Pre-Budget Expectations From Corporate India: This Is What Businesses Want In 2020
On February 1st, Union finance minister Nirmala Sitharaman will present her 2nd budget. She had presented her 1st budget just 7 months back.
However, a lot has changed ever since. India’s economic growth has slowed down, infact, slowest in the last 6 years, and the impact is massive.
Auto industry is in shambles, and less jobs are being created.
Corporate India has now come out, and shared what they want from the Govt., when it comes to budget and resource allocations.
Here are some demands and speculations from corporate India:
Mr. Sharad Malhotra, President – Automotive Refinishes and Wood Coatings, Nippon Paint India said, “We expect Budget 2020 to walk a tightrope – there is need to push forward long-pending reforms and revive demand but also be fiscally prudent. With auto industry facing unprecedented slowdown, we are looking forward to demand-side measure that will pull the economy out of slump, provide much-needed relief to the sector and revive consumption. Auto industry is gearing up for implementation of BS-VI norms in 2020 and we are hopeful that demand will crawl back up from second half of the year. We are also hopeful of a lower GST rate for vehicles that will improve consumer sentiment and stimulate demand.”
Mr. Harsha Kadam, CEO & President -Industrial Business, Schaeffler India said, “Most of the industry was expecting the slowdown to happen in 2020 but it came earlier in 2019 itself making it a year of challenges. Through last year’s budget the government proved that it is committed to the growth of the auto industry by the push to green initiatives such as Electric Vehicles and announcement of implementation of emission norms like BSVI. But, we at Schaeffler India are hopeful of the government to announce a clear roadmap and model on the required infrastructure to support these initiatives in this year’s budget. While the centre took multiple steps to boost government spending on infrastructure, we believe that special attention and tax reforms to revitalize consumer spending will augur well for the economy. For component manufacturer’s like us stability in steel prices is also important so that growth trajectory can be sustained, and profit can be passed on to end consumers/customers. We are approaching the budget with high optimism..”
CP Gurnani, Managing Director & Chief Executive Officer, Tech Mahindra, said, “Realizing the dream of India becoming a 5 Trillion Dollar economy by 2025 truly outlines the ‘art of possible’ and depends largely on the choices we make. Digital continues to be the cornerstone of India’s strategy, therefore, sharpening focus on enhancing skills in new age technologies like 5G, improving the quality of education, and nurturing the start-up ecosystem are some key measures that will accelerate India’s IT exports and will help sustain its global competitiveness. As part of the Union Budget 2020, we hope to see focused initiatives by the government that will help India fortify its digital growth momentum and contribute to the global growth story. With 1.3 billion consumers and a large talent base including over 400 million millennials, India can play a key role in scripting a unique success story amidst the global economic slowdown.”
Rajiv Bhalla, Managing Director, Barco India said, “As the country gears up for the Union Budget on Feb 1, the Indian economy is dealing with several issues including a drop in GDP, liquidity crunch, rising inflation and low tax revenue. While the Centre took multiple measures to boost the slowing economy, some of which have borne fruit, we believe that more steps are needed, especially in promoting growth in rural consumption and labour-intensive segments. Barco remains positive on the India growth opportunity and we look forward to favourable measures from the Centre, predominantly in the technology-enabled sectors and the domains we cater to – medical imaging, smart cities, technological innovation in tourism, among others.”
Gaurav Bali, Co-founder & CEO, AmyGB said, “One of the key challenges for technology startups in India is that of raising funds. With technological deployment on the rise, there are not enough trained professionals who can take up tech-centric jobs. This is why there must be a significant increase in investment towards training, research and skill development in areas such as IoT, AI, Blockchain, since these are the prime facilitators of technological development in the country.
Besides that, the government must also work towards improvising GST by reducing the tax slab for technology services and products to strengthen the start-up and SME ecosystem in India.”
Dr. Sanjay Gupta, Vice-Chancellor, World University of Design said, “With an eye on future, Union Budget 2020 must focus on quality and tax- free education and skill development. If we look at the current scenario, there has been a shift in the nature of jobs and career choices amongst the youth. The budget must incorporate necessary policy revisions required to meet future job demands and to make India as one of the leading higher education destinations in the world.”
Manish Lunia – Co Founder of FlexiLoans.com said, “MSME sector has been the backbone of the Indian economy with over ~30-40% contribution to GDP despite social, logistical and, resource-based challenges. The Indian businessman has battled the woes of Demonetization, GST implementation, Banking Crisis and Credit crunch, etc. in the past 5 years and pessimism around the system is under-represented, if at all.
The Budget 2020 should make efforts to empower the growth of MSMEs by providing them access to required credit with the help of supporting financial institutions with encouragement on data, credit guarantee, and easy documentation for availing finance along with expanding prospects of business across Sectors. Incentivization on using digital adoption by MSMEs will also be a stronger requirement while easing compliance around the same.”
Mr. Vijay Kuppa, Co – Founder, Orowealth said, “When the honorable Finance Minister, Mrs. Nirmala Sitharaman laid down the Task Force report on National Infrastructure Pipeline on 31 Dec 2019, a major thrust was provided to building the Digital infrastructure in order to achieve the USD 5 tn mark for Indian economy. Under the current state of economy, a lot of innovation in the fintech space is providing complete access and last mile connectivity, thus creating an eco-system where data flow and services are accessible to all. Thus there are high expectation from the Budget from the Fintech space. A clarity on Aadhaar E-kyc will be a welcome move for many fintech players as that will lower the operational burden of onboarding and thus complete focus can made on financial inclusion in a seamless way. The other aspect would be policy to make internet available across Tier III and IV cities, so that all the basic services are accessible. Thus a drive is needed for this project for implementation. Parity on capital gains on listed and unlisted shares will help to boost the fresh flow of funds from investors into this space. A seed fund can be established by Government and startups which have displayed their credibility in solving current issues can be scaled up to solve issues at national level by providing capital and financing at attractive rates. Foreign capital should be invited and the Government can co-invest in players which will provide some comfort to outside investors.”
Food And Hospitality Sector
HarshaVardhan, Co- Founder & Chief Executive Officer, Lil’ Goodness & sCool Mea said,”In a scenario where debt has weighed down the balance sheets of large companies, startups have played a key role in employment creation and tech disruption in the country. Home grown startups have also gone global with their ambitions, strengthening Brand India. Budget 2020 should further encourage home grown startups through an improvement in ease of doing business- while there has been a significant improvement, from a startup perspective having compliance requirements which were designed for large organizations applied to small startup organizations leads to large overheads at early stages of starting up. Clarifications on ‘angel tax’ exemptions should be supplemented with simpler tax filing and compliance regime with a fair degree of tolerance. Clarifications on ESOPs monetization for employees and long term capital gains for investors would reduce the friction in hiring employees and getting investments. Lowering the barriers for public listing of startups in India could also facilitate exists for some investors, therefore increasing attractiveness of Indian startups.
The Government could also catalyse startup investments in key sectors of the economy through higher utilization of the 10,000 crore Startup Fund. Consistent with some of the best practices in the West, this could be deployed in University incubators, reputed accelerator programs, PSU initiatives and NBFC VC funds to deploy capital in technology and labor intensive early stage ventures. In areas like Food processing, biotechnology and agriculture, opening up government labs and facilities to startups and entrepreneurs could create significant value for a sector which needs innovation. The Government should also create a strong global linkage for startups abroad, with dedicated facilitation and promotion desks for startups in foreign missions- similar to what UK, Japan and the US have done. Startups should be encouraged to create global business models- which being based out of India.”
Ms Neha Agrawal, Head- Corporate Strategy, Vikram Solar said,“The country needs to consider investing in building solar manufacturing as it stands to solve the country’s employment, energy, and economic issues. Additionally, new policies supporting manufacturing, solar export, land acquisition, and simplification of bureaucratic hurdles have to be introduced to support green energy growth in India.”
“The country needs to consider investing in building solar manufacturing as it stands to solve the country’s employment, energy, and economic issues. Additionally, new policies supporting manufacturing, solar export, land acquisition, and simplification of bureaucratic hurdles have to be introduced to support green energy growth in India.”
Besides entrepreneurs and SMEs, corporate employees are also looking for some drastic measures from the Finance Minister. Income tax cuts, for instance, is one such decision which everyone is expecting.
We will keep you updated, as more details come in.