The past year saw an unprecedented calamity across the world, the COVID 19 Pandemic and the subsequent lock down across the world bought the world and India to a standstill. The new normal in a world where Covid-19 unfortunately has become part of our life and will bring about many changes in the way businesses will be conducted, and more importantly the way we live our life.
In a world post-lockdown where the rules of the game have changed, we are seeing a tectonic change in the way we communicate and conduct businesses. We are seeing green shoots and the industry is gearing up for the new normal.
We spoke to Business leaders across various industries for their Expectations on the Budget in 2021
Hareesh Tibrewala Joint CEO of Mirum India
For any finance minister, a budgeting exercise is not an easy one. Especially in a country which demand high level of spending on social issues such a basic healthcare, education and infrastructure. However the challenges for the FM in 2021 are going to be compounded manifold on account Covid 19. With lower revenue collection on one side, and providing fiscal support to weaker sections of society and business on the other, it is quite certain that all fiscal ratios would have gone for a toss. In such a situation expecting any kind of tax relief for any section of the society seems out of question and perhaps not a logical ask either.
For this budget, government focus should be on: Massive infrastructure spending: Infra spending helps to create long term productive assets for the country, this eventually translates into economic growth. Also infra spending creates employment opportunities at the lowest strata in the society and instead of a trickling down-effect actually has a bubble-up effect
Tax reforms: While the government has already taken up agricultural reforms and Labour Law reforms, I think government also needs to look at tax reforms. While GST has now stabilised, constant tinkering with the rules and has made GST a complex maize to navigate. Similarly direct taxation also needs further rationalisation from an implementation perspective.
The government launched the Insolvency and Bankruptcy code in 2016. It was a very laudable move. However over time it has lost its bite. The government needs to push this aggressively so that sick businesses can transfer hands to new owners who can run these businesses better
Also from a media and tech business perspective:I would have two suggestions to make- The government has still not announced the rate of export incentive for the services sector (SEIS scheme) for FY 2020. This needs to be done at the earliest. The export incentive is a big driver for export of media and technology services
Also the export incentive on the services (SEIS scheme) needs to be continued for FY 2021 and for FY 2022, specifically keeping the Covid 19 situation in mind
Sharad Alwe Co-founder and CEO of Update Geotarget
As expectations are on all-time high for the first budget post-pandemic, the media/entertainment industry is hoping for concrete measures to revive the economy, the government must find ways to infuse more liquidity into the system, leave more money into the hands of consumers and further ease the process of fund disbursement.
Some industry growth grappling was brought to the forefront thanks to pandemic; like funding crunch, monthly GST/tax burden, rigid compliances and adoption of technology are key concern from the industry perspective.
Media/Entertainment companies find it difficult to justify spending money on technology when their core businesses can do with improvement.
Adopting technologies such as artificial intelligence (AI), machine learning or penetration of technology solutions faces biggest barrier of “huge upfront cost”.
Any kind of levy or considerably lower upfront cost will create products and services that are relevant, affordable, and one for the “digitally” aspired future of India.
Overall, if government ‘prioritizes’ on some tax breathers, rebates & levy on technology adoption cost, it will be a positive consolidation of the industry-leading to resurgence of growth and generate substantial employment opportunities.
Raghav Joshi, Co-founder and CEO (India Business Unit), Rebel Foods
The restaurant industry was badly hit in the year 2020, and even with the relaxation of the lock-down rules, food chains have had to incur additional costs to ensure that the highest standard of quality and hygiene are maintained for safety of the customers. We would request the government to look at this aspect and extend some stimulus packages to help recover from the after-effects of the pandemic. Also, It will be great if the government can give a relaxation by the way of GST credit available for input cost, to be set off against output GST payable on Restaurant services.
Dr. Sunita Gandhi, Founder of GETI and GCPL
The previous year proved to be game-changer for the education industry by drastically replacing traditional classrooms with online teaching methods. This along with the introduction of National Education Policy 2020 made a strong foundation for the following year. We expect the 2021 Union Budget to be open to creating an Edtech ecosystem with greater access to internet and robust data protection. By allowing innovation in the sector and improving the basic digital infrastructure of the country, the government can ensure that our education system is immune to any pandemic in the future. The global COVID-crisis was a wake-up call for all of us to and now that we have it, we believe this year’s budget will focus more on making education accessible, affordable, and scalable. Our education system needs a perfect combination of digitization and traditional classroom learning; the budget must elevate start-ups in the EdTech sector which reciprocate the same beliefs.
Dinesh Chhabra, CEO, Usha International.
The stakes, as well as the expectations, are high from the upcoming Union budget with all eyes on the government’s plans to revive the economy and counter the detrimental impact of the pandemic. While industries across the board fell prey to the impact of COVID-19 and the ensuing lockdown and restrictions, the consumer durable industry did revive post the lockdown relaxation, catering to pent-up demand first which sustained till the year-end due to evolving consumer needs for convenience and hygiene. However, the recent abnormal surge in the price of raw materials and freight costs cast a shadow on sales forecasts in the forthcoming summer months. We hope that the government will prioritise the measures necessary to control the cost inflation with liberal budget allocation focusing on strengthening the domestic manufacturing and component ecosystem this year. As digital adoption and transformation accelerates, increased allocation to improve internet infrastructure and connectivity to bridge the rural-urban divide across geographies will also induce strong consumer demand and stabilize growth patterns in future. We are hopeful of these initiatives from the government, which will help spur revival in demand and consumption, bringing cheer to both industry and consumers.
Puneet Gupta, Founder and CEO at AstroTalk.com
The Indian government has taken steps in favour of young start-ups & MSMEs before and we expect the same from the budget, this year. The centre needs to encourage entrepreneurship, as this is the best way to generate more jobs & progress economically. Start-up friendly policies should be made to easily register a business & provide relaxation in taxes till it reaches minimum revenue. Make a provision for a collateral-free loan and remove major roadblocks from foreign investments in India. Once the startup culture flourishes, the country would start progressing for good.
Jatin Ahuja, Founder & MD– Big Boy Toyz
While the rest of the automobile sector was financially and economically impacted due to the coronavirus pandemic, the pre-owned luxury car market grew at an unusual pace. The sales recorded a strong sequential recovery post the lockdown months as the urban demand and people’s sentiments had a positive influence. Tier-2 and -3 cities also came forward as prospective clients as the festival season picked-up. Going forward, we expect to have continuous government support to sustain the recovery that we have made. Increasing the spending capacity of consumers will help us to regain the lost momentum. Also, initiatives to promote the phygital experience (physical + digital) will be appreciated as this is the new normal now. Lower taxes, simplified and GST filing must be the motto of this year’s budget. Companies, OEMs, and individuals are expecting the budget to be long-term friendly rather than focusing on just survival.