Budget 2022: Here's what India Inc is wishing for

Ahead of February 1, all eyes are on Finance Minister Nirmala Sitharaman as she readies to present Union Budget 2022. Business leaders, entrepreneurs, investors, and other stakeholders from the Indian startup ecosystem are hopeful that the crucial budget will announce measures to fire up India’s pandemic-hit economy.

The Budget Session of Parliament will commence from January 31 with President Ram Nath Kovind's address. COVID-19 protocols are in place as several ministers have tested positive for the virus in recent times.

An optimistic outlook towards sustained growth prevails in every sector in the Indian startup ecosystem, the third largest startup ecosystem of the world, despite concerns over the likely impact of the third wave of COVID-19 pandemic.

According to the advance estimates of the National Statistical Office (NSO), the economy is expected to record a growth of 9.2 percent during the current fiscal following last fiscal’s 7.3 percent contraction, still a tad lower than the 9.5 percent projected by the Reserve Bank.

Deloitte has predicted that the Union Budget is likely to “put the economy on an accelerated growth path after the impact caused by the pandemic”.

"Amendments in the tax law to bring about sustainable growth, infrastructure investment, focus on R&D spending, nurturing incentives to the core sectors including manufacturing and services, tapping the huge experience of running captive centres are some of the priority items on the agenda," Deloitte said.

Here's a look at what Indian business leaders, entrepreneurs, investors, and other stakeholders across the Indian startup ecosystem expect from Union Budget 2022.

Sumit Gupta, Co-founder and CEO, CoinDCX

"We expect the government to officially acknowledge the nascent crypto industry in India and pave the way for inclusion of the industry within the financial ecosystem. Various governments from developed nations across the world have created the distinction between income generated from crypto as business income or long-term capital gains tax. For the benefit of millions of Indian investors who are invested in crypto we hope there will be adequate clarification on whether or not the income qualifies as business income."

"Similarly, clear guidelines and an explicit inclusion of crypto assets, and their corresponding treatment in the current GST and Income Tax guidelines will be hugely beneficial to the many crypto businesses operating in the country as well. Further, given that there have been calls for a calibrated approach and due regulations from the government, we also hope to see some strong signals from the government in the form of taxation related guidelines. By making crypto interoperable with the existing financial ecosystem and including this dynamic ecosystem into our financial framework with a long-term view, we are confident that this industry can contribute to turn India into a $5 trillion economy."

Siddharth Maheshwari, Co-founder, Newton School 

"Indian startups have played a vital role in the growth of the economy. While the pandemic forced us into a reset, technology brought about an accelerated transformation in almost all the sectors. The tech job market has taken the front seat in driving economic growth as well as employment in the country. At Newton School, we have witnessed the rapid increase in the demand for talent in tech. As India is set to be a $1 trillion digital economy by 2025, we are proud to see Newton School students actively contributing to the growth of the country's economy with cumulative packages of more than Rs. 70 crores."

Akshay Chaturvedi, Founder, LeverageEdu

"My basic expectation lies around 3 major areas :

a. Healthcare expenditure: I believe the FM will propose to double down on Healthcare expenditure in light of the new variants. This is much needed and essential for India, as it directly intersects with everything else we do - including higher education, as in our case at LeverageEdu. All of us, across different sectors, need to fix healthcare first and foremost, & it should of course be our top priority.

b. Vaccination: While it is a subset of the healthcare fund, I believe this should be our main focus going into 2022. To get all of our people double vaccinated, & then get boosters will be a huge win. We have done well at it so far, & should double down on distribution and awareness in the coming months. In addition, be it supporting our scientists to find better preventions to any new future variant, or helping businesses who are importing world-best infrastructure here - it will be important to stand behind all of them!

c. Education expenditure: The pandemic has changed education. The onset of online education has worked well for the minority that can afford it, but has put the larger country through an absolute unspoken crisis. While we cut out education budgets, it will be important for us to drive them in the right direction - devices for students to study from plus a distribution system that gets them these screens in real time, or putting together well-taken-care-of sanitised schools for those who can’t benefit from online, and a lot more. It’s important we think with a broader lens and with much bigger hearts. Also, as we go along building and supporting world class institutions in our country, it’s important for us to play by the oldest tenet in our history - of ‘Vasudhaiva Kutumbakam’ - and encourage more students to become global citizens, to benefit from the diversity of global programs in countries that are our friends like the UK, Australia, Canada, US - in turn helping India conquer the world as a soft power. 

Harshil Mathur, Co-founder & CEO, Razorpay

“Small Businesses & entrepreneurs who had been at the frontline of the Covid-19 crisis have been recovering from the impact and are gradually picking up. Digitization and the financial services sector has continued to be the backbone of SMBs struggling to adapt to the new normal in 2021, helping them harness the power of the internet and reach new customers across the country. Now with an aim to aid further development of small businesses, the Union Budget 2022-23 could introduce additional startup-friendly policies and tax relaxations that enable spending on innovation, ease-of-doing-business and reduce compliance costs."

"We’ve seen a substantial spike in the adoption of digital payments in the last year. I’m hoping that in the upcoming budget, the Government will think of alternatives to the Zero MDR policy, as that will help promote e-payments and drive significant digital adoption amongst businesses. Initiatives like these will also lead to new innovations in the payments infrastructure."

"Secondly, the crisis is likely to leave long-lasting scars on our society and economies, including the SME sector where issues of high indebtedness are particularly salient. It would be desirable for the Government to increase contribution to the FFS funds for startups. Hassle-free loan disbursements, automation of tax and compliance, paper-less approvals, and incentives to adopt digital banking practices will also be welcome changes that can support the growth of MSMEs."

"Lastly, we’ve seen numerous startups incentivise employees this past year with buying back ESOPs. Deferring tax payments when exercising the option, plus waiving off tax for some ESOP receipts will also be a laudable change in the new budget.”

Sudhesh Chandrasekar, CFO, slice

"The NBFC sector has witnessed liquidity crunch in the last few years. Therefore, boosting the liquidity flow to fintechs and smaller NBFCs focused on consumer credit would be key to reviving economic growth and putting the economy back on a double-digit growth rate trajectory. In a bid to ease lending, the government also could promote banks to specifically fund fintechs and smaller NBFCs which are furthering financial inclusion in the retail segment. Another welcome move could be the Extension of tax sops on MLDs, which has the potential to increase the flow of capital to the fintech space. The government’s policies can also be helpful in promoting the flow of overseas capital by easing the requirements and thresholds for Indian debt instruments. Similar to credit guarantee schemes for Micro and Small Enterprises (MSEs), I'm hoping the Government would look at credit guarantee schemes to retail borrowers to boost retail demand." 

Deepak Jain & Sushil Pasricha, Partner, Bain & Company

Expectations for the manufacturing sector are multi-layered, such as:

• Rationalization and simplification of taxation: The reduction of GST in certain sectors and reducing the number of slabs in GST would not only increase the tax compliance but also provide the necessary relief that would boost consumer sentiments and keep the demand higher.
• Low-cost, long-term loan to reduce debt burden: In the MSME sector (which employs 40% of the country’s workforce and contributes to 30% of GDP), the government should provide low-cost, long-term loans to infuse working capital and ease out the effects of the pandemic.
• Higher investment in the skilling workforce: There needs to be a higher investment in the skilling workforce as automation is replacing old jobs and creating new ones. The workforce should be upskilled for the next phase of industrialization i.e. Industry 4.0.
• Make factories energy efficient: The manufacturing sector is considered one of the significant contributors to environmental pollution; the government should take a two-pronged approach to reduce the carbon footprints of factories, one by incentivizing the use of renewable energy like solar, and second by setting stricter norms of energy efficiency for factories.
• Long term vision of EV: EV is the next big thing in the automotive sector, which is going to be critical for meeting sustainability goals. The adoption of EVs depends on two critical factors; affordability and infrastructure. Therefore, the government should apply a flat GST rate of 5% for all EV components, rolling out more incentives and policies to reduce manufacturing costs ultimately leading to a reduction of the overall price of vehicles.
• Upward revision of Remission of Duties and Taxes on Export Products (RoDTEP) rates: The government should consider raising the RoDTEP rates that were implemented in January 2021 as a successor to the Merchandise Exports from India Scheme (MEIS). The rates notified at 1% or lower, are inadequate to cover the incidence of unrefunded taxes and duties borne on export products. This is deterring the competitiveness of the Indian auto component industry.

Murali Nair, President of Banking, Zeta 

"The year 2021 was a phenomenal year for the Indian fintech and startup industry. With 40+ startups attaining unicorn status in the year, the startup industry witnessed tremendous growth. With regards to the fintech industry, India saw a continued explosion in digital payments and increased adoption of digital modes of payment. Around 44 billion digital payments were recorded across India in 2021. The Union budget 2022-23 must take into account this growth in the industry and continue to provide incentives for this industry to thrive in the coming months."

"Given the surge in digital payments, the budget should consider offering tax incentives to consumers, merchants and ecosystem enablers. The digital payments ecosystem can be a force multiplier for economic growth. Spurring this industry is therefore is a great way for accelerating overall economic growth and bringing about greater transparency in economic activity. In order to accelerate innovation in the fintech space, the budget should also support more partnerships between banks and fintechs- this will aid in pushing the economy towards financial inclusion. We expect the new budget to include supportive initiatives to provide a modern payments framework which can ensure high-quality performance while gearing up for the next wave of transformation.”

Kapil Banwari, Founder & CEO, Fyp 

“The Indian fintech ecosystem has revolutionized the banking industry to a great extent in the past two years. In the year 2021, we saw increased collaboration for growth between banks and fintechs. Neobanks also paved the way for financial inclusion and have proved to become the next big thing in the banking industry.

"We expect the Union Budget 2022-23 to undertake measures to support and boost the growth of neobanks and fintechs in India. With full-stack digital banks proposed by the government think tank, NITI Aayog, we hope it opens up doors for growth and opportunities in terms of foraying into full-stack banking. Moreover, we expect the budget to consider reforms and policies that provide increased space for homegrown innovation. A structured regulatory framework for the functioning of neobanks in India would also be a welcome move.”

Himanshu Gupta, Co-founder & COO, WeRize 

"According to figures unveiled by RBI, the fintech industry received a boost in 2021 with $4.6 billion in investments. All eyes were on the industry, as fintechs played a crucial role in accelerating the digital wave with an array of financial solutions, that reached the length and breadth of the country in the midst of the pandemic. The government is already on to a good start, with the launch of the new Fintech department to drive innovation. I would welcome a consolidated approach to take this to the next level, with the budget focusing on building a stronger fintech ecosystem. This could be done through liberalization of the tax regime, which would bring considerable relief to the industry. It would also be a step in the right direction to see the introduction of new start-up friendly policies, additional support mechanisms and tighter regulation for our industry."

Soham Chokshi, Co-founder & CEO, Shipsy

"There is a growing need to make logistics sustainable. The government needs to build policies that ensure subsidies for using electric vehicles to execute delivery operations, especially in the last mile. We are also witnessing a significant need for Indian businesses to leverage AI, Machine Learning, predictive analytics and more. Robust plans and investments must be made to empower the country’s youth to understand, manage and use these disruptive technologies. According to research, AI in the logistics and supply chain market is predicted to clock a CAGR of 42.9% by 2023, and it will reach USD 6.5 billion by then. The scope is massive." 

"Another critical area that seeks greater attention is the export-import (EXIM) side of India’s supply chain operations. Currently, EXIM operations are riddled with silos creating challenges on freight procurement, shipment visibility, and customs operations. The government must build policies that will drive disparate EXIM stakeholders, like manufacturers, retailers, freight forwarders, shipping lines and more, to embrace a unified platform to execute, track and manage cross-border supply chain activities."

Kumar Abhishek, Founder & CEO, ToneTag

"The government has consistently driven programs like Digital India, which has catalyzed digital penetration and financial inclusion. With the groundwork prepared, information and education about digital payments, both online and offline, must be encouraged proactively across all geographies of the country." 

"We are hopeful that the upcoming budget will focus on bolstering the digital infrastructure of cooperative banks across the country and initiate reforms that drive digital financial inclusion." 

"It is also crucial to capitalize on the success of homegrown technologies such as the UPI and encourage tech startups to invest in R&D and explore avenues to leverage existing tech and create new products. We are hopeful that the upcoming budget will consider offering tax benefits and incentives; thus encouraging innovation."

Swati Bhargava, Co-founder, CashKaro and EarnKaro 

"While the past two years have been unpredictable for certain industries, the ecommerce sector has grown exponentially during this time and served as India's economic backbone. Hence, we anticipate that the Union Budget 2022 will include special regulatory measures and tax breaks to aid further growth and consequently prepare the country to brave any other foreseen economic crisis." 

"India's ecommerce order volume increased by over 36% in 2020. Given that the space is currently witnessing a golden period with millions of first-time shoppers coming online, we expect the government to relax the multiple tax compliances that the industry has faced over the years."  

"The government should consider providing the benefit of deferment of withholding tax in ESOPs for all DPIIT registered startups. We also expect the current corporate tax rate of 22% to remain unchanged, as businesses need healthier cash flows now more than ever before to bounce back from the pandemic-related financial slowdown." 

"Last year, the Indian startup ecosystem claimed an incredible milestone with 44 new unicorns, and 2022 is pegged to maintain this momentum. This sector is expected to reach $111 billion by 2025 from $46 billion in 2020, growing at a 19.24% CAGR. Announcing a structured and conducive fundraising process, for policies and tax exemptions would certainly enable our startup economy to skyrocket."

Rishabh Goel, Co-founder & CEO, Credgenics

"While over the years there have been several improvements on this front, but a few changes could further help the startup. From the taxation point, there are benefits available for startups under 80 IAC, under Section 56, etc., of the Income Tax act. However, to avail of the benefits, the startup has to apply for registration separately. If these can be managed through a single-window system at the time of registration of the startup itself it will be just so much easier. In other words, whatever benefits are available to a startup should be available through a single registration."

"Another important pillar for the success of a startup is the people. And ESOPS play a big part towards the same. The budget should bring changes to the taxation of ESOP’s for a startup. These should be more employee-friendly and something at par with the global practices, which will help attract/retain talent 

While Government has introduced some measures related to the deferral of tax liability on ESOPS, this is available only to those startups which are holding Inter-ministerial Board Certificate, and therefore this benefit (deferral)  may not be available for startups that are in the process of obtaining this registration. Surely there is scope for some intervention here."

Suman Banerjee, CIO, Hedonova

"Regulatory and tax changes for IFSCsA focus on ISFC/GIFT city norms and clarity on regulations there would invite more foreign capital into India. Clarity on the benefits of using the IFSC route over the more commonly used FPI (Mauritius/Singapore) route would be greatly beneficial for Foreign Financial Institutions creating an India entry strategy."

"Regulatory and tax framework for cryptocurrencies. The introduction of a special regulatory and taxation regime for cryptocurrencies and central bank digital currencies to cover various aspects can be expected. I expect cryptocurrencies to be taxed as capital assets and a sale tax of 30% similar to winning the letters can also be expected."

Vikas Malpani, Co-founder & CEO, Leher App

"While there is a lot of buzz around building an infrastructure for startups in various fields, we need a lot of investment to counter the loss all markets experienced in the past two years. There is a need to build incubators and knowledge factories to promote startups, especially in the stock investment arena, since there is a rising interest but very few educational avenues. We are hoping that the crippling effect of the pandemic will be taken into due consideration for small and medium scale enterprises and will offer not only financial relief but also measures to simplify capital acquisition and other means to ease business"

Shachindra Nath, Executive Chairman & Managing Director, U GRO Capital 

"Union Budget 2022-23 is highly crucial to align Indian economy’s growth trajectory. It is essential that the Hon'ble Finance Minister announces effective measures to enable speedy recovery and growth of the MSMEs, considering the sector’s significant contribution to the economy. It is encouraging to see government’s support for the MSME sector in the last 12-15 months, and we believe the efforts will only become more prominent in the time to come."

"In past few years, operationally nimble and technologically oriented NBFCs and fintechs have deepened the credit penetration to the underserved regions of the country. Hence, in the upcoming budget, policymakers should provide due consideration to boost liquidity support to the NBFCs as well as encourage frameworks like co-lending, which will greatly boost the reach of financial institutions and progress in the financial inclusion imperative. EASE 4.0 talks about co – Lending between banks and NBFCs as a means to increase the credit penetration, however the treatment of Tax Deduction at Source (TDS) treatment for NBFC and Banks are different and that is proving to be a major operational challenge to accelerate credit. It is expected that TDS rules would be harmonised between Banks and NBFCs."

Suhail Sameer, CEO, BharatPe

"Digital payments have witnessed huge adoption in the last couple of years across cities, with offline merchants, kirana store owners and SMEs leading the way. We hope that the upcoming budget announces policies that further fuel the growth of digital payments, including reducing Merchant Discount Rate (MDR) for online as well as card payments as well. I request the government to look at making MDR zero or offer incentives/subsidy to small merchants accepting card payments. This will increase the adoption of digital payments and in turn, enable fintechs like ours to facilitate higher loans to the merchant partners."

"Today, fintech companies are working closely with MSMEs and offline merchants to fund their digital acceleration through easy access to credit. The uncertainties are likely to continue with new waves of COVID-19 and businesses will experience sudden shifts of opening and closing economies. In the upcoming budget, I hope that the government rolls out conducive policies that further enable fintechs to address the credit gap in the country. I hope that the government announces initiatives that enable easy accessibility of funds for new age Fintechs working with unbanked population."

"Also, I hope that the government continues to roll out initiatives that provide a conducive environment for startups to thrive and flourish. The National Startup Day is a great initiative and will go a long way in building India as a global hub for startups and innovation. Initiatives like tax and GST relaxation, will help businesses, including SMEs and young companies to bounce back faster, especially keeping in mind the impact of the pandemic over the last couple of years."

"Lastly, I recommend that the government explores the possibility of forming a Central Bureau for Fraud. There is a need to develop a centralised system for fraudulent practices reporting and ensure data security and privacy to the industry and the consumers.”

Yagnesh Sanghrajka, Founder & CFO, 100X.VC

Budget 2022 expectations and measures that can promote startup investing in India

1. Startups to be treated at par with listed cos - Unlisted Capital Gains - Tax rates and period to be the same as Listed equities
2. Taxation of ESOPS - Do away with the current notional concept, Tax the gains on exit when proceeds are received by the ESOP owner/employee
3. Tax Losses to be allowed in the event of a change in control - to incentivise takeovers and benefits to incoming majority investors/acquirers which will benefit the whole ecosystem and promote more R& D and innovation
4. GST on management fees charged to an India onshore fund to be exempt similar to an offshore fund
5. Edtech is an important driver of the Indian economy - online edtech businesses should get the tax benefits and GST exemptions - this will enable faster growth of edtech startups in India.
6. Easing foreign outbound investment in overseas domiciled startups by SEBI regd AIFs all categories. Should fall under the automatic route.

Shilpa Khanna Thakkar, CEO, Chicnutrix

“The Make-in-India or 'Be Indian, Buy Indian' should be the key focus. Quite a few successful startups have been spearheaded by women, but there is still a gap of financial support and literacy that becomes an obstacle. Efforts need to be taken to support and mentor these entrepreneurs. Investing in home-grown startups and brands will make them more independent."

"Also, consumption of Indian products will boost the economy and make the grass greener. Investors and government bodies should allocate funding that supports sustainable businesses. With health and wellness taking center stage, there should be a relaxation of taxes on essential wellness products. Encouragement to use wellness and nutrition products will boost the demand which is another factor leading to the growth of startups.” 

Harshvardhan Lunia, CEO & Co-founder, Lendingkart

"As the economy gradually recovers from the pandemic, India continues its march towards becoming a 5 trillion-dollar economy by 2025. To achieve this ambitious vision, the MSME sector will play a critical role. This sector is expected to increase its share of the GDP above the 50% mark, making rapid strides from its current share of ~30 percent of a $2.7 trillion GDP."

"We urge the government to further incentivise the banking sector to partner with fintech lenders on various risk-sharing co-lending models to extend capital support to MSMEs as well as simplify and standardise financing norms. We also appeal to the government to allocate budgetary support to encourage development of new technologies giving impetus to paperless digital lending and stronger collaboration within the lending ecosystem."

"It is evident now that small businesses can benefit by expanding to online channels. This is because of two factors: i) business operations in a purely offline manner can be severely restricted and ii) customers are showing increasing preference for online shopping. Expansion of online businesses may not be easy for small business owners. Hence, they need to be encouraged to adopt the ways of the digital ecosystem. The Indian government has shown its inclination towards digitisation in various fields. Similar efforts and policy changes are needed to ensure that digitisation of small businesses happens in Tier 2/3 towns, tehsils, talukas, and villages. MSMEs from such places need support to embrace digital workflows, cost optimisation techniques, inventory planning, and new ways of providing customer service. There is a lot of potential that is waiting to be unlocked via innovative business models. Aligned to such models will be building of capacities and improving skills levels of small entrepreneurs. All of this will help insulate MSMEs from losses such as the ones they faced during lockdowns in 2020 and 2021. Further, this can also lead to higher employment opportunities for all kinds of skilled/unskilled labour."

Vaibhav Singh, Co-founder, Leap Scholar

"The 2022 budget is expected to have a higher focus on the edtech sector as a whole, with significant investments to enhance greater access to robust and improved digital infrastructure. The GST for educational services is expected to be brought down to 5% from the existing 18%, to increase accessibility and feasibility for students from lower and middle-class families. With greater internet penetration, the upcoming budget is expected to announce various initiatives to accelerate digital innovation in the edtech sector."

Piyush Shah, Co-founder, InMobi Group, and President & COO, Glance

"The Indian Startup Ecosystem has had a flourishing year in 2021. We now stand at 80+ unicorns since InMobi was the first Indian startup to achieve unicorn status in 2011. In the coming year, the government could supercharge this burgeoning wave by creating the scaffolding on which Indian innovation will be built. Atmanirbhar India lies at the heart of every entrepreneur’s dream.

Favourable policies give the resources and support needed for this young ecosystem. They also send a strong signal on a world stage that Make in India is the fuel for a modern-day renaissance originating in the East.

With over 60,770 officially recognized startups across 636 districts, India has become the world's third-largest startup ecosystem and the strategic choice for investors across the world, thanks to its deep well of talent. A visionary budget for 2022 from the government will make them job creators and multipliers to remember in one of the largest and most exciting economies in the world."

Alok Mittal, Co-founder & CEO, Indifi Technologies 

"In response to the economic hardship created by COVID-19, several liquidity measures to support the MSMEs were announced. However, while the headline schemes were attractive the fine print made it very difficult for the new age fintech NBFCs to take advantage of the schemes. Due to such constraints the expected benefits of these support schemes did not reach/ transmit to the bottom of the pyramid MSMEs mostly catered to by fintechs/ small NBFCs. This budget must be in pursuit of better implementation of the schemes already in place. Further, the fiscal budget should announce measures to incentivize and strengthen support from SIDBI-like institutions and PSB’s towards lending to smaller NBFCs to ensure credit to SMEs at a lower cost of capital."

Aloke Bajpai, Group CEO & Co-founder, ixigo

“As the pandemic becomes endemic, we are seeing the true bounce-back potential of domestic tourism which saw a sharp rise in tourist flow in 2021 due to pent-up demand, vaccine roll-out, and revenge tourism. While demand and search queries for travel have been slowly climbing in the last two quarters and the industry is regaining momentum, certain provisions by the government can help bolster the industry back to pre-COVID-19 levels sooner. We have noticed the rise of domestic air travel from Tier 2 and 3 towns and budgetary focus on the development of infrastructure, technology, and safety measures of existing and new airports in Tier 2 & 3 cities will help boost tourism by improving connectivity with those cities where trains or buses may be the only connectivity today.

We are looking forward to the government strategising a sustainable long-term plan to help revive international travel which is currently disrupted by ongoing waves. The introduction of innovative initiatives like the ‘sandbox schemes’ currently being followed by countries like Thailand and Indonesia will help India build a more resilient tourism economy going forward. We also expect the upcoming budget to allot incentives for domestic tourism and promote it within the country. IT deductions on domestic travel and tourism spends will help incentivize tourism and boost domestic travel further. Tax breaks and waivers for the airline sector will also help aid faster recovery of the industry. Bringing ATF under the ambit of GST (which currently comprises 40-45 percent of the total operating cost of an airline) will bring much-needed relief to the aviation sector. "

Amit Bansal, CEO, Solv

“We believe tech-led transformations in the Indian B2B ecommerce space need to be inclusive of India’s traditional distribution channel players who have supported the country’s large manufacturers for decades. With the success of GEM in the public sector, the next significant leap in digitising and growing the vital MSME sector, could come from establishing similar models through PPPs with pure-play B2B ecommerce marketplaces which create robust platform ecosystems. This will help the smallest of the players get a level-playing field to compete and establish credibility, as well as access a larger pool of customers, on-demand credit and essential business services - all without disrupting their businesses, livelihoods, and potential for growth."

“Warehousing, a critical growth enabler of commerce, is currently a highly unorganised sector in India, with more than 90 percent of warehouses in the sub 10,000 sqft segment. Integrating & reviving India’s warehousing network through investment in a ‘national warehousing grid’ can help significantly increase capacity, leverage economies of scale, minimise wastage in perishables, as well as provide value-added services such as consolidating and breaking up of cargo, packaging, labelling, bar coding and reverse logistics. Developing the national warehousing grid as a plug-and-play ecosystem with easy access to MSMEs, will help eliminate several traditional growth blockers and rev-up the economy through a major uptick in both commerce, and generation of mass employment.”

Aditya Sharma, CEO, Affordplan

"The pandemic has shown us what improvements are required and where. The government commendably raised spending on healthcare by 137 percent last year, but the percentage of GDP spent on healthcare can still be increased significantly. This will be required to improve vaccine delivery as well as shore up critical healthcare infrastructure and public-private partnerships will prove key in this regard. Special attention should be paid to innovations that help households on the brink of poverty deal with their healthcare expenses, for both chronic as well as sudden or acute conditions. The recent Startup Day announcement is a positive first step for fintech and healthcare startups looking to provide ready solutions to these households."

Avinash Kumar, Founder, Credenc

The Government slashed its allocation towards education in the annual budget by 6% last year, amounting to a total allocation of Rs. 93,223 crores, against Rs. 99,311 crores in the year before that. This year, the education sector seeks higher allocation in the overall budget. With a considerable shift to virtual or online education models, ensuring access to better technology and improved e-Learning infrastructure should be prioritized to reduce the digital divide in smaller towns and cities. 

As per the All India Survey on Higher Education, the number of students entering higher education is at an all-time high (in 2019-20 the enrolment in higher education stood at 3.85 crores), and the outcome of these students’ success will be pivotal in determining not just their but also the country’s future. Thus, ensuring that quality education is accessible and affordable to these students should be a focus. Innovative Public-Private bank partnership models where education subsidy is complemented/accompanied with subsidy on finance can help make this dream a reality.

Overall, we are hopeful that the government relaxes the education infrastructure loans and expands the income tax provision under Section 80C for deduction of education expenses.

Nandini Mansinghka, Co-founder & CEO, Mumbai Angels Network

In the last few years, the government has launched multiple policies and schemes for the welfare and growth of the startup community. With young entrepreneurs entering this ecosystem at a steady pace, we hope that resources, funds and capital provided by the government are easy to access. We further expect from the government to create an easy regulatory system, policies, and norms for startups so that organisations can run a business without any administrative obstacles.

Subhadeep Sanyal, Partner, Omnivore

"The pandemic emerged as an added challenge to the doubling of farmers' income. I expect the government to bolster this objective via better credit availability, robust storage and logistics infrastructure and strengthening backward linkages. However, farm income is also intertwined with the deepening impact of climate change. Recognising India's vulnerability on this front, the government can add to its efforts for finding long-term sustainable solutions. Incentivising private investments in agrifood life sciences is certainly a step in that direction."

Anjali Bansal, Founder, Avaana Capital 

“We expect continued support for the startup ecosystem in the form of higher outlay under the Start-Up India Seed Fund, for providing institutional support and boosting startup growth. Large scale deployment of public digital infrastructure, including the Ayushmann Bharat for Healthcare and the Open Network for Digital Commerce (ONDC) for ecommerce will provide the digital rails for new business models and start-ups to emerge. Start-ups innovating in priority sectors such as sustainability, climate, healthcare and life sciences typically face lower capital flows from the private market. Availability of pools of catalytic capital can enable these start-ups to produce technology-led solutions to core issues.”

“We also expect significant measures to promote the ease of doing business in India, including regulatory support for debt structures that are more suitable to the requirements of start-ups; rationalisation of GST mechanism for startups, who often end up paying GST at high rates under reverse charge mechanism; increased speed of IP and trademark approval; and reduced cost and complexity of regulations and compliance. Budget 2022 to continue supporting the mobilisation of domestic pools of institutional capital, that will increase the flow of investments in India’s thriving startup ecosystem.”

Mayank Tiwari, CEO & Founder, ReshaMandi

“The government has been lobbying for and supporting the traditional handloom and handicraft sectors over last few years; but it is necessary to look at creating a robust and healthy sector across full value chain, right from fibre, yarn, fabric, to apparels. There is a need to reinforce, encourage, and recognise natural fibre growers as an integral element of the agricultural economy. We need to achieve synergy between technology and public policy, as well as to propose relevant solutions to increase income and job prospects. There is strong optimism that the priority sector, which has not been explicitly defined, will be addressed, and standardised over the following fiscal year. In addition, the government must offer subsidies to private companies for the industry to flourish overall.”

Charu Noheria, Co-founder & COO, Practically

"The much-anticipated Union Budget comes at a time when we are introducing necessary reforms in the edtech space. Having a central body to regulate best practices in the education and edtech space will be largely beneficial for the consumers. Ideally, the budget this year should consider important factors such as stronger adoption of the blended learning model and investment in a stronger digital infrastructure beyond Tier I cities as well. Digitisation is expected to be an effective solution in bridging the literacy gap for our country. Additionally, for  educational institutions and courses, the revision of the 18 percent GST slab will be largely beneficial in offering more conducive rates or fees to students. Being one of the youngest nations in the world, we are moving towards a brighter future and with some basic reforms in place, we will undoubtedly be one of the strongest countries in the world.

Kapil Makhija, CEO, Unicommerce

"Amidst the pandemic, ecommerce has become an integral part of India’s retail industry. India has the world's fastest-growing ecommerce and SaaS markets. Both sectors have garnered attention from investors and companies across the globe. We are an ecommerce focused SaaS solution company and we expect that the upcoming budget should focus on increasing digitisation in Tier II+ cities of India. The young aspirational Indians from these regions have started adopting ecommerce extensively and if the government continues to focus on the infrastructure there is immense growth potential. Also, we expect that the government will further provide clarity on the tax obligations of e-commerce companies and brands as it will help them further streamline their operations. We also believe that logistics infrastructure will play a pivotal role and any reform in improving India’s supply chain infrastructure will help in further driving the growth of India’s ecommerce industry."

Saahil Goel, CEO & Co-founder, Shiprocket

"We have a lot of expectations of support to the startup ecosystems which can really boost the economy. There should be a single window for all the relevant registrations like company incorporation, shop establishment, GST registration, MSME certificate etc. which will help save time, efforts, and money considerably. For startups, ESOPs are key to attract and incentivise talent, these should not be taxed on vesting as recipients do not have ready cash in the hands at that point, the taxation should be on the final sale of shares. Further, there is a deduction of TDS by the ecommerce operators on sale of goods, which leads to blockage of capital – that should be done away with."

"India’s logistics cost are high. Steps towards subsuming petroleum products under the GST regime have been under discussion for long; these will reduce fuel cost and progress needs to be made in that direction."

Kinner N Sacchdev, Co-founder & CEO, Knorish

"When Benjamin Franklin was thinking of a bright future for America, he decided to focus mostly on building the Public Library System. The gurukul system of ancient India was also based on the premise that the 'Guru' is the best source of knowledge and learning. As India stands on the verge of becoming a global powerhouse in all spheres, we are not just competing with ourselves but the world altogether. Today, the thirst for good learning content amongst students, lifelong learners and corporates is witnessing unprecedented growth. So, if we are to compete with the best in this global economy, access to learning that teaches new-age skills needed to survive and thrive in the 21st century must be made available to all. As such, I believe that GST on all online learning programs and enablers should be exempted from GST to make it more affordable for all."

Shiv Sharma, VP International, Stocktwits

"Based on our social media surveys, most retail investors "avoid trading" during the Budget, likely because many own blue-chip, secular winners for the long-term. Meanwhile, active retail traders usually ride momentum on sectors expected to hear bullish commentary in the Budget session. This year our data shows retail investors expect renewable energy to see increased focus. Retail investors are also hoping for relaxing of Long Term Capital Gains Tax and clarity on crypto tax policy."

Kartik Shah, CEO, Coldrush Logistics

"The logistics industry is dealing with non-predictable fuel prices, and its non-inclusion in the GST regime is already making it hard for companies in this space. This sector also has a higher CAPEX cost, making the liquidity cycle more stringent for businesses. Currently, the processed food segment is growing rapidly and needs reefer transport. But the GST on fully built reefer vehicles is 18 percent; thus, reducing it would significantly encourage businesses to invest in it and thrive in their journeys. Similarly, extending the subsidy scheme on these vehicles would also be a step in the right direction and help players operate more seamlessly without any financial burden."

"Moreover, the central and state governments currently have huge unused land parcels at prime locations. These can be leveraged to create warehouses and cold storage. The government has also pushed for the use of solar in this sector. However, it is not viable for medium-level players like us. As a result, the government can incentivise this and explore other possibilities to make solar power duty-free for cold storage providers. This move will serve a bigger goal of reducing carbon footprints and building a sustainable ecosystem for businesses."

Anil Nagar, Founder & CEO, Adda247

"The edtech industry has flourished at an accelerated rate as it broke new territory and entered Tier III and IV cities of the country. It will play a major role in educating our workforce for a better tomorrow. This is possible only if we make online education affordable to all. The government should support this through a lower GST, while focusing on creating a strong digital infrastructure to improve the quality & experience of online education for students in cities as well as remote areas. The government should also forge alliances with edtech companies to accelerate the learning outcomes with the help of cutting-edge technologies in the education ecosystem."

Greg Moran, CEO & Co-founder, Zoomcar

"The economy is on the road to recovery and the Union Budget 2022-2023 will be crucial for the Auto sector as it can facilitate the industry’s effective revival. We are confident that with the right policies and support, the sector is poised for growth. One of the key areas for both the government as well as the Auto sector is Electric Mobility. With several Indian and international groups keen to invest in the Electric Vehicle (EV) segment, the government should focus on bolstering the infrastructure to enable easy manufacturing and usage of EVs and EV-related elements such as charging kiosks to boost demand. With regards to technology, we are in the midst of one of the biggest tech-led transitions in India and the world and we expect that this year’s Union Budget will focus more on tech-led developments in the Auto sector. It presents the perfect opportunity for the industry to capitalize on and boost growth. We also look forward to more tax incentives for the travel and trade industry"

Vivek Tiwari, CEO, Medikabazaar 

“The pandemic exposed the deficiencies in our healthcare infrastructure and now it is imperative for the nation that the allocation to healthcare be increased and raised at least 2.5 percent of the GDP. This will help to ensure universal healthcare access across the country especially in Tier II, Tier III centres and beyond. There is a need for enabling policies that will boost and promote public-private partnerships in ramping up healthcare infrastructure and medical equipment manufacturing. Policies that encourage local technology-driven innovations in the field of medical devices are the need of the hour. This will also encourage increasing adoption of healthtech to access healthcare."

"India has the potential to be a centre for R&D and manufacture of high cost medical equipment and reduce the import dependency. A long term plan to incubate and support innovations across healthcare delivery infra building, patient care, supply chains and advanced equipment manufacturing will help India bridge the structural gaps, generate employment and deliver healthcare as per the growing needs of the vast population of India.”

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Here is what MSMEs, the backbone of Indian economy, expect from Union Budget 2022

Madhusudan Ekambaram, Co-founder & CEO, KreditBee, and Co-founder, FACE (Fintech Association for Consumer Empowerment)

"The Union Budget 2022-23 is a crucial one, considering the economy's efforts to fully recover and set on a growth path. In this imperative, focus on financial inclusion is very significant. The government’s recognition of the enhanced operations and effectiveness of fintechs to reach out to the unserved and underserved population, as evident from multiple initiatives in recent times, is encouraging. We expect this emphasis to become more prominent in the upcoming budget. It is essential that the government announce measures to ease the liquidity flow to NBFCs and fintechs. Further, while ensuring the right degree of regulation, relaxation of norms and tax liberalisation to some extent will allow the fintech sector to boost their reach and operate effectively to offer innovative credit solutions to the borrowers. Focus should also be on enhancing the country’s digitisation bid, to empower the consumers to avail various credit products."

Varun Goenka, Co-founder & CEO, Chargeup

"Sustainable transportation needs have seen a lot of developments in the EV sector in India. However, the pace of growth is not adequate and it is expected that the government will declare the EV industry to be a priority sector in the Union Budget. So far, various companies have launched electric 2-wheelers with a focus on last-mile connectivity. However, with the growth of business and commercial activities, there has to be a greater emphasis on last-mile delivery. This year, we anticipate significant growth in the B2C as well as B2B segments. Food delivery companies such as Zomato are moving towards a 100 percent EV fleet for their operations, and some of the cities such as Gurgaon have declared EV-only zones. We expect the government to take policy measures to build more EV zones that will drive the adoption of such vehicles. Further, strengthening of initiatives such as infrastructure and financial support to EV manufacturing, charging and battery swapping service providers to augment operations are also anticipated in the upcoming budget."

Sahil Chopra, Founder & CEO, iCubesWire

"Ever since the pandemic started, we have transformed our way to work and handling our business. From rapidly shrinking budgets to events' going virtual to the new hybrid workforce, we have surely come a long way. Considering a lot more similar factors, this year we are expecting a major push in the digital marketing and advertising sector. From higher rates for digital media buying to challenges in bringing the right talent on board to engaging increasingly digitally savvy buyers, we have seen higher customer expectations and so considering it as a base we expect the government to bring new schemes that will eventually enhance the marketers skill sets to improve their team's effectiveness without creating burnout."

"Raising marketing budgets to pre-COVID levels (if not higher) will be crucial. A lot of entrepreneurs are hoping for relief measures in the form of credit lending. Subsidies at ground level will make entrepreneurs feel protected & safe. We also expect to see decisions to fuel the growth of startups in several domains. If the right incentives on both the marketers' and consumers' sides are announced in this budget session, it would push the quick and wide adoption of digital advertising and marketing."

Akash Gupta, Co-founder & CEO, Zypp Electric

"India is undergoing a massive EV revolution – which will get a further boost in 2022 following the rapid growth of charging infrastructure and advanced EV models. We are optimistic that the government will announce new initiatives to encourage local EV manufacturing, facilitate easy finance, and create an innovative EV ecosystem."

"With that said, we urge the government to reduce GST on EV purchases and rentals from 5 percent to 2 percent. A reduced GST would allow consumers to smoothly shift to EV. The Finance Ministry can also reduce taxes levied on loans taken to purchase an EV. GST reduction and tax benefits would play a crucial role in making EVs accessible to everyone. Additionally, the government can also subsidise electricity pricing for EV charging to further improvise the existing EV charging infrastructure."

Arun Vinayak, Co-founder & CEO, Exponent Energy 

"The government's done a splendid job of supporting the EV ecosystem in India to date. However, there are a few areas they can address to further spur growth. Due to the inverted tax structure that currently exists (where EVs are taxed at 5 percent and battery packs alone at 18 percent). Several constraints are placed on new OEMs as well as the development of new models like Battery As A Service."

"While the nodal and state-level delegation of charging station deployment and policies around that make the process faster, infrastructure spending support for DISCOMS to support EV charging will accelerate deployment of charging stations across the country. The government has rightly introduced the PLI scheme to foster domestic production of Li-ion cells but the time taken to set up a cell manufacturing ecosystem will take at least three to five years. In the interim, reducing the import duties on Li-ion cells would greatly benefit EV startups to make EVs affordable and spur consumer demand."​

Sujith Narayanan, Co-founder, Fi 

“The standard of living and per capita income has been gradually improving as India’s rising economy lifts all boats. But the same cannot be said for savings. Increasing household savings not only benefit individuals but provides a source of cheap and long term funds to the government. The budget should increase the annual limit of Rs 1.5 lakh on tax-saving schemes under section 80C to encourage savings and investments. Additionally, the lock-in period of five years on tax-saving fixed deposits under this section should be reduced to three years to make it a more attractive investment option."

"Along with creating more jobs, skilling, and up-skilling, the workforce is equally important for the economy and growth. To this end, the budget should incentivise investments in education, for oneself or for children. A new section of investments for education can be earmarked as tax saving schemes. In the absence of deductions, education investments can be exempted from long term capital gains with checks and balances in place to curb any misuse. Such measures will certainly result in higher returns for all stakeholders in the economy."

Shankar Prasad, Founder & CEO, Plum

“The three areas that the government may focus on in the upcoming Union Budget 2022 includes taming inflation, manufacturing incentives, and cutting the export red tape. Mostly due to supply-side issues, inflation has been running high on most inputs used by the beauty and personal care industry. Price hikes in items of daily use will further fuel inflation in the wider economy. Duty reduction and other measures aimed at tackling inflation will have a good long-term effect on the industry.

We must make the most of the evolving global landscape and make determined efforts to further strengthen “Make in India” across the manufacturing spectrum. The country has a vast reserve of talent and resources waiting to make this happen. It’s a bit surprising that exporting out of the country is still sometimes as complicated a process as an import. While there has been some simplification here over time, the longer-term vision should be that every budding entrepreneur only needs to fill in a simple one-page form and book a consignment for export to any destination in the world.”

YS Chakravarti, MD & CEO, Shriram City

“The 2022 Union Budget should focus on reviving the financial sector, the backbone of the economy by focusing on rural development and MSMEs to increase livelihood opportunities and provide safety nets. We expect harmonization of regulations for NBFCs and Banks, specifically on tax and recovery measures. Deposit-taking NBFCs should be empowered to offer guarantees similar to banks under DICGC that will strengthen their liability pipeline. In addition to the above, to boost MSME lending, retail loans to individuals and small businesses need to be treated differently compared to large corporate loans. There is a need for an effective refinance mechanism (similar to NHB refinance) to ensure liquidity and easier access to finance. Push for environmentally friendly policies like the EV subsidy program - FAME (Faster Adoption and Manufacturing of Electric Vehicle) to help tackle climate change will go a long way in benefitting the ecosystem.”

Akash Sinha, Co-founder & CEO, Cashfree Payments

"The upcoming Union Budget holds high significance as the Indian economy takes strides towards its complete recovery and growth post the pandemic. This imperative will be greatly supported by enhanced financial inclusion and digitalisation, which makes it crucial that appropriate measures are announced in this regard. It is heartening to see the government's recognition of fintechs’ ability to reach out to the unserved and underserved sections of the country as evident from multiple initiatives in recent times. To further scale financial inclusion, it is essential that the government’s support is directed towards boosting digital infrastructure and innovation. Additionally, policy and regulatory efforts should be aimed at creating a favourable investment environment. While ensuring an appropriate degree of regulation, easing the investments in unlisted private businesses, especially in non-metro cities, is crucial for convenient capital flow to technology startups towards their healthy growth. In the same respect, reducing the entry limits for Alternative Investment Funds (AIFs) and syndicates, aligning with the government's allocation to priority sectors, will ensure fund infusion to businesses.