Industry Reactions on Union Budget 2021-22
Union Budget 2021 India: In the midst of an economic slowdown induced by the ongoing pandemic, the Hon’ble Finance Minister Nirmala Sitharaman presented Union Budget 2021- 22 on February 1 in Parliament. Here are Industry reactions on the same…
Kumar Mayank, Founder – Zimyo
The Union Budget this year has attracted my interest explicitly. As a CEO of a Startup, I had a lot of expectations from the 2021-22 Budget and I must say that it has lived up to my expectations. Something that bothers one and all is tax filing, and our government has extended exemptions on the same taking into consideration ‘Startups’ specifically. This is going to boost the economy and enable new ventures to build up. A sharp increase in the government’s capital expenditure to Rs.5.54 Lakh crore and new labor codes are surely going to make a significant difference in the employment graph of the country. The grant of INR 35000 cr for COVID-19 vaccine and the commitment to the pneumococcal vaccine to be rolled out nationwide is going to ensure the health and well-being of the current as well as the future generation.
The factor that took my attention is that Dividends will be exempted from TDS. Advance tax liability on dividend income will arise only after the declaration or payment of the dividend. For Foreign Investors – a lower treaty rate benefit will be given and also, the rules to remove the hardship of Double Taxation for NRIs. Apart from Indians, the NRIs have also been allowed to operate One Person Companies (OPCs) in India. This I see as a step towards increasing revenue and on the other hand enabling and empowering people to live their dreams and contribute to the financial growth of the nation. My analysis of the Budget concludes that there is a lot of motivation and support to new businesses to lead the nation and the country is certainly going to be ‘Vocal for Local’.
Anish Sarkar, CEO, Sodexo Benefits and Rewards Services, India
As a leader in digital employee benefits, we aim to improve the ‘Quality of Life’ of our clients, consumers and merchant partners. Sodexo’s solutions help corporates extend new-age benefits related to Health and Wellness, Learning and Development and Work From Home, for employees digitally which has an even higher significance in the era of hybrid workplaces. The broad thrust of the budget is on driving growth; Sodexo’s suite of innovative solutions are focussed on inclusive employee development and digital infrastructure creation
Hitesh Jirawla, Founder CEO, Cubictree
The FM presented a digital Budget, a yet another first of India. It is a small step but goes to show the intent of this govt to move to digital transformation in every way possible. Indian Courts have been under tremendous pressure with limited availability of judges. Longer litigation results in higher costs, procedural hassles that consumers and companies suffer. The proposed MCA21 Version 3.0 will roll out e-scrutiny and other compliance management initiatives thereby bringing down the legal costs for companies and individuals. Use of deep tech, will over time impact the judgement delivery thereby making it faster and for some standard cases, there is a possibility to introduce an element of automation in documentation and other legal processes. We believe the govt has taken a lead in addressing the problems that currently ails the judiciary system in our country. Over time, India may see fast closer of matters and justice served to the people who have been waiting a long time.
Pankit Desai, Co-founder CEO, Sequretek
The much-awaited Budget 2021 has provided a significant push for healthcare, agriculture and rural economy, but unfortunately nothing concrete for startups and the surrounding ecosystem. For the majority of startups, demand remains the same, nothing changes, its business as usual. Forming a one-person company doesn’t help startups whatsoever unless they want startups to form a single person company. There is some push for fintech and startups from this sector will stand to benefit, however, the budget did not share anything substantial in terms of ease of doing business, compliance or GST taxation that would make life any different for a cybersecurity company like ours. I am hoping that the stimulus and other investments that allow the economy to do well, indirectly will support us as we finally serve that economy in some shape and form through our customers.
Pavan Adipuram, Co-founder CEO, ChitMonks
The Budget this year was riding high on expectations from taxpayers and businesses. The FM has tried her best to deliver on a majority of parameters. It is heartening that the much talked about COVID cess wasn’t introduced, neither any dramatic increase in taxation for the businesses. For a digital-first company like ours, the proposal of Rs 1500 crore to incentivize digital payments will accelerate the financial technologies sector growth. In investment instruments like Chit Funds, Mutual Funds, online payments, more companies are expected to move to 100% digital payments mode which will ensure further transparency and confidence on individuals and it will address the problem of any scams running that take advantage of innocent individuals. However, the devil would be in the details. We look forward to the details of this proposed scheme as it will tell us how the incentives will work for the companies and individuals.
Kumar Ritesh, Founder CEO, CYFIRMA
This is one of the most business-friendly Union Budget we have seen in a while, and this is rightly so given the urgent need for a strong economic recovery. The initiatives to ease the setting up of new companies bode well for the technology sector. This will promote an even greater entrepreneurial culture and put India squarely on the global map of technology innovation. Given India’s young, dynamic and tech-savvy workforce, we should expect more companies choosing India as a base to leverage on our vast talent. India’s fast growing middle-class population should also be a magnet for businesses seeking to tap on the underserved market here.
Further, the Finance Minister’s announcement that companies will receive RS1500 crore to encourage their adoption of digital payments will go a long way to promote Fintech innovation, and more importantly, give millions of unbanked Indians the opportunity to participate in the financial system. With digital payments becoming mainstream, the government should also start looking at uplifting cybersecurity awareness and education among businesses as well as consumers. This way, the twin engines of growth – innovation and digitalization – can be sustainable in the long run.
Anukumar Ramesh, Co-founder CEO, LegallyOne
\Bad bank set up is a real bad idea. The FM in consultation with other regulatory body didn’t address the source of the problem which loans turning into NPAs. Even if banks transfer NPAs to the Bad Bank but they will continue lending. There is no end-to-end governance model in place to prevent such incidents. We feel the idea is right now half baked and the framework is incomplete. Picking up a problem area without reaching the source won’t be beneficial for the banks in the long run.
Bhaskar Majumdar, Managing Partner, Unicorn India Ventures
The Union Budget 2021 delivered on many parameters like healthcare, infrastructure, education, banking reforms but the distant cousin — startups — were more or less left out of the key announcements. The tax holiday and LTCG exemption are definitive positive initiatives but their impact remains limited to DPIIT recognised startups (tax break exemption). The funding in the startup sectors currently comes from foreign funds, so while LTCG will give boost to domestic money finding its way into the sector, the numbers still won’t match up to the scale where impact can be made.
However, we can’t ignore the fact that the govt has rolled out many positive initiatives outside the Budget like Rs 1,000 crore seed fund announced recently and even setting up OPC will give a boost to new startups getting launched. It will also give them credibility in raising seed or angel money. The simplification of zero return GST and filled tax returns is overall good for the small entrepreneur. The digitisation of the Census is in the right direction of overall digitising all government processes as this would enable census within months and not years as it takes now. Overall, a good budget but not much for the startup community.
