The latest union budget offered a major boost for the healthcare and digital payments sectors, as well as support to the startup and gig worker ecosystem. In her speech, finance minister Nirmala Sitharaman announced several measures for startups, including incentives for one person companies and tax benefits.
Here’s what stakeholders across key sectors in the startup and technology sectors had to say about the changes:
Bhavish Aggarwal, chairman and CEO, Ola
Ola welcomes a progressive and growth-oriented Budget. Measures under Atma Nirbhar Mission will help create global champions in automobiles, financial services and technology and foster an environment where India becomes integral to global supply chains. Increased investment in insurance & infrastructure will open new avenues of capital. Improvement in ease of business will transform India into a global innovation hub. We strongly support the government’s clean air focus with our EV plans that will accelerate the world’s transition to sustainable mobility.
Venkatraman Narayanan, managing director and CFO, Happiest Minds
The Budget has maintained continuity and consistency and in line with the themes of ease of doing business, simplification, transparency and managing effective delivery through digital channels. As a digital company hearing announcements around leveraging digital technologies like video conferencing, e-assessments, e-invoicing, AI and ML for governance, incentives for digital transactions, are heartening.
Honorable FM has maintained the course on simplification and consolidation of laws with a specific focus on rewarding the honest. The aspect of supporting the economy with increased spends on Infra, health, farming and education are welcome. Inclusion and women empowerment into the larger Aatmanirbhar objectives of the government are laudable. I see lots of support for the economy and a V-shaped recovery for the economy. From the IT industry perspective, quite a few relaxations on compliance, laws and also support came from the government during the pandemic.
Vamsi Krishna, CEO and co-founder, Vedantu
The National Education Policy has been a strategic move towards guiding the development of India’s education. To strengthen the policy further, this union Budget is focusing on initiatives like National Digital Educational Architecture (NDEA), which will provide a diverse education eco-system for the development of digital infrastructure, educational planning, governance, and administrative activities...
Further, I would like to see more investments and budget allocation go into the education sector to enhance it with more trending technologies which will make education accessible to students in the farthest corners of the country.
Keshab Panda, CEO and managing director, L&T Technology Services
The move to provide greater impetus to India’s manufacturing sector with an 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 were classified under the six pillars of focus for this year’s union Budget. Unlike last year where explicit mention to initiatives such as the 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.
Vivek Sharma, managing director - India, Lenovo Data Centre Group
This is a pro-growth, pro-technology budget with a vision to disinvest where required and re-energize infrastructure, healthcare, banking, and agriculture sectors through numerous employment and capital generating reforms. There is a strong focus on Digital India, be it through setting a fintech hub at GIFT city, enhancing digital payments and use of AI, ML etc in governance, or making tax appellates faceless and tech-enabled – all provide a solid foundation for a forward-looking data-economy.
Dinesh Aggarwal, joint managing director, Panasonic Life Solutions
As was expected, the union Budget 2021 has focused on our nation’s growth and brings a very positive sentiment to facilitate the economic reset… Specifically for the electrical construction materials industry, reduction of import duties on steel flats and copper scrap, long-awaited revision in the labor laws (including women being allowed to work in night shifts) are some of the significant steps that will create a strong export-led economy in the Manufacturing sector.
With special sops in renewable energy, specifically for solar, the government aims to encourage domestic production by ensuring a uniform policy across the states. Thus, energy generation and domestic solar module capacity will essentially remain a key area of focus. One expected similar encouragement for EV adoption in India, but perhaps it was not overtly mentioned in the FM's Budget speech.
Focusing on rebuilding India, this is a very positive Budget for the industry as the PLI scheme will accelerate growth and encourage global manufacturing companies to create large-scale employment in production and allied areas like product development and design, considering the talent pool which exists across India.
Mike Chen, general manager, TCL India
We do welcome the recent PLI scheme of the government. However, we need to ease up the duty imposed on raw materials keeping in mind the make in India thought. We should also be getting added incentives so that transformative measures can be taken. The industry contributes 25% of the country's GDP.
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 by the finance minister 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.
Deepak MV, co-founder, Etrio Automobiles
From an overall auto industry standpoint, the soft step towards the introduction of a voluntary scrappage policy is a welcome move. However, driving the implementation of the same through incentives/ disincentives and the necessary infrastructure is going to be critical. Further, the allocation of Rs 1.97 lacs crore towards PLI along with custom duty increase on components should spur investments in domestic manufacturing. The infrastructure investment focus would definitely drive demand for M&HCVs and construction equipment specifically along with boosting demand for mobility at large.
For the EV industry, it's been a bit of disappointment with no direct mention of any EV focussed initiative or policy including FAME. There were a lot of expectations from the Budget, including ramping up of charging infrastructure, enablement of retail financing for EVs, and moderation of the inverted GST tax structure with lowering taxes on EV input components including battery.
Roopank Chaudhary, chief commercial officer, India and south Asia, Aon
The Budget’s announcement that social security benefits will be extended to gig workers and platform workers and that the government also proposed setting up of a portal to collect information on gig workers, is likely to be a welcome move for the new economy workforce. The evolution of the Gig Economy is a testament to the changing dynamics of the workplace and how the future of work is playing out. A larger percentage of organizations in India plan on increasing the amount of work given to gig workers in the next 2-5 years and this could be an important enabling factor in the relationship between employers and gig workers.
The startup ecosystem also gets a much-needed boost as the tax holiday for these businesses was extended by one more year to March 2022 in the budget, as well as the capital gains exemption given to start-ups also extended by a year more. Such moves are expected to positively impact the sentiment in the start-up sector and act as an incentive.
Paavan Nanda, co-founder, WinZO Games
The measures announced by the government demonstrate its bullishness towards the startup ecosystem. The extension of long-term capital gains by another year will offer tailwinds to early-stage funding. Extension of tax holiday by one year is also an encouraging offering, however, most of the new-age startups don't start booking profits in the early years. The Budget’s focus on economic development, infrastructure and health will definitely put India back on the growth trajectory after an unprecedented past financial year.
Bhavin Turakhia, co-founder and CEO, Zeta
We welcome the announcement by our honourable finance minister Nirmala Sitharaman to introduce an Rs 1,500 crore-scheme that will provide financial incentives to promote digital mode of payments. This move will help in enhancing financial inclusion and building a contactless economy in the country. The unprecedented pandemic gave digital payments adoption a much-needed boost and this year will be a landmark for India in terms of taking definitive steps towards using the power of digital technologies. We expect that this investment will encourage both Private and Public Sector banks, FIs and fintechs to adopt modern technologies so they can provide future-ready, mobile-first, secure and state-of-the-art digital products and services to customers.
Vinay Bagri, CEO and co-founder, Niyo
The union Budget 2021 has been in the favour of the fintech and startup community. After the last one year of pandemic and the impact it has had on the Fintech sector, the facilitation of a world-class fintech hub at GIFT city is a huge step in providing further growth opportunities to the sector. Given the need for a digital shift with an aim of having a cashless economy, the allocation of Rs 1,500 crore for the promotion of digital payments comes at the right time. The startup sector has been one of the most affected sectors in the pandemic.
The finance ministry’s move to extend tax holidays for startups until March 2022 will offer much-needed relief and boost productivity in the coming future. This along with the decision to allow incorporation of one-person companies will further empower the overall sector, thus leading to innovation as well as the birth of new startups.
The government’s announcement of social security benefits for the gig and platform workers is a first of a kind initiative which will give further impetus to financial inclusion.
The announcement of 'One Nation One Ration Card' for migrant workers and provision of minimum wages to all categories including women, will further contribute in strengthening the migrant workers’ position in the economy by providing them with the required economic support thus safeguarding their future.
Lalit Kehre, co-founder, Groww
The income tax filing exemption granted to senior citizens, who rely on only pension and interest income, will significantly reduce their tax compliance burden. The announcement of a faceless dispute resolution system should help taxpayers by fast-tracking the resolution process. The pre-filled capital gains and interest income in ITRs will make income tax filing easier for retail investors. Overall, these measures announced in the Budget will simplify the lives of small taxpayers and are welcome.
