Budget 2021 expectations reflect core digital push, startup ecosystem, tax rationalisation

Union Budget 2021 will be the first Budget in the post-pandemic economy and coming after a very difficult year, therefore, a lot of expectations are set, especially by business owners and entrepreneurs who have been facing a lot of challenges in running their company. Finance Minister Nirmala Sitharaman has promised a “never before” Union Budget and the industry has high expectations that it will live up to that.

Himanshu Arya, Founder and CEO, Grapes Digital:

“2020 has been an unprecedented year for both the Global and Indian economy. The COVID-19 pandemic has pushed the Indian GDP in a negative state, but, at the same time, there is no denying that the pandemic has accelerated the digital push across the country. Digital has become the core of every business model in the country. The Government is also working effectively to enhance the contribution of the digital economy to 20 per cent of the GDP in the next five years. India is ready to join the world in this thrilling digital-ready race, which will help boost the Indian Economy and stimulate job creation. In this year’s Budget, we expect the Government to lower the income tax slabs for businesses to increase profitability and future investments. GST should be rationalised to 12-15 per cent to revive demand, and at the same time, there is a need to streamline GST/ Income Tax/ E-Invoicing, etc., to promote the ease of doing business.”

Rajesh Ramakrishnan, Managing Director, Perfetti Van Melle India:

“2020 has been an unprecedented year, which was interesting, challenging yet enriching in many ways. It had far reaching impact on businesses and individuals, and our business was no exception. There are some early signs of recovery and this needs to be sustained in 2021. One of the key tasks of the Budget 2021 would be to fuel consumer demand and further revive the economy. The Government’s focus needs to be on increasing the rural spending and this will further boost rural consumption of FMCG products. Adequate investment in infrastructure, agriculture and social sectors will also further drive the pace of recovery.”

Sai Srinivas, Co-founder and CEO, Mobile Premier League:

“We are expecting that the Finance Minister will focus on watering the green shoots. While the current financial year has been almost a washout for most sectors, the mobile gaming sector saw one of its fastest growth periods. Esports and gaming are multi-billion dollar propositions in countries worldwide. Taking note of the potential of the gaming industry, the Honourable Prime Minister had also noted that India should lead the international digital gaming sector. We believe that this is eminently possible with some support from the Government in the Financial Budget:

• There is a tremendous opportunity to support the game developers in India to make India the hub of gaming in the future. With this in mind, we would look forward to budget allocation for the creation of a Gaming Fund, which would incentivise more developers to access seed capital to set up gaming development companies.
• Increase funds into the Start-Up India initiative that would encourage more gaming start-ups to flourish in the Country, creating healthy competition that would yield more significant innovation and ingenuity, fuelling the industry
• There is an almost insatiable demand for new games. While we have a significant pool of skilled workforce, we should plan for the burgeoning requirement by directing funds into education and skilling programs to support the next generation of coders, designers.

The growth of the gaming eco-system has a multiplier effect in terms of Government revenue and employment generation, not to mention the long-term aspiration of becoming the ‘game developer to the world’ much like India is the ‘pharmacy to the world’.”

Ankit Agarwal, Founder, Do Your Thng:

“The Media and Entertainment industry is at the cusp of reinvention, courtesy the pandemic which the world faced in 2020. The WFH phenomenon, which is here to stay, accelerated shifts in consumer behaviour. The ensuing digital disruption helped the industry reach tipping points earlier than estimated. It is at the cusp of a humongous potential, much of it untapped. I sincerely hope the Government recognises the above fact and provides more money in the hands of citizens. It’s all but expected that Budget 2021 will prioritise spending on a few key areas that bolster our battered economy. But we feel, despite the stretched finances the Government faces at the moment, addressing the M&E segment will result in higher consumption, fueling growth. The concomitant creations of more jobs will become another pillar to reinforce the entire economy.”

Haruto Iwata, Managing Director, Fujifilm India:

“With the pandemic giving a wake-up-call to the healthcare sector, we expect the Budget 2021 to create new horizons for the medical sector. We believe that the Government of India will bring in new policies that will cater to providing a comprehensive and integrated healthcare ecosystem in the country and support the patients to get access to high-quality and cost-effective care. Investments in new medical care technologies are and will be at the forefront of combating COVID-19 and will also help us pave the way for any future uncertainty.”

Vaibhav Tolia, COO, Dukaan App:

“2020 has been a tough year for everyone, but the worst affected segment has been SMBs across the country. They were forced into lockdowns multiple times and while their businesses were primarily offline. Our expectation from Budget 2021 is to empower these businesses with financial support as well as weather-proof them from black swan events.

Digital first SMBs can weather such events and thrive in the consumer economy, which is quickly moving online. Regulatory framework & compliances need to be thought from a SMB perspective, making it easier for them to do their business digitally and not be dependent on large e-commerce providers.

The Government should also focus on incentivising businesses that are willing to transition to the digital era. India has millions of entrepreneurs fueling one of the fastest growing GDP globally, digital first should become the precursor to Digital India.”

Ankit Oberoi, CEO, AdPushup:

“The last year has been nothing short of an uphill battle for the media sector. While on yhe one side they saw a sizable increase in traffic and content serving infrastructure fee, the advertising budgets shrank and saw higher concentration with the duopoly. The industry very much needs policy and tax policy changes in the form of relaxation of GST regulation, increasing tax incentives, as well as recognition of export of knowledge happening from the media section to readers worldwide.”

Vikram Agarwal, Managing Director, Cornitos:

“The Government should reduce Individual Income Tax so that the individual spending increases. Currently, there is up to 47% Income Tax on Individuals and 18% GST on products, hence paying 65% Taxes in totality.

Secondly, GST Categories in food products have not much clarity and don’t cover all types of products. The Government must make the GST Categories vast and clear. Categories 1905 & 2106 have a lot of confusion and hence, the Industry is penalised by paying a higher slab of GST Tax, which can be reduced.

To position India as the food factory to the world and promote value-added processed food products abroad, the 2021 Budget should provide a higher allocation of funds for food processing units and tax incentives for exports of food items. To facilitate investment in the food processing industry, any additional capital investment of more than 50 per cent of the existing book value of plant and machinery should be treated as a new investment and should also be eligible for a five-year tax holiday, under section 80IB(11A).”

Sonam Shah, Founder and CEO, Treize Communications:

“The Budget should focus more on reviving the country’s economy and bringing in relief for SMEs, MSMEs, and entrepreneurial business models.

I would love to see this Budget favouring women in businesses. There should be tax benefits for women entrepreneurs as well as incentives for women-led businesses that are paying timely taxes. The government should also offer incentives for homegrown businesses that are paying tax on time. Easing the taxpayer’s load will be a welcome and supportive change.

The tax procedures need to be made simpler as there are many challenges cropping up for independent small businesses across India. While digitisation is important, we, in India, have a lot of businesses that are run by individuals who cannot easily adapt to the new ways of digital working. There is an overburden in compliance, which increases overhead costs for any business. There should be a substitute method for this too.

Also, with payments and cash flow being affected badly this year, strict norms and policies in late and default payments should be set up and implemented. This increases workflow capital, which is needed to keep business running.”

Ravi Vishvanathan, CFO, PayMate:

“The 2021 Budget should be a macro-economic big-ticket budget, with less emphasis on incrementalism and more attention to economy boosters and growth drivers. The fiscal deficit should be looked at from a 3-5 year perspective and the Finance Minister should be comfortable working with a higher fiscal deficit. The momentum in Q3 FY2021 needs to be built on and stimulus should be given to the economy. Inflation can be targeted through supply-side measures and the poor can be supported via direct transfer benefits. The global upheaval due to the pandemic is both a challenge and an opportunity and the FM has a glorious opportunity on hand to shift gears permanently.

Massive incentives should be given to the small business sector as they are the backbone for employment generation. Consumption is the key to sustained growth and a strong growth backed by robust employment will ensure that we set the base for a sustainable period of double-digit growth.”

Siddharth Grover, Director, Groversons Group:

“Being an old and trusted brand in the Indian Innerwear industry, we expect the Government to allocate good amount of funds in the retail segment, as most of the retailers are currently crippled with short availability of finances. Adding to this, the Government should also focus on reducing the corporate tax rate, which is currently 30%, this will result in improving the financial health of retailers. Lastly, we also expect the FM to throw some light on the service tax, which has always been a major concern for retail marketers. We all suffered huge losses due to the pandemic, let’s hope this Budget 2021 will bring some positive news for all the sectors.”

Chirag Jain, CEO, Get My Parking:

“The mobility industry is going through rapid transformation, but that change needs to be reflected by the Government infrastructure. Government parking lots are an underutilised real estate, which need funds for upgrading into smart mobility hubs. These hubs can then be the platform for movement of people, goods, and services. From e-commerce delivery and logistic warehousing to EV charging and other automotive services – they all can be built on top of the Government parking infra by private players – provided that these spaces have more amenities like water, sewage, electricity, security. A special fund needs to be dedicated for transforming 100 parking lots into smart mobility hubs for each Tier 1 city.”

Suhas Rajkumar, Founder, Simple Energy:

“Amidst the pandemic, a lot is expected from the Government in terms of the support they can give to the auto industry. EV manufacturers would certainly hope for few policy changes, ease of finance, and reduction of GST slabs from the upcoming Union Budget. These costs eventually increase the cost of manufacturing and of owning the EV, which again slows down its adaption. Undoubtedly, the Government has shown its support with various initiatives to boost the usage and adaption of EV like the National Electric Mobility Mission plan 2020, capital subsidies under FAME, etc to name a few, and we're expecting them to take more supportive steps on the policy framework which will help the EV sector in long term.”

Bunisha Khajamohideen, Co-Founder, Terabite Ekarts:

“The pandemic had made the start-ups see a lot of ups and downs in the previous year. It indeed pushed us to become self-sustainable. The Government has taken a lot of measures to empower street vendors. But we also expect some more norms and relaxation like the single window clearance for the street vendors to get the compliances done and boost the street-commerce vertical as the nation is filled with lakhs of street vendors across the various fields like food and beverage topping the list. This initiative will certainly see the growth in the street food-commerce and ease their lives too.”

Sharad Bhatt, CFO, EolStocks.com:

“This Budget will surely have a shift of focus toward boosting the digital economy of Tier 2, 3, 4 cities and rural areas in the country, which saw showed increased spending on e-commerce and increased penetration of mobile phones during the pandemic. Since most businesses are compelled to take themselves online, this years’ Budget should have allocations for making Internet services better and bridging the gap between digital haves and digital have-nots.

Being a tech-start-up, we expect more reforms on the ease-of-doing-business front, better tax infrastructure, and more push to the Make-In-India initiative.”

Alok Bansal, Country Head, India at Visionet:

“With technological disruption gradually becoming a catalyst for the rise of MSMEs and start-ups today, it is expected that the Government will make the necessary investments in technology hubs, which in turn will help in strengthening emerging technologies like AI, machine learning, and the Internet of Things (IoT). As the country is amidst a boom in digital technology adoption, this year’s Union Budget needs to make way for relevant measures to ensure that the right amount of thrust is given to tech build-up, favourable tax policies, and other opportunities will spell progress for the MSMEs.

The government also needs to make substantial efforts to set up a robust digital ecosystem for encouraging budding entrepreneurs and introduce measures that make it even easier to conduct business in India. This will be highly beneficial for start-ups and SMEs.”

Kausshal Dugarr, Founder and CEO, Teabox:

“With the entire tea industry looking to pivot online in a post-pandemic world, the Government should focus on increasing the pace of digitisation in semi-urban, non-urban or Tier 2 & 3 cities across the country by a faster roll-out of 5G services this year. This shall enable direct-to-consumer companies like us gain faster access to these untapped markets, expand the distribution channels and build on our customer base. A reduction in personal income tax should help put more money in consumers' hands and improve overall consumer sentiment.

The taxation structure needs a relook, wherein the Government must ensure the start-ups in the sector can be provided bigger tax breaks so that they can invest in creating a vibrant online ecosystem; whereby more value and efficiency is created. More clarity on e-commerce policies and a Budget that addresses regularisation of the digital economy & an adequate information communication technology (ICT) infrastructure to support the robust growth of start-up economy will set the pace for the year ahead.”

Rahul Aggarwal, Founder and CEO, Coffeeza:

“The one thing that we hope to see in the new Budget is a lower GST on small home appliances category, which is currently at 18%. If the GST rate gets lowered (to say 12%), such appliances will be easier to buy, and more consumers will be able to afford these products, making their quality of life better.”