Aravind SundaramBusiness leaders across India and across industries are keen on sharing their thoughts on the 2022 budget presented today. Thought Habitat is more than happy to recognize all their thoughts on the budget.
Layak Singh, Founder & CEO- Artivatic.AI
FM Nirmala Sitharaman’s Union Budget 2022-23 is a rock-solid budget that takes a future-ready strong pro-start-up, pro-technology and green energy stand. No wonder it estimates India’s GDP to grow at about 9.27%. The Budget takes the strong position the nation is poised in despite the challenges of the COVID-19 pandemic due to a successful vaccination campaign, and takes it that much ahead at the macro level.
The Gati Shakti masterplan shows a constructive plan for world-class infrastructure and the PLI Scheme to generate at least 60 lakh new jobs over a 5-year period is another welcome move. The initiatives announced by the honourable finance minister will aid economic recovery as it strongly promotes & supports technology and startups, this will definitely boost InsurTech Startups which is still a niche industry and open development opportunities for the sector.
The ramp-up of capital expenditure by 35.40% to Rs. 7.50 lakh crore from the earlier Rs. 5.54 lakh crore slab as well as upgrade to the credit guarantee trust for micro and small enterprises with the necessary fund injection, adding approximately an additional Rs. 2 lakh crore in MSME’s bounty, are signs of the government loosening their purse strings for the needy sector and would help SMEs & MSMEs to go for business insurance.
The promise of the Emergency Credit Line Guarantee Scheme to extend up to March 2023 with a revamped guaranteed cover of the scheme has been expanded by Rs 50,000 crore is also encouraging. Setting up a fund through NABARD that comprises blended capital with the aim to facilitate finance start-ups in the sectors of agriculture and rural enterprises, is another interesting welcome move.
Vicky Jain, Founder, UKnowva
The COVID-19 pandemic has ensured that the insurance sector transforms and respond quickly to this critical environment. And in this scenario, an acute need for a dedicated tax deduction and reduction in GST levied on the personal accident insurance cover is felt. Currently resting at an expensive 18% slab—similar to the rate that premium goods attract, health insurance, an essential service deserves a GST slab adjusted to a nominal 5% or abolished altogether, along with the stamp duties. In this manner, this necessary instrument will become more attractive and accessible to buyers.
Health cover premiums have increased since the inclusion of the serious diseases clause while the deduction cap under Section 80D remains steady at Rs. 50,000. Raising this ceiling to Rs 1 lakh would ease the insurance customers’ burden further. For senior citizens, the current limit is Rs 50,000, which could be raised to a proportionate Rs. 75,000. At present, employers providing group health insurance programmes are unable to claim input credit for the GST paid. Allowances made for GST-registered businesses to be able to take input tax credit claims for GST paid will keep them from defaulting on these necessary policies. There’s also the case of unfair tax treatment on the basis of double taxation of reinsurance brokerage. This needs to go.
Dedicated tax deductions for non-life insurance products are sorely lacking in India, as is enjoyed by life insurance products. Designing and setting aside tax deductions specifically meant for non-life insurance products will go a long way in reversing the appalling penetration in this segment. One way is to capitalise on the fact that India is essentially a deal-hunting country and we can entice the under-insured or uninsured population under the insured umbrella by introducing byte-sized, small-ticket insurance products such as sachet products, and micro-insurance. These should be completely exempt from all kinds of GST or taxes to make them super-affordable. With such products, we’ll empower people from even the lowest economic strata and SMEs to get some coverage.
KR Raghunath, Senior Chairman, Jindal Naturecure Institute
We welcome the much-deserved attention on India’s healthcare sector in the Union Budget 2022-23. We are encouraged by the Government’s renewed focus on preventive and curative health as well as the overall wellness and well-being of our citizens. An open platform for the National Digital Health Ecosystem which will consist of digital registries of health providers and health facilities, unique health identity and universal access to health facilities will widen access to health and wellness while driving focus on preventive health.
Also, to better the access to quality mental health counselling and care services, a National Tele Mental Health program has been announced that’ll further help in tackling the rising number of mental health disorders in the country. These patient centred initiatives will play a pivotal role in the success of the National Health Mission.
Dr. Prakriti Poddar, Managing Trustee, Poddar Foundation
The current direct allocations for mental health are grossly insufficient, taking into consideration that 14% of India’s population lives with some form of mental illness, and there exists a treatment gap of 72–92%. The launch of a national tele-mental health program for mental health counselling in collaboration with IIT Bangalore is a much-awaited move from the government.
Mental healthcare & well-being are complex & intersectoral in nature, for an effective mental health system, intersectoral linkages must be strenghtened and this has reflected in the Union Budget 2022-23. Also, the launch of an open platform for the National Digital Health Ecosystem which will consist of digital registries of health providers and health facilities, unique health identity and universal access to health facilities is a testimony of the commitment of the government to building stronger health systems.
Sonam Chandwani, Managing Partner, KS Legal
The Healthcare sector has been an Achilles heel for the government’s efforts to effectively deal with the pandemic. Given the archaic structure of the healthcare system in India, the ways to enhance its efficiency were addressed in the budget as the National Digital Ecosystem has been introduced.
This ecosystem will consist of digital registries of healthcare providers and health facilities. In order to track the health records, etc unique health identity will be efficiently implemented. On the front of accessibility of healthcare, the finance minister has retreated from the National health policies moto of universal access to health facilities. Thus, in its entirety, the budget has been found to foster efficiency in the system.
In addition to existing crypto restrictions, gifting in virtual digital assets would be subject to taxation. Even though ambiguity will be eliminated from the embryonic sector, the announcement comes as a major letdown to crypto investors, as a proposed hefty tax on crypto profits is a major disappointment. The crypto controversy does not appear to be over, as future plans call for the introduction of a Blockchain-based and RBI-backed Central Bank Digital Currency in 2023.
India’s growth story is about to take off. This can be seen through India’s growth estimates being set at 9.2%. Given that this estimate will be the highest among all large economies around the world, India will be seen rebuilding its growth story, which had taken a backseat due to the odious pandemic. With a current GDP of $3.1 trillion, the world’s sixth-largest economy can be seen implementing actions towards its aspirations of becoming a $5trillion one.
Disappointment might have set in for the taxpayers in the economy. Huge cuts in taxes were being anticipated by the spectators due to the pandemic. With the finance minister’s take on not changing the tax slabs in India, relief to the spectators has been denied. Thus, in its entirety, the Budget of 2022 is likely to come as an immense disappointment to salaried taxpayers, as very little to no changes can be seen being implemented into effect in terms of income tax.
The budget of 2022 has brought a huge amount of relief to the startup culture in India which is effectively developing and is in its nascent stage of formation. Relief in the form of an extension of one year for the incentives that have been provided to the startups can be coined as a relief for the sector.
It is no news that Startups have emerged as a major growth driver for the economy, this has been reiterated by the FM in her budget. Thus in lieu of the aforementioned argument, further incentives have been provided in the form of tax incentives for startups that have been positively increased from three years to four years of incorporation. This has been done in the view of the pandemic and is a welcomed step.
Akshit Bansal, Co-Founder of Statiq
The Union Budget 2022-23 has made a strong case for clean energy and environment by supporting the EV charging segment and according us the freedom to re-evaluate ways for promoting ease of charging EVs with low-cost renewable energy (RE) systems.
Pairing EV charging with RE structure has resulted in the positive development of the economics of adoption of both factors. By broaching the guidelines in the speech, the Ministry of Power has opened the gates for discussion and investment in favour of public EV charging stations, by prescribing a timetable for open access applications and the applicable fees. And for that we, as a sunrise sector and as a nation, are extremely grateful.
Mohit Ralhan, Managing Partner, TIW Private Capital Group
It’s a forward-thinking budget with focus on creating a blueprint for next 25 years. The government continues to push infrastructure building, Aatmanirbhar program and digital India, while providing budgetary support to mitigate the challenges of COVID pandemic.
The emphasis on urban planning, renewable energy, blending of fuel, electric vehicles, digital currency and local manufacturing points towards our future priorities. The massive increase of 35% in outlay for capex to INR 7.5 Lakh Crores exemplifies the positive intent of the government. The technology led modernization of post offices was also long pending.
Another extremely important and far-reaching announcement is the introduction of digital currency, which is likely to be a game changer in pushing India at the forefront of digital revolution. As far as SMEs are concerned, the extension of ECLGS to Mar-2023 and increase in guarantee to INR 5 Lakh Crores is quite encouraging and will help them further in combating the impact of pandemic. Although we were looking forward to a rationalization in capital gains taxes, overall, the budget has hit all the right notes to provide necessary impetus for propelling India as a leading economic powerhouse.
Dr. Akhil Shahani, Managing Director, Thadomal Shahani Centre for Management
Considering the experience of e-learning in the pandemic, it is good that the government is seriously looking at integrating online technology to make our education system more inclusive for the less-resourced segments of the population. However, it is important to realise that online technology is no substitute for good quality brick & mortar schools & colleges, as many students have fallen behind over the last 2 years of the lockdown.
So, it would have been important for the government to have focussed on efforts to train more teachers & support the building of more institutions. Another good initiative is the increased focus on skilling and upskilling to improve employability among our youth. Along with the new skill-oriented National Higher Qualification Framework being issued by the UGC, I see better integration between the academic & vocational streams of education.
Allowing foreign university campuses to set up in Gujarat’s GIFT city will hopefully be an interesting pilot initiative that could encourage foreign universities to expand into other Indian states. A couple of initiatives that were not addressed was the reduction of GST rates for Edtech services & allowing private for-profit investment into India’s schools & colleges, which could have greatly helped expand quality education across India.
Parag Satpute, Managing Director, Bridgestone India
This is a forward looking budget that focuses on not only the economic health of the country but also takes into account physical and mental health. This is indeed a major milestone in India. The PM Gati Shakti plan and the corresponding announcement of additional 25, 000 km of roads will spur growth in the mobility sector. Government’s initiative on electric vehicles and the announcement on a battery swapping policy is a major boost to the nascent EV sector and will boost customer confidence in EVs.
Harsh Shah, Co-Founder, Fynd
I am happy that it is not a populist budget, which shows that the government is prioritizing structural growth. An increase in capex spending is also in the right direction.Tax on virtual goods is indirectly good as it now brings digital currency under regulatory supervision, a very positive push for cryptocurrency and Web 3.0. This would incentivize startups to create more products & services in the blockchain ecosystem.High GST collection is also a good sign, it gives the govt appropriate resources to boost this long-term plan. The cap on surcharge on capital gains on any asset is a great thing especially for startup ESOP holders.
Harish Singla, Country Sales Manager, Foreverliving India Product
While the budget provides a much needed Long term push in funds allocation for the infrastructure but all this can come true depending on the implementation which has always been the stumbling block. Taxing the digital currency is the right step as it goes to prove that India is in alignment with evolving financial markets. Unfortunately the budget fails to address the aspirations of the middle class with no respite in taxes and not much focus on the health care sector in the long term.
Nishant Arora, Co-Founder, Sixth Element Finserv’s Setup Services India
In the Budget, the Government’s goal was to complement macro-growth with micro-all-inclusive welfare, digital economy and fintech, tech-enabled development, energy transition and climate action. The announcement of the launching the Digital ecosystem for skilling and livelihood will lead to the growth of startups; the development of Digital universities will provide manpower to strengthen the startup ecosystem further.
Another positive for the startups was an extension of the period of incorporation by one year until March 31, 2023, for tax relief. It was a balanced Budget where every sector was given due consideration with a special focus on streamlining the growth after the effects of the pandemic. Government directly venturing into blockchain shows that technology is the way to go ahead.
The budget also highlighted that all startups will be promoted to facilitate ‘drone Shakti’ for the promotion of drone as a service, it is a big leap for tech startups. The new tax rule was a unique addition, wherein taxpayers can file an updated return on payment of taxes, within two years from the end of the relevant assessment year. However, corporate employees were pinning high hopes on a move like providing benefits to salaried individuals by extending standard deductions and increased allowance of medical expenditure amid the pandemic.
Vivekananda Hallekere, CEO & Co-Founder, Bounce
We welcome Honourable Finance Minister’s progressive vision to facilitate faster adoption of electric vehicles in the country. With the Budget 2022 -2023 announcement on bringing out a robust battery swapping policy, this is a vindication of the path that we have pioneered for Bounce.
Government and policymakers have recognised battery swapping as the most effective solution to accelerate EV adoption in India by addressing range anxiety and hesitancy in adoption as well as considering the pragmatic aspects of setting up charging infrastructure – for instance, space constraints in urban areas for dedicated charging stations.
We believe this move can enable affordable and clean mobility at scale. At Bounce, we are nearing a million battery swaps already and the Hon’ble Finance Minister’s announcement ties in with our vision that clean, affordable mobility is a fundamental right.
Vinay Sharma, CEO & Director – Convergia (S Chand Publishers)
Budget really builds on the digital transition in education and takes measures to strengthen and broad base it. One key initiative is the creation of high-quality content which can be delivered through multiple means like mobile, cloud, TV etc. along with professional development of teachers to equip them in using digital tools and pedagogies. This will help towards improving the quality of learning outcomes.
Another significant initiative is a creation of a digital university which will deliver quality education to students across the country using remote delivery. This can help in bridging the skilling and knowledge gap because of limited physical infrastructures like universities and colleges.
Srinivas Ganadinni, Founder and CEO, The Tea Planet
We heartily welcome the revamp of Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) with fund infusion. Union Budget’s announcement of expanding the emergency credit line guarantee scheme for MSMEs is a good news for us. The addition of Rs 2 Lakh Crore will help the micro & small businesses to grow their ventures and meet their respective goals.
Subhrakant Panda, Sr VP – FICCI & MD – IMFA
I commend the Finance Minister on presenting a comprehensive, growth-oriented budget which is high on vision. Stable & predictable policies, launch of EoDB 2.0 predicated on trust based governance and, most importantly, substantial increase in Government capital expenditure to accelerate economic recovery and crowd in private investment is very welcome. Finally, attention to MSMEs in general, extension of ECLGS and enhancement by 50,000 crores directed at hospitality sector will provide relief to those affected most by the pandemic.
Ankur Bhageria, CEO and Founder, CashFlo
As a founder of a startup that is also an MSME business, the Union Budget for FY22-23 is positive for both groups. The COVID pandemic is not yet over, and the liquidity support and incentives provided by the government needed to be sustained into this year as well.
The extension of the ECLGS to March 2023 will be especially welcomed by the MSME sector, which constitutes 95% of ECLGS borrowers. CGTMSE Revamp and Announcement of MSME RAMP are also welcome moves. MSMEs have been hit hard by the pandemic, with well over 60% of them having faced increase in credit terms during COVID so efforts to speed up payments and move to a 100% e-bill system for central govt. procurement will go a long way towards releasing liquidity to vendors. It is important to both create liquidity for MSMEs as well as ensure that it reaches those most in need, and is good to see both aspects covered in this budget.
Extension of tax incentives for startups and new manufacturing companies are also welcome moves, but would have liked to see more support for the startup industry, especially with respect to taxation of ESOPs.
Lastly, the national tele mental health program for counselling is a fantastic step by the government in recognising and providing support to those who need it. This goes a long way towards reducing the stigma around mental health.
Vaibhav Jatia, Managing Director, Rhythm ResiTel
While the government’s focus remained towards promoting affordable housing, mid and high income housing continues to be adversely impacted by high levels of taxation, both direct & indirect. Effective 12% GST payable by the end buyer towards purchase of a new house dampens the sale velocity of projects. In no other country, whether developed or developing is the level of taxation this high for property transactions.
When we add to this additional stamp duty of 5-6 percent payable to state governments as well as other high premiums payable for development in cities such as Mumbai & NCR, the government in effect & indirectly ends up becoming a significant economic partner in the project (33% -40%) with no investment / consideration. If we want to make homes affordable for the public at large (ie not just for lower income families), this is where the solution lies. Given that a real estate purchase is a high ticket item for any middle income family, we hope that GST levels are rationalised in future budgets.
Maxson Lewis, Managing Director & CEO, Magenta
The Union Budget 2022 did show its intent on promoting cleaner mobility. The fact that the Union Budget 2022, did not focus on the traditional Auto business does show the intent of the government to focus on new technologies with its zero fossil fuel policy.
The introduction of battery swapping policy and interoperability standards will go a long way in building the use cases. The fact that the government will also formulate interoperability standards to improve the efficiency of EV business is a good indication and will support the growth of the infrastructure.
What was missed was an explicit statement of the extension of the FAME scheme and how it can support the expansion of the charging network in India to help facilitate the switch from petrol and diesel-based vehicles to EVs.
The Finance Minister’s words that the private sector will be encouraged to develop sustainable and innovative business models for battery and energy as a service is a great boost to co-develop the Battery Swapping and EV charging ecosystem.
Sohail Mirchandani, Chief Operating Officer & Co-Founder, Ekostay
Young India has become synonymous with the term – Startup. The dream of having one startup per district is almost coming true, but one of the biggest hurdles startups face is being bootstrapped. And so the difficulties that come along , affecting the sustainability of these startups.
The extension of ECLGS will only do good to young India in many ways. The ECLGS expansion by Rs 50,000 crores to cover an aggregate of Rs 5 lakh crores to aid MSME’s financial needs will definitely help the hospitality sector, that’s been looking for some relaxation or aid since Covid struck. This along with the other key points of the Budget 2022 shall definitely boost the spirits of young India and startups.
Dr. Sangita Dasgupta, Associate Professor, School of Management, BML Munjal University
A decline in the contribution of the agriculture sector to the GDP has been picked up by the service sector and not the manufacturing sector. It is an imbalance in the Indian economy. Infrastructure has been the Achilles heel for the manufacturing sector.
The present government is trying to develop the infrastructure to give a much-needed boost to the manufacturing sector. Finance Minister Nirmala Sitharaman in her fourth budget talked about PM Gatishakti Master Plan which will be driven by seven engines of growth.
Rs. 100 lakh crore project aims at developing holistic infrastructure resulting in inclusive development energy transmission, enhancement of productivity, and financing of investment. The master plan will provide the platform for National Infrastructure Pipeline. It will make Indian goods competitive due to an improved supply chain and reduction in logistic costs.
Priyadarshi Mishra, CEO/Founder, Design & Construct
Housing & Real Estate
The inception of dedicated institutes for urban planning in real estate sector will help to maximize the urban development as well as minimize the complexities in urban planning. The budget is a great initiative to make housing affordable for a large section of the country.
Startups
With announcement of Union Budget 2022 by honourable Finance Minister, the budget has focussed more on the Made in India initiative to minimize the dependency. To encourage the start-up ecosystem government has relaxed the tax and introduced flexible policies to help start-ups in the country.
With an expected growth of 9.27% percent the budget has given enough flexibility for start ups which will help to create new job prospects. The use of drones for startups will push the start ups for excellence. The promotion of fintech and technology based development will help the economy gain a pace as well as create a better job prospects for individuals.
Major push for infra
Infra spends in PPP mode seem to be the thrust of the Union Budget 2022. Start-ups in agriculture sector encouraged with commitment to provide support for FPOs, technology including IT based support. ECLGS extended up to March 2023 to aid MSME sector financing needs. The support for agriculture start up in the union budget will make FPO’s stronger as well as strengthen the IT support.
Ravi Mittal, Founder and CEO, QuackQuack
The budget was startup friendly with the government showing support in drone tech and the EV space which will benefit these sectors to grow. This shows the government is thinking futuristic. The rollout of 5G in the coming years will be a boon for startups as more people will have access to cheaper and faster internet and startups in digital space will benefit from this. However, the 30% tax on digital assets like cryptos and NFTs has come as a sudden move and will effect the growth in this space in the last year. One interesting and positive outcome of the budget is the reduction in long term capital gains will be an advantage for startups.
Mr. Nimith Agarwal, CEO, DoctCo
The FM has presented a visionary budget for the healthcare sector. Mental health has been a long-unspoken issue that has been given its due importance with the launch of National Tele Mental Health Program. The program promises to benefit rural people from lower strata who cannot afford the necessary treatment, thereby reducing potential suicides and quashing the stigma around mental healthcare.
Supporting the healthtech startups, the National Digital Health Ecosystem will revolutionise the healthcare space, streamlining electronic medical records with the support of IoT driven platforms. It will also enable medical professionals with accurate and immediate availability of data, in times of emergencies. The initiatives proposed are steps in the right direction, putting Indian healthcare at par with western healthcare.
Gerald Jaideep, CEO, Medvarsity Online
In her Budget 2022 address, Hon’ble Finance Minister Smt Nirmala Sitharaman made several announcements which collectively will boost the health ed-tech sector. The rollout of 5G was much anticipated, and the tech industry is elated to learn that 5G spectrum auctions will happen this year.
This will definitely open up tremendous opportunities for online education sector to leverage high-speed data connectivity and innovate better learning and education products especially in subjects like medical education where visual demonstrations play a big part in imparting knowledge and virtual experience.
With the budget, the Government has reaffirmed its position on three important verticals: the ramping up of digital infrastructure with across urban and rural landscape, the launch of open platform for the national digital health ecosystem, and the increased focus on online education, learning and skilling through initiatives such as the launch of PM eVidya, Digital University, Digital Ecosystem for Skilling and Livelihood – the DESH-Stack eportal.
All these initiatives will further knowledge transfer, education, learning, and skilling across geographies through digital means. As a leading health ed-tech company, we look forward to the integration of these factors with that of health education and medical training, which will help the sector scale and further advance level health education to healthcare workforce across India.
Rishubh Satiya, Co-Founder, Plix
Being a startup we are pleased to see that the budget has once again prioritised our needs. The decision to extend tax incentives to March 2023 is a welcomed move. The pandemic has been difficult for a lot of businesses. Many startups had to pivot overnight and this extension is a great way to support the fraternity. Plix being a plant based wellness brand, welcomes the attention being given to the sustainability movement. The budget also focuses on the need to prioritise mental health. However, we were hoping to see some decisions to support overall health and well-being. We also hope that in the future the ministry prioritises the need for sustainable and clean living.
Dr Veena Aggarwal, Trustee, Dr KK’s Heart Care Foundation of India
The budget for the year 2022-23 has been presented by the Government today. We had great expectations from the budget with respect to an increase in healthcare expenditure particularly because of the Covid pandemic, which has exposed the inadequacies in the public health infrastructure as well as the disparities in the healthcare system.
But again, health appears not to be a priority directly, though the government announced launch of a national tele mental health programme comprising of a network of 23 tele mental health centres of excellence with NIMHANS as the nodal centre in an acknowledgement of the impact of the pandemic on the mental health of the people.
The government also announced roll out of an open platform for National Digital Health Ecosystem consisting of digital registries of health providers and health facilities, unique health identity and universal access to health facilities. Two lakh anganwadis will be upgraded with better facilities; 80 lakh affordable houses by 2023. Personal IT slabs remain the same. Though now taxpayers can file an updated return within 2 years from the end of the relevant assessment year.
Dr. Shyam Bhat, Chairperson, LiveLoveLaugh
The pandemic and its aftermath have aggravated mental health issues, and this situation requires renewed focus. Therefore, it is encouraging to see plans in this year’s annual budget to bolster mental health care infrastructure in the country. The setting of new mental health institutions and a national tele mental health program provide a robust platform for more research, better treatment and follow-up, and an overall improvement in health outcomes. We look forward to the implementation of the policies announced in this year’s budget.
Keep watching this space for more updates on Budget!
Aravind Sundaram
Guest Author
