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HomeBUSINESSBudget 2022: what does the industry want #4

Budget 2022: what does the industry want #4

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The countdown has begun for Nirmala Sitharaman’s fourth Budget on February 1 this year.  All eyes are focused on union finance minister Nirmala Sitharaman’s annual budget 2022-23? Will she be able to put India on the path for economic revival, by increasing production, curbing inflation, and maintaining an eight per cent plus growth rate?

Here’s what some of the industry CEOs expect from Finance Minister Nirmala Sitharaman’s budget on 1 February 2022:

Rohit Garg, CEO and Co-founder, SmartCoin

The fintech landscape is changing tremendously on account of some significant measures. The allotment of Rs 1,500 crore for a new fund in Budget 2021 has further accelerated growth by incentivising businesses to offer digital payments to assist fintech businesses in thriving in the ecosystem.

Last year’s budget was a testament to how the industry proved its worth during the COVID-19 crisis. However, there is still a long way to go with many more difficulties that must be addressed quickly and effectively. In recent years, digital lending start-ups have proven to be a huge asset to the country.

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The Union budget for 2022 is all set to be announced soon. We eagerly anticipate increased spending on liquidity and guarantee programmes to help improve loan supply and make NBFCs more capital accessible. The NBFC sector is likely to grow more modestly this year and new capital is expected to be supplied to support this expansion. We look forward to working with a new era of NBFC/FinTechs beginning this year in which the government promotes more banks and larger NBFCs while also giving credit access to individuals who are yet not served by the banks.

KP Vinod, Managing Director, Alliances & Govt. Partnerships, Nudge Foundation

The development sector (non-government) has responded rapidly in augmenting government efforts during the pandemic. With appropriate but not burdensome checks and balances, and with incentives, the government can encourage a massive growth of socially conscious investments in healthcare, education, skilling and employment, urban/ rural livelihoods and social entrepreneurship.

Government should aim to create a more resilient economy through this budget, with an emphasis on bolstering the social sector to accelerate the revival from the impact of the pandemic. Only strong collaboration between governments, corporates, innovators and civil society can help create the impact we need.

Meghna Suryakumar, Founder & CEO, Crediwatch

A more straightforward GST rate structure and simplification of GST compliance. MSMEs need incentives to digitize and use technology to scale their business. To encourage widespread use of technology, the budget needs to provide financial incentives to MSME’s who invest in technology solutions.

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Simplify banking norms and encourage digitisation of financial services to aid the Fintech Sector. Further investments in strengthening digital public infrastructure.

Sumesh Nair, CEO & Co-founder, Board Infinity

Apprentice levy: Our expectation from the budget is 2 fold – one is an apprentice levy on all organisations paying wage bills of more than 15 crores. This levy should be charged at 0.5% – 1% of the wage bill. This levy can be used to build apprentice training programs which can help a massive number of students getting out of higher education to access these programs and get skilled. Employers will benefit from a great talent pipeline in this process. This model is very successful in the UK for many sectors.

The second expectation is a reduction in GST. Currently, 18% GST on educational services is a burden on the consumers, especially for technical and supplementary education. If we can build more affordability for customers it would be great. More than 50% of the total addressable market can’t pay more than Rs 35,000 for a skilling course. This plus GST of 18% discourages many consumers to opt for learning and relearning. I would urge the government to reduce the GST from 18% to 5% on all educational services. This would encourage skill learning and create more skilled professionals which is the need of the hour

Better financing models: The government should move towards having better financing models and direct the banks to introduce new products apart from traditional educational loans. I would expect that a national institution or consortium should take this ahead as financing is a core need to increase skilling training adoption. This will generate more skilled professionals leading to a better economy. Although NBFCs and new-age institutions are trying to innovate and introduce new products, the coverage is still not optimal.

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Real-Time SME Job Portal: We would also want an SME job portal being run in a Public-Private partnership model. This portal should give real-time visibility into jobs available with SMEs and the skills required for the same. It is similar to airline inventory available in global distribution systems and there is full knowledge on inventory. In this case, inventory means jobs available across SMEs. We need a central system to understand the real-time job availability across SMEs.

Remove university degree requirement for Jobs: We would need basic entry-level jobs at Rs 3 lacs to Rs 5 lacs without a university degree as it is an unnecessary burden on many people to complete higher education to get into jobs. the NEP spoke about multiple entries and exits, but this can be done if at a central government level a rule or legislation can be bought out and in fact incentivize employers to hire skilled youngsters who needn’t go through a higher education system to find entry-level jobs in digital, finance, management skills domain.

Nikhil Mathur, Managing Director India & Head Data Partnership & Innovation-APAC, GfK

In the coming Union Budget session, the industry is expecting an increased focus on energy-efficient products with reduced GST tax slabs and added incentives. Some reforms that is likely to boost manufacturing include reduction of corporate tax, expansion on Production Linked Incentives, rationalization of tax rates on products like Air conditioners, televisions, etc., The government’s commitment to make India a global manufacturing hub and ‘AtmaNirbhar’ with ‘Make in India’ vision will potentially help in increasing penetration and expansion of tech & durables market.

Mayank Tiwari, Founder and CEO, Reshamandi

2022 marks the potential for commendable growth and bigger-than-ever expansion with the right boost from the upcoming budget. In foresight, some remarkable reforms have to be made in enabling the three significant stakeholders that benefit from the three evolutionary stages of any product; suppliers of raw materials, manufacturers and product sellers.

When it comes to the textiles and apparel industry, they are the farmers, reelers and weavers, and the retailers. India should recognise its farmers of natural fibres as an integral part of the agricultural sector. The government can invest in scientific methods of preventing crop failure at the early disease level which will ultimately increase the overall yield. This could turn the country into a significant game-changer in the world’s textile and apparel industry.

The proposal for a GST hike for the textile industry has been deferred, which I believe is welcome news. Thousands of small businesses can be adversely affected if the hike is not devised, taking into account all the stakeholders.

Small scale manufacturers must be acknowledged as engineers of their own merit. Government can extend credit facilities for them and provide means for new-age technology adoption. In the textiles and apparel sector, the reeling units and the small-scale weavers would hugely benefit from such progressive measures. Besides, enough allocations for R&D would also make way for greater product quality.

At the seller level, tax burdens and rigid regulatory compliances should be remodelled, which can provide scope for growth and expansion. This will increase ease of doing business, and can largely contribute to the GDP.

All in all, the future holds great promise for all of us; and I’m excited to see how the Finance Ministry enables these stakeholders from the textiles and apparel sector.

Kunal Kislay, Integration Wizards Solutions

Indian startups are the torchbearers for innovation in the country. With the introduction of new schemes and policies as well as changes in the tax structure, 2021 witnessed the proliferation of tech startups. Indian startups also raised larger financing rounds compared to previous years. The pace of growth signals the immense potential of the domestic market.

The upcoming budget must equate with the momentum at which these startups are progressing. We expect further developments to Make in India and Digital India initiatives in order to establish India as a deep-tech hub. As digital adoption and transformation accelerate, Budget 2022 needs to focus on building a strong IT and internet infrastructure as well.

On the other hand, the MSMEs sector has been one of the most vulnerable sectors during the pandemic. The focal point while preparing Budget 2022 should be devising a robust growth map to revive the economy thumped by COVID-19. MSMEs are a key contributor to the country’s GDP and employment. We expect Budget 2022 to provide reforms on reduction in GST and the eagerly-awaited tax relief for small businesses.

With the right policy push and resources, the budget can be a real game-changer for the Indian technology and small industry sector. The government should also take steps to reduce the compliance burden in all aspects – taxes, loans, or audits for both sectors.

Kazim Rizvi, Founding Director, The Dialogue

The upcoming budget is going to be critical from the startup’s viewpoint. The third wave of a pandemic might disrupt the business activities again, especially the manufacturing division, therefore, there would be a heavy reliance on the budget to give these startups much-needed relief. The startups would be looking for ease and simplification in sector-specific regulations and compliances to give them certainty and cost-saving opportunities. Further, these startups would also be hoping for much-needed impetus in form of tax exemptions and incentives along with the resolution of issues relating to GST credits. The budget should give importance to the healthcare startups and may provide certain relief in the form of reduction of GST and investing in the R&D for this already stressed sector. Similarly, clearing the uncertainty in the pending crypto regulation would also support the startups operating in this sphere.

Startups are the enabler of opportunities and transform a job seeker into a job provider. These startups are going to play a crucial role in India’s digital growth while creating employment opportunities and the government must support the ecosystem and help them achieve success. The evolving business models must be taken into account while crafting policy decisions. For these startups, funding is one of the major issues. Simplifying funding routes and creating a business-friendly environment would help them attract foreign investors increase India’s ease of doing business and help them compete with global players. The government may also focus on bringing the startups into the global supply chain network and further invest in enhancing domestic research and innovation capabilities.

Sameer Aggarwal, founder and CEO, RevFin

EV financing will become the biggest enabler for EV adoption in the next few years. Attractive economics and push by governments have already increased the demand for EVs substantially, however, the Commercial EV segment, which is expected to be a key growth vertical is faced with a lack of financing options, hence remaining the biggest challenge. The industry has the potential to grow to USD 150 billion by 2030, hence the Finance Minister’s attention to ease accessibility to financing, particularly for the unbanked will do good to the segment.” says Founder & CEO Sameer Aggarwal, of RevFin Services – a financial technology (FinTech) digital lending platform focused at increasing EVs’ adoption.

Also Read:

Budget 2022: what does the industry want # 2

Budget 2022: what does the industry want # 3

Rahul Tikoo, Managing Director, Huntsman India

Against the backdrop of the pandemic and an economy facing some headwinds, we look forward to a well-rounded and growth-oriented holistic budget from the Hon’ble Finance Minister. This budget should embrace all sectors through various growth measures that will boost economic activity.

Last year, the speciality chemicals industry was amongst few sectors that successfully navigated through the Covid-19 induced slowdown. We expect that the industry will continue to grow this year led by sustained growth through fast urbanization, evolving consumption patterns, along increasing per capita income.

Recognizing the potential of this sector, the government has already outlined a strategy in line with its call for an ‘Aatmanirbhar Bharat’, and we hope that efforts to improve the competitiveness of the industry shall continue to be on the economic agenda. All policy initiatives should be aimed at establishing India as a differentiated global manufacturing hub.

In 2022, Huntsman will continue to focus on sustainable growth through innovation, developing new application technologies through research-led programs. We will continue to ramp up manufacturing in India and cater to rising domestic and export demand.

Neeraj Dhawan, Managing Director, Experian India

Measures for SME lending to accelerate and succeed: Helping MSMEs build a good credit line and a credit history is the need of the hour. A good credit line will help them with quick and easy access to secured credit, also assuring the lenders such as banks on the risk they will be underwriting. For this purpose, providing Credit Bureaus with access to utility bills data, cash flows and invoices data, income tax data, and GST and expanding the scope of the Bureau data to include alternate data will be effective steps to scale up credit access to MSMEs. Mandating Permanent Account Number (PAN) for all commercial reporting to Credit Bureaus is a necessary step helping build credit history that the government could consider bringing to effect.

Allow deduction for expenditure of covid treatment who do not have health insurance: The government should provide tax relief to the people who are paying for medical treatment of Covid-19 on their own. Extended tax relief should be provided for the expenditure on medical treatment of the covid affected to those who didn’t have medical insurance. These individuals have carried the devastating financial impact of Covid-19 on their own.

Optimizing tax slabs for the salaried taxpayer: The expectation of citizens from the upcoming budget remains high. The suggestion that is already in the circles for the government to consider increasing the annual tax deduction limit for repayment of home loan principal under Section 80C of the Income Tax act will be a good step forward. Increasing it from the current cap of INR 2 lakhs to 5 lakhs will provide huge benefits to the salaried taxpayer and at the same time boost the real estate industry with increased housing demand. Further adjusting tax slabs with the increase in other deductions can help the salaried taxpayer, specifically the below INR 50 lakhs per annum bracket with more money in hand.

Measures for digital skilling and technology incubation: The digital payment industry is playing an influential role in ushering transparency and formalization of the economy. To further promote the industry by supporting new business deployment solutions the government could consider incentivizing Venture Capitalists Private Equity players and other investors to fund Research & Development and technology infrastructure up-gradation in India.

Measures to propel and encourage fintech that are serving the under-credited: A large population of India in the likes of the blue-collared workers, construction workers and house-helps who don’t fall under the formal employment segment are in need of access to credit. Helping this under-credited segment with access to unsecured loans provided by certain fintech will provide a significant domino effect for the entire upliftment of the society and the economy at large. The government should consider providing incentives to this fintech that are lending to the under-credited to encourage more fintech to serve this segment and also effectively manage the risk being underwritten.  

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Taazakhabar News Bureau
Taazakhabar News Bureau
Taazakhabar News Bureau is a team of seasoned journalists led by Neeraj Mahajan. Trusted by millions readers worldwide.


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