Budget Reactions from Various Business Leaders | #4

Thought Habitat is receiving more budget reactions from business leaders representing niche segments. Here are some of their thoughts on the budget 2022 presented by Finance Minister Nirmala Sitharaman.

Prabhdeep Singh, Founder and CEO, StanPlus

The upcoming launch of an open platform for the National Digital Health Ecosystem is exciting news for us. It will include digital registries of health providers and facilities, a unique health identity, and universal access to health facilities, all of which will aid us in saving lives by allowing us access to contextual health information in quick time, enabling faster and better medical response in emergencies.

Pallavi Singh, Vice President, Super Plastronics PVT LTD

The FM announced no change to the current tax structure or tax relief has been provided in any form for the existing manufacturing industry and no reduction has been announced on GST rates, which is a disappointment. We hope that the FM’s announcement of carrying on the legacy of SEZ’s and replacing it with a new legislation is a welcome move and as mentioned, existing manufacturing units will be allowed to participate in the same to promote export of goods. The current budget has focused on building the infrastructure in India which is a welcome approach to make India at par with global infrastructure which will also help us in the long run.

Mohit Nirula, CEO, Columbia Pacific Communities

Budget 2022 is an opportunity for the Government of India to ease the burden on a demographic that has been most affected by the double whammy of decreasing interest rates, increasing retail inflation and medical expenses inflation over the past couple of years – retirees and senior citizens. 

With a fixed income dependent on returns from savings made during their working life, senior citizens need the Government’s intervention so banks can provide a higher rate of return on their deposits and the income tax slabs and tax levels are revised to leave more moneys at their disposal.

Improvement in the terms of Reverse Mortgage is another area where government policy can help unlock the value in an asset such that senior citizens can enjoy the benefits of the same in their lifetimes.  An amendment in the rules that allows the owner to continue to live in the home that (s)he has put on mortgage and an increase in the percentage of home value that can be provided as a loan would go a long way in making Reverse Mortgage another option for senior citizens to monetise their investment.

When living on their own, seniors have to depend on individuals from the unorganised labour sector for most of their daily chores – home cleaning, maintenance, gardening, security, driver etc.  Senior living communities help move the labour force into the organised sector.  This results in the employees getting additional social benefits viz. Provident Fund and ESIC.  Further, seniors are able to enjoy a worry free daily life.  Waiver or reduction of the 18% Goods and Services Tax for services in a senior living community would be welcomed by both the residents and the industry.

There is also a need to review the definition of “Affordable Housing” such that it reflects the disparity in land prices across the nation.  No change is required in the size stipulation of 60 sq. mtr. (major cities) and 90 sq. mtr. (non-metropolitan cities).  However, the price limit of INR 45 lakhs is not viable in several metropolitan cities of India.

Ankit Agarwal, Founder, Do Your Thng (DYT)

Startups are indeed drivers of growth for the Indian economy, and it’s encouraging to see the extension of the existing tax benefits and 25% of the R&D budget allocation. It’ll give nascent startups more breathing space. Along with the proposed expert committee to suggest measures to attract more investment, it truly is not “business as usual.” 

There’s one part of the budget that heralds a new era for the Creator Economy in India. Taxation of income from virtual digital assets is proof we are finally embracing NFTs and Web3.0. Together they are the cornerstones of the burgeoning creator ecosystem! Couple this with a blockchain-based digital Rupee, and it’ll create a knock-on effect.

Teja Chekuri, Managing Partner, Ironhill India

It is heartening to hear that India’s growth estimated to be at 9.2%, highest among all large economies. We are now in a strong position to withstand challenges as the Hon. Finance minister states. While it is a growth oriented budget, there is no big bang announcement for any sector including hospitality. This sector is still recovering and has some way to go. Although the credit guarantee scheme does provide some assurance of keeping the MSME hospitality sector afloat, we had hoped for tax breaks and a more holistic support system to enable growth for this specific industry.

Dharmishtha Goenka, Founder of Praakritik

Glad to see the government of India recognising and making Natural and Organic farming as an important part. Where Kisan drone, digitalisation of land and allied technology will help in better yield and more conversions from traditional to chemical free and organic farming, the inclusions of a NABARD based capital finance option will help young startups like us to grow. In addition to this the national logistics and supply chain program GATI SHAKTI, will help us reach consumers faster with fresh produce.  Year 2023 will be the year for clean eating and this vision of our Hon. PM to take this globally.

Suraj Malik, Senior Advisor, Private Clients, Funds & M&A tax at  Burgeon Law

Budget proposals reinforce the government agenda for inclusive and sustainable growth and are targeted at making the Indian economy resilient and vibrant. Allocations and reforms targeted at productivity enhancement, governance and digitisation will unleash the growth engine to make India a global force. Budget 2022 spells out Government’s agenda to drive growth and inclusive development beyond a just year and is a manifesto of the vision for India for next decades. 

New Policies permitting battery swapping for EVs, increased use of drones, digital currency using blockchain and incentives for startups and venture capital should bring in traction to entire start-up ecosystem that is the frontrunner for innovation and emerging technologies.The tax regime proposed for cryptos & NFTs equates it to speculative income as against a financial asset. Additionally, the proposed TDS regime will bring in some operational hurdles which the exchanges will need to implement.  Tax benefits to manufacturing companies and startups,  coupled with a lower effective tax rate (due to reduction in surcharge) on capital gain for Investors at exit will make investments more attractive for Angel Investors and Private Equity investors.

Abhishek Malhotra, Managing Partner, TMT Law Practice

• Cryptocurrency has been brought into the tax net of 30% which is a welcome move, as the same does not seem to be subject to a complete ban anymore. Further, as gains from its trading will also be taxed now, this will bring in some faith in the investors.

• The proposal to start digital rupee by 2022/ 2023, only indicates that the government is abreast of the changes taking place around the world and will take lead in granting approvals and investments. This also gives assurance to individuals that digital currencies will not be outlawed.

• With data centers having been moved to a harmonized list for infrastructure sectors, this only will incentivize players as the need for data localization and storage requirements increase, with the existing norms, and the pending data protection legislation.

• With roll out of 5G services in 2022, post spectrum allocation, this might also be a boost to the telecom services in general. This will assist in proliferation of other online services, reliant upon fast internet connections.

• The adoption of Kisan drones for crop assessment, digitization of land records, spraying of insecticides and nutrients, will bring about a phenomenal change in assisting the need of the farmers, and may stall the constant migration that takes place when the farmers are rendered without work during the off seasons.

• An open platform for the National Digital Health Ecosystem will be rolled out. It will consist of digital registries of health providers and health facilities, unique health identity and universal access to health facilities. This is in line with the vision of universal healthcare, and this linked to a robust data privacy framework, will bring about a revolutionary change in the management and availability of health data and records.

• Digital University, once set up in the hub and spoke model could also lead to generation of employment and boosting vocational jobs.

Keep watching this space for more updates!