaitly, Co-Founder, ShippiGo:
“Eligibility for Tax Holiday for Startups has been extended by one more year to 31 Mar 2022 and the Exemption from a capital gain in investment in startups has been increased by one more year to 31 Mar 2022. This will provide some relief to startups facing the heat of the pandemic. The fund infusion into the MSME sector will also act as an enabler. Ease of doing business has also been enhanced for individuals looking to establish opc’s.”
Ganesh Raju, Founder & CEO, Ken42:
“Budget 2021 is growth-oriented and presents a lot for the industry to look forward to as the country recovers from the pandemic. At 600 million, the youth comprise more than half of our population, and the budget has included announcements to improve their lives and education, as well as the future of the nation. The announcement to strengthen 15,000 schools as part of the National Education Policy (NEP) 2020 will be a major fillip in the quality of school education.
The proposal to start an apprenticeship and embedded degree and diploma courses for students in non-science and technology streams in 150 higher education institutes by March 2021 will increase the available opportunities to students for upskilling and employment. It’s also likely to open up more opportunities for edtech companies to collaborate with the government education sector. It can be expected that the edtech companies that form a part of the MSME sector will benefit from the allocation of Rs 15700 crore that has been provided for improving the sector and industry. The move will generate a lot of employment opportunities as well.”
Mr. Ram Kewalramani, Co-founder & Managing Director, CredAble:
“Amid unprecedented times where COVID-19 economically affected the entire world, the budget was expected to focus more on the financial backbone that kept the cash flow for aligned sectors and those in need. Although the major focus being healthcare, infrastructure, and agriculture, the financial institutions could have got a cushion from the government. Looking at the fiscal deficit for 2020-21, which is approx. 9% range, the government now needs to find the means to execute the emphasized projects, with ease.”
More so, as the proposed budget did not consider the most looked upon comfort a consumer seeks from Direct or Indirect tax reforms from the annual he further adds, “The budget missed out on the supply chain enterprise that keeps the consumption drive intact. Cash requirements for the short run, especially for small as well as large business houses remain untouched. Besides, the additional cess has been proposed on both petrol and diesel, which will only add to the cost of goods and services. The focused projects announced for infrastructure which may help stimulate demand, in the long run, will also be subject to implementation effectiveness.”
