Budget 2020: What does the Indian startup ecosystem expect?
Ahead of the Union Budget on February 1, business leaders, entrepreneurs, and investors across sectors reveal their ask from the government.
Union Finance Minister Nirmala Sitharaman is all set to present the Union Budget for the fiscal year 2020-2021 on February 1. Like every year, expectations are sky-high from both industry and ordinary citizens for policies that will boost a slowing economy.
Here's a look at what Indian business leaders, entrepreneurs, and investors across the sectors in the Indian startup ecosystem have to say about the Budget.
Alok Mittal, CEO and Co-founder, Indifi Technologies
“India’s financial sector has been revolutionised with the coming of the fintech sector that has made capital accessible for the underserved small businesses. However, there are challenges with the cost and availability of capital to meet the addressable demand in the market. To ensure availability, we expect the authorities to make PSBs more inclusive, and ease the rating mechanism to drive a greater influx of capital in the market to further meet the demand of SMEs. Also, the cost of capital is very high currently. A supportive policy that enables transmission of rates to NBFCs would help in more credit to SMEs at reasonable rates.”
Deena Jacob, Co-founder and CFO,
“Investment in infrastructure projects, effective agri-revival schemes, and measures like tax reduction for the middle-income segment to increase disposable income would be the key areas I would like to see the Budget addressing this time.”
Harshil Mathur, CEO and Co-founder,
“While the government has been encouraging digital payments with constant efforts, three areas that need some attention are – some sort of direct incentives for businesses to accept digital payments, improved infrastructure for better internet connectivity in Tier-II and III places, and a framework for customers to gain trust and assured safety in making transactions online.”
Ashish Sharma, CEO, InnoVen Capital
“Over the last several years, the government has played a very positive role to support the growth of the startup ecosystem. Some steps that can help drive this agenda further include the stability of the policy framework, deepening of domestic pool of capital, more relaxed rules for domestic listing (IPO), and faster implementation of some of the existing schemes/initiatives.”
Shobhit Bhatnagar, CEO and Co-Founder,
“Firstly, our education sector plays an important role in empowering our youth. Therefore, the government should offer tax benefits to edtech startups in the form of exemptions. Secondly, the issue of angel tax has still not been properly resolved. As a result, investors are reluctant to invest heavily in promising startups because if they do decide to invest heavily, then they end up paying a significant tax on it. Therefore, investors require clarity on this front so they can start to invest freely.”
Mohan Lakhamraju, Founder and CEO,
“With digital transformation playing an instrumental role in growing the economy and improving its productivity, we are witnessing a tremendous change in the job market scenario in India. Support from the government in the form of tax breaks/financial incentives for professionals to reskill/upskill themselves in areas that are critical for today's digital economy will accelerate the creation of a future-ready workforce. Reducing GST rates for individuals opting for upskilling will lower the total cost to them and encourage them to take it up.”
Zishaan Hayath, CEO and Co-Founder,
“Fundamentally, an overhaul in the education system is required. At the moment, many of our graduates are ill-equipped for the job market. Investing in higher education will be a priority in this Budget, particularly since the presiding economic conditions will make potential students hesitant to study further, as they’d prefer to secure jobs instead. Efforts need to be made to help students upskill.”
Vamsi Krishna, CEO and Co-founder,
“Education has transformed in a big way over the past few years, where students and educators are most conscious of adopting engaging learning tools vis-à-vis recorded content. Live online learning is playing a big role in this transformation. This change is in sync with India’s digital transformation story and the government’s plan to rejuvenate the education sector with the revamped “National Education Policy”, in the last Budget. We look forward to more such initiatives and friendly measures for the live online learning ecosystem.”
Logistics and automobile
Gautam Bansal, Senior Vice President - Finance,
“A comprehensive ecommerce policy would provide future direction and confidence in the industry and help investors/entrepreneurs take decisions faster. There need to be incentives given out to the smaller businesses, as against currently growing multinational monopoly, without jeopardising the business confidence of foreign investors in India as an investment destination. Also, the government needs to come out with a special package for the logistics sector, especially smaller enterprises and startups. To start with, the government needs to enter a dialogue with logistics ecommerce startups, and come in government-private partnership models for infrastructure/tech/skill development and tax sops for strengthening logistics in India.”
Mithun Srivatsa, CEO and Founder,
“From a logistics sector perspective, it would be interesting to see how the government works towards further strengthening the national agenda for vehicular electrification over and above with FAME II to ensure wider penetration and adoption of electric vehicles across the country. Furthermore, a key area of concern that is impacting the growth of the sector is the limited support for invoice factoring, which provides ready credit for logistics players catering to diverse sectors including ecommerce and infrastructure. We look forward to the government coming up with a policy that encourages mainstream financial institutions like banks to cater to this need of the industry.”
Jeetender Sharma, Founder and MD,
"The revival of the automobile industry is expected to be on the priority list in the upcoming Budget session. The industry is hopeful that the government will announce policies to support the industry, and increase the demand in the market. Another buzzing word is about the growth of the electric vehicle segment in India. EV revolution has certainly picked up well in India. However, the cost of components and import duty remains a big concern for EV manufacturers. Certain parts of products are still imported due to lack of manufacturing facilities, and this forms a major part of the overall product cost."
Yash Rane, Founder,
“With the Indian economy on a slowdown, we need a policy with long term sustainable growth. We are looking at 9 percent GDP. GST has hampered the cash flow of SMBs, thereby affecting their buying power. The government should enable monthly filings and quarterly GST payments. Also, it is time to accept that manufacturing is, and has always been, the backbone of India. With China-US relationship getting better, India needs stronger partnerships to bolster exports.”
Tech and IT
Siddhartha Gupta, CEO of Mercer|
“Through this Budget, I hope to see more money being pumped into reskilling in emerging technologies that could define the path for future growth potential. For our industry, as well as in general, our Budget expectations lay in more investment in laying foundation and infrastructure for skill development through education that is practical, and provides hands-on experience in technology.”
Akshay Singhal, Founder,
“I think for startups, there are already a lot of initiatives in action, and improved mechanisms for the execution of those schemes are extremely important. However, I am more concerned about the economy as a whole. To boost the economy, my suggestion would be to increase spending under the Swachh Bharat scheme, maybe via MNREGA, to get Indian cities clean by employing the bottom of the pyramid.”
Redickaa Subrammanian, Founder and CEO, Resulticks
“As a fast-growing, AI and ML-based technology startup that helps businesses catalyse growth through real-time customer engagement and acquisition, we hope that the Budget will introduce policies that would induce companies to adopt digitisation across all aspects. Administratively, we hope processes to get even smoother for entrepreneurs to do business and investors to invest in India. We are entering a new era of technological disruption and expect the government to leverage this thoroughly through investments in initiatives on artificial intelligence, machine learning, Blockchain, and the Internet of Things, as well as relevant skill development.”
Vishal Shah, Founder and MD, Storia Foods and Beverages
“For ensuring growth in the FMCG segment, the Budget needs to secure a higher purchasing power for the consumers. With better access to credit and a reduction in income tax slabs, growing FMCG brands can expect an even greater boost in the upcoming financial year. Simplifying taxation and managing foreign investments, to continue promoting businesses under the Make in India campaign, are crucial for Indian enterprises and consumers. A push toward more sophisticated digital infrastructure is also instrumental in helping smaller businesses grow at a rapid pace."
Meena Ganesh, MD and CEO,
“While it was stated that the country is set to increase healthcare spending to 2.5 percent of the GDP by 2025, it continues to stand at one percent. We hope to see some action around this in the upcoming Budget. A major focus must be given to the home healthcare industry which is one of the ways to realise the government’s vision of affordable healthcare for all. However, home healthcare is not recognized as a mainstream sector and should be brought under the ambit of government schemes like the Ayushman Bharat Yojna. We also expect to see an increase in the limits on reimbursement of expenses on diagnostics, preventive health check-ups, etc., and for home healthcare to be made a part of this exemption. Critical healthcare equipment such as ventilators, wheelchairs, crutches, and medical equipment spare parts should be exempted from GST.”
Sarvesh Shashi, Founder,
“In the last five years, the government has exhibited a keen interest in the revival of Yoga. Preventive health and wellness is the need of the hour for each, given the high instances of disease and lifestyle-induced illnesses in our country. For holistic health to be made more attractive for consumers, the tax component on commercially-run Yoga practices and institutes must be revisited.”
Vikas Bagaria, Founder,
“Our expectation from the Budget 2020 centres around government policy and regulations, to enable ease of doing business through centralised policies. This will also attract more foreign investment opportunities in the segment. There is also a need to simplify the taxation process and make early-stage funding easier. While the government has done well in terms of facilitating foreign investments in India, this outlook needs to be maintained going forward to effectively promote more innovations under the Make in India campaign. Even though there is immense potential, the investor confidence in the Indian femtech industry is still considerably low – and we hope the policies to be announced in the Budget ahead will be an enabler.”
(Edited by Suman Singh)