Budget 2022 Expectations from Business Leaders Across Industries | #6

Budget day is fast approaching and as the D-Day keeps nearing, we hear a lot of significant expectations from industry experts and business leaders. Right from Finance to logistics, and energy to name a few, here we have some of the erstwhile personalities sharing their expectations out of the 2022 budget.

CA L V Rathi, Antariksh Group 

In India still, the Logistics sheds are not up to the Grade matching with the International Standards because of the high cost of Logistic Sheds. We need to reduce the costs at various stages in this sector Like reduction in interest Rate or subsidy in interest, GST Reforms like setoff of GST input on construction of Warehouses against Lease income from Logistic Sheds, Income-Tax Holiday for Incomes from activities related to Logistic Sector (A-Grade Warehouses) including Logistic Park/Warehouse Developers, 3PL Logistic Companies, Lease income from Warehouses of A-Grade, etc.

There is a need to provide Subsidies for the construction of A-Grade warehouses; this will boost the logistic sector.

Declaration of Warehousing Zones at various Locations in the country and various incentives to the A-Grade warehouses in the said Zones. 

In India the infrastructure is on the path of development, however, these infrastructures especially Roads to be developed at a more fast pace, this will save Time, Fuel, Cost, and help the fast movement of Goods.

Bhavik Chinai, Group CEO, BVC Logistics

We expect the Union Budget to provide large incentives for jewelry exporters for exporting <$1000 shipments which will boost e-commerce & could make India a global leader in jewelry, like in diamonds. A higher interest rate in the Gold Monetization Scheme will lead to improved Indian BOP & employment in the jewelry sector.

We are hoping for a higher budget for new airports, tax benefits for logistics CAPEX & simplification of procedures for new exporters through a single-window between DGFT, Customs & GST will unquestionably help the e-commerce & logistics industries.

Padmanabhan, Founder & CEO of Lexship

To give momentum to India’s focus on exports and create an Atmanirbhar Bharat, it is important to understand our exports in granularity. Out of the $526 bn of exports, Retail export is estimated to be between 76Bn to 100 Bn$, a segment that is growing around 25-30% CAGR.  

This segment primarily comprises Direct to Customers (D2C brands) and retail sales fulfilled by Small entrepreneurs (over a few 100 thousand) comprising of artisans, small traders, and BFH (Business from Home) driving this.  

The paradigm shift in international trade globally is now driven by MSMEs, worldwide economies are trying to regularize and ease these trade flows by making them compliant, competitive, and easy to use. The government of India over the last couple of years has been focusing on this and has taken many steps that bring ease of doing business, they are Digitisation of Customs, Faceless evaluation, Simplified KYC, etc.  

Existing export trade representative bodies, rules, and regulations have been conceived and set up for the traditional Production / B2B-oriented business. The current budget might be a good opportunity to 

1)      Create – A trade body focused on small and retail exporters comprising of Market places, Payments, and Logistics service providers, that can help the government in policy formulation to ease retail exports, is able to address the skill gap in technology, product promotion, and compliance. 

2) Adopt/regulate – Use technology to automate processes related to exports, to name a few

•  eBRC (Bank realization Certificate) process can be automated for retail exports, to minimize exporters physical intervention
•  Returns: “Returned products” contribute to a considerable volume in eCommerce, formulating rules that factor returns in retail eCommerce business are key. Managing returns is important to reduce the cost of doing business and keep this segment competitive.

Venkat Rajaraman, Founder & CEO, Cygni Energy

As per SMEV (Society of Manufacturers of Electric Vehicles), the sales of total electric vehicles in India is expected to be around 10 lakh units in 2022, a very bold prediction indeed!   There is good traction expected of high-speed scooters and for battery swapping.

Significant policy interventions have happened in 2021.  Two notable ones are a) the government’s extension of the FAME II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles), an ambitious scheme to promote electric mobility, by two years till March 31, 2024, was welcome and b) Government announced a production-linked incentive (PLI) scheme for the auto sector. It was ostensibly to overcome the cost-disadvantages of the industry for the manufacture of advanced automotive-technology products in India.

The incentive structure will encourage the industry to make fresh investments for indigenous global-supply chains of advanced automotive technology products.  It is estimated that over a period of five years, the PLI Scheme for the automobile and auto components industry will lead to fresh investments of over Rs 42,500 crore.

With this background, the following are the pre-budget expectations from the Energy Industry. 

1) Enhance policy and market collaboration across mobility, energy, and real estate sectors.  These sectors working in silos will result in sub-optimal outcomes. A joint policy task force across these sectors will accelerate EV adoption and strengthen the business case for efficient electric fleets, effective space management, charging network creation, and grid management. It is only when these sectors collaborate that large-scale capital can be attracted to this transition.

2) India to focus on fleet-led adoption and infrastructure build-up.  Electrification of commercial fleets (especially in 2W and 3W) can provide the demand signal and scale required to attract manufacturing and R&D investments allowing consumer adoption to follow.

3) Enhance FAME-II scope to incorporate battery swapping:  There is merit in expanding the scope of FAME-II to accommodate battery swapping for 2Ws and 3Ws.  There is an urgent need to review this scheme from a battery swapping perspective.

4) Focus on non-fiscal incentives to maximize impact with limited resources: Instituting Low-Emission Zones (LEZs) in congested urban centers, relaxing day-time municipal entry for electric urban freight, and legalizing e-bike taxis are a few policy opportunities that will support early EV adoption without the need to expend resources.

5) Enable access to clean energy to power clean mobility:  The transition to electric mobility makes the most sense when it is powered by renewable energy. India must liberalize regulations for charging stations to aggregate demand and procure renewable power.

Rajesh Grover, Co-Founder, Derma Essentia

This Pandemic has increased the importance of self-care. As remote working has become the new norm people are spending a lot of time indoors and are more inclined towards work-life balance, allotting a schedule for self-care & fitness.  This has created the need for better formulations to target skin & hair-related concerns.

Hence, the government needs to encourage companies for R&D. This will help companies to come up with innovative solutions & alternative technologies for various concerns. The skincare industry needs the right push from the government for better products catering to all skin & haircare concerns.

Keep watching this space for more such updates!