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:
Manish Rathi, Founder & CEO, IntrCity
The intercity mobility segment has seen a consistent month-on-month growth after the 2nd wave. The third wave’s influence has been felt, and some trip plans have been postponed, particularly in states with higher levels of dispersion. The silver lining for next year is that, because of the government of India’s rapid vaccination effort, travellers are confident in travelling to locations, and the industry is looking forward to normalcy as COVID daily cases reduce again.
We are hopeful that in the forthcoming budget, stronger infrastructure initiatives will be incorporated into the National Infrastructure Pipeline. The mobility needs of smart cities will lead to the next wave of inter-city mobility growth and enable smooth connectivity with the nearest metro city, besides connectivity between those cities. Better multiple boarding infrastructure in the city connected to SmartBus and digital booking will drive this growth and power the economic growth of these cities.
2021 was a pivotal event in the transition to electric mobility within the intracity segment. The government should implement a few more favourable regulations to boost green mobility. Additional policy impetus should be provided for all forms of green fuel and their enablement for inter-city mobility: batteries with longer distance capability to power EVs, charging infrastructure, and highway CNG stations.
Besides, they should also monitor the implementation of the All-India Tourist Permit for Commercial Vehicles, ensuring that it is accepted by all state RTOs
Raj Mehta, Founder, Greta Electric Scooters and MD, Raj Electromotives
Given the Government’s ambitious goal to be zero-emission by 2070, EV is the way forward; we anticipate a further boost for this sector in the forthcoming Budget. What is needed is incentivization from the Government to make EV the mode of choice for the end consumers. That could come in terms of tax relief, subsidizing the offering to name a few.
The recent introduction of the PLI scheme for the EV sector was a welcome step. It complements the FAME scheme well in encouraging us to develop new technologies needed to grow and evolve. The scheme’s recent induction of 115 automobile and automobile-related ancillary companies promises increased localization and accelerated investments in the EV ecosystem – a much-needed support system to enable our growth story. Though I still feel the subsidies here should be relooked at to get more entrepreneurs in the fold.
The lack of charging station infrastructure and battery supply, which is currently heavily dependent on imports, are two growth bottlenecks for the sector. We need the Government to help with solutions that will clear this bottleneck and pave the way for EVs’ acceptability.
Incentivizing Auto Component manufacturers to add EV components to their lineup would be another as more availability of localized parts will push up growth of the sector and help bring down both production timelines and cost for the EV’S acceptability.
Given the current dependence of the EV sector on imports, a reduction in import duties and GST would be a welcome relief.
Reducing GST on components that are meant to be used in the production of EV’s would be one step to help bring down the cost of production and prices of EV’s. Easing the GST refund process would be another step that would help improve efficiency in operations.
Finally, easing the export process will encourage the EV manufacturers to look at export as an element of their go-to-market strategy.
Rupesh Jain, Founder & CEO of Candere by Kalyan jewellers:
As a JewelTech, Candere has its focus set on getting the trusted next-door jeweller experience and delighting customers across geographies using Technology and Personalisation. We are in sync with the industry asks and strongly believe that the Indian Jewellery sector, especially e-commerce can propel to greater heights by 2025.
We hope to see positive and encouraging signals on the following fronts:
- Reduction of GST for the industry to 1.25%
- Raise transaction limits to INR 5 lakhs without PAN Card
- Encourage e-commerce players and support B2C cross-border sales with lower duties
- Leverage on the existing BIS and hallmarking network and set collection centres for building out the old gold collection centres
- Permit Bank and NBFC financing on purchase of jewellery
Pradip Seth – Founder & CEO, S-Ancial
The rate of flow of capital through the economy is facilitated by the financial industry and it is critical for the growth of the economy. In particular, we believe that emerging fintech companies of different hues will contribute significantly to hyper-growth in the financial sector. We look forward to regulatory clarity and policy support from the government in this regard.
Fintech in India has a current value of USD 31 billion and is expected to reach USD 84 billion by 2025 at a CAGR of 22%. India ranked No. 1 on the list of real-time payments with 25.5 billion transactions, according to ACI Worldwide.
Regulatory encouragement has contributed to the rapid growth of India’s fintech industry. In its budget policies, as well as in policy decisions made by regulators, the government supports innovation. Demonetisation, tax rebates, low transaction costs, and reducing the merchant discount rate on all low-value payments illustrate this trend, speeding up the transition from paper to electronic payments. Emerging technology like Blockchain is one such example.
RBI had launched a Regulatory Sandbox in 2019 to promote fintech innovations. It has introduced three cohorts so far. There are six and eight startups shortlisted for the first and second cohorts, respectively, on themes of cross-border payments and retail payments. A separate Fintech department has been set up by the RBI to oversee innovation and regulations related to fintech. Furthermore, the department is expected to monitor fast-emerging crypto segments such as DeFi, NFTs, and Metaverse as well as consumers’ data privacy, consumer rights, and data localisation.
As digital payments grow, digital data grows as well. While navigating the digital financial ecosystem (spending, transferring money, borrowing), every customer leaves a digital footprint. To avoid the risk of fraud in absence of a data privacy law, RBI has put a ‘no storage of card data’ rule that applies to all players in the payment ecosystem. This has ‘tokenisation’ challenges to overcome and market players have been pushing for an extension. Such issues as cross-border payments, more attention to DLT (Distributed ledger technology), and securing consumer data and privacy must be addressed. We expect the upcoming budget to bring more clarity in the regulatory framework and policy support for the fintech companies in order to avoid incidents of confusing compliance such as the PayPal incident.
Shrikant Shitole, President – CREDAI MCHI-KDU & Managing Director – Tycoons Group
We are hopeful that this year’s Union Budget 2022-23 will announce certain policy relaxations that can help further boost the real estate industry. For the year 2022, we expect the government to continue providing low bank interest rates on home loans to sustain a positive outlook of the real estate sector. Increasing home interest rate tax deduction from the current ceiling of Rs 2 lakh to Rs 5 lakh can provide the necessary impetus required in the industry. We expect active participation from banks for project financing and hope for the government’s intervention to help avail the funding from banks and NBFCs. Furthermore, revised and lowered GST on raw materials such as cement and steel can be a crucial move as it will help stabilise the property prices.
We also hope that the affordable housing definition will be changed from 60 Sq Mtr to 90 Sq Mtr. for metro cities, and re-introduction of GST with an input tax credit on under-construction properties can be addressed through the budget.
Rohan Khatau, Director, CCI Projects Pvt. Ltd. – Rivali Park
To sustain the positive outlook of the real estate sector in this new year, we are hopeful that the Union Budget of 2022 will usher in various tax benefits and rapid infrastructure development to magnify real estate in the MMR market. As the sector has exhibited strong growth and resilience through unprecedented times, it is expected that the budget focuses on foreign and domestic investments while facilitating policy support, which brings in further reduction in the home loan interest rates. Waivers on GST rates for under-construction properties and incentives are expected to enable private investment in the affordable housing sector. With various financial aids such as the SWAMIH Fund initiative, stamp duty reductions, and low repo rates during the year 2021, the sector has flourished exceptionally. To strengthen this momentum, we anticipate significant and beneficial reforms for the sector overall.
Annanya Sarthak, Co-Founder & CEO of Awign
As a player working with conglomerates and decacorns, listed and unlisted alike, we have seen the industry grow at 2-3x, and we see this growth continuing. The CII has already advised increasing budget allocation for skill development and job creation, and enterprises have started investing in gigification, allowing them to expand into Tier II and III markets.
We see this growth as good because with formalisation comes regulation, with regulation, comes growth, and with growth comes opportunity. As someone who speaks to enterprises and their gig employees on a daily basis, this can only bode well not just for gig, but the entire Indian economy.
As India’s largest player in the space, we feel the space will continue to grow at 2-3x, leading to labour regulations such as social security benefits. The CII has already advised increasing budget allocation for skill development and job creation, and enterprises have also started investing in gigification, which is also helping them footprint Tier-II & 3 markets.
Though the gig economy’s breakneck pace of growth has not as yet been classified as a formal economy, we hope this changes this fiscal year, given gigs are putting food on the table for close to lakhs of the Indian populace, especially the white-collar segment.
All in all, the gig economy will grow how, this will lead to policies and regulations coming in, something that we and our enterprise partners welcome, as it formalises and democratises what has traditionally been viewed as just that – a gig.
Himesh Joshi, CEO & Co-Founder, Ayu Health Hospitals
As the country is gearing up for the third wave of the pandemic, the expectations are for greater budget allocation this year into the healthcare sector primarily for genetic research, aiding technology for early diagnosis in order to boost the capacity of our healthcare system to detect and cure new and emerging diseases in the aftermath of the Covid-19 pandemic. While the schemes like Ayushman Bharath were a step in the right direction, there is scope for amendments in the pricing structure where hospitals can provide high-quality healthcare services without incurring losses and also ease in the issues of delayed payouts to hospitals which are stretching into months for some schemes. The Government could bring in a model to incentivise the private healthcare sector to ramp up infrastructure that could benefit the public at large and set in motion for a strong healthcare system in the country. The government should also work towards ensuring adequate budget allocation towards various government schemes and ensure faster payouts to hospitals, which in turn will incentivize more hospitals to accept these plans.