Tax breaks, startup investments, emphasis on mental health – what women entrepreneurs expect from Union Budget 2022

The State of Work India Report 2021, released by Azim Premji University last year, quoted government estimates that put female labour force participation at 16 percent in April-June 2020 right, after the pandemic-induced lockdown was imposed in India. This implied that less than one in five women aged 15 or older had a job or were looking for jobs.

It added that 47 percent of working women suffered a permanent job loss till December 2020 while the corresponding figure for men was only 7 percent.

According to WEF Global Gender Gap Report 2021, India slipped 28 places to be ranked 140th out of 156 countries — amongst the lowest in South Asia. The gender gap in India has widened to 62.5 percent, largely due to women’s inadequate representation in politics, technical and leadership roles, decrease in women’s labour force participation rate, poor healthcare, lagging female-to-male literacy ratio and income inequality.

Hence, it’s important that in the upcoming Budget, Finance Minister Nirmala Sitharaman illustrates a path for a more inclusive India.

HerStory spoke to a number of women entrepreneurs from different domains to understand their expectations from the Union Budget.

Regulatory measures and tax breaks for ecommerce

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 percent 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 percent to remain unchanged, as businesses need healthier cash flows now more than ever before to bounce back from the pandemic-related financial slowdown. 

Swati Bhargava, Founder, CashKaro and EarnKaro

Boost tourism initiatives

Since March 2020, India’s travel and hospitality sector has emerged as a domestic-demand-driven economy and proper government funding will ensure further sustainable pickup in domestic travel demand. My top expectations from Budget 2022 for the hospitality sector are — increased investment towards boosting the tourism infrastructure, and a provision of better accessibility and connectivity to remote and mini tourist locations for a large cross-section of the population.

Attention must also be given to providing tax breaks and interest-free subsidy options, thereby increasing investment in the sector. We must also focus on setting up more entrepreneurial cells and upskilling centres to build a skilled workforce that enhances customer experience, and supports the overall ecosystem, at large. 

While the surge in COVID-19 cases has resulted in highly volatile consumer confidence towards travel, proactive and timely amendments will boost domestic operations, and help the industry bounce back sooner. 

Pallavi Agarwal, Founder and CEO, goSTOPS

Investment in homegrown startups

The Make in India or Be India Buy Indian should be the key focus. India has emerged as a land of opportunities where we are constantly witnessing a lot of startups flourishing. Quite a few successful startups have been spearheaded by women.

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 homegrown 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 centre 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 start-ups.

Shilpa Khanna Thakkar, CEO, Chicnutrix

Decrease import duties on raw materials

The Union Budget should emphasise women's wellness, especially menstrual hygiene. We already have tax exemption on sanitary pads, however, this could be extended to manufacturing and production.

Further, decreasing import duties for raw materials could bridge the gap between supply and demand as well as encourage more Indian manufacturers to start manufacturing biodegradable pads in the country.

There should be policy-level incentivisation for Made In India products, startups helmed by women, and ventures that focus on sustainability and solving women's issues. The government should promote the use of biodegradable menstrual products to bring down waste produced by plastic products – a figure that currently stands at a staggering $12.3 billion annually.

We also expect the government to improve digital infrastructure in Tier II, III cities, and rural regions so that the next group of consumers can enter the D2C ecosystem. 

Anika Parashar, Founder and CEO, The Woman Company

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Impetus for investments

We are hoping that more money will be spent on capital expenditure and healthcare projects to help India become more integrated into the global supply chain. Sectors such as urban infrastructure, housing construction, and manufacturing could receive further impetus in the budget.

Defence, renewable energy, and infrastructure projects are expected to receive more funding. The Budget is expected to include incentives for the localisation of defence products and the renewable energy industry, as well as budgetary support or legislative initiatives to encourage the adoption of clean energy.

Steps could also be announced to reduce tax litigation and concessions in direct taxes. On the direct tax front, several major concessions are being sought, similarly, it is expected to reduce STCG Tax rate to 10 percent for resident investment to give impetus for investments in the debt segment and boost up the stock market.

Ruchika Bhagat, MD, Neeraj Bhagat & Co

Tax relief for cloud kitchens

Cloud kitchens have been around in informal setups for a long time now, the formal sector has only caught up recently largely due to the COVID-19 pandemic.

With many of these cloud kitchen companies coming under the ambit of GST due to an explosion in popularity. The GST council has clarified in its circular that cloud kitchens provide the same services that a restaurant does, and as such, they would be covered under the definition of a restaurant under the act.

Cloud kitchen firms charge GST at the rate of 5 percent, without taking any input tax credit (ITC), under the GST composition scheme. Alternatively, they can charge GST at the rate of 18 percent if they want to claim the input tax credit. This makes taxation complicated for cloud kitchen owners. In addition, due to such tax aversions, small players in the sector might end up paying taxes irrespective of the revenue slab caps.

As a cloud kitchen owner, we would expect some tax relief until a certain revenue hits the sheets so that as business owners, we can show growth reflecting on the performance of the overall industry.

Manjari Singh, Co-founder, The Chhaunk

Top priority for women’s safety

COVID-19 has exacerbated violence against women and girls because of systemic failure and deep ingrained patriarchy. The Budget must therefore include investments in education, health, violence prevention, and women’s livelihood enhancement.

The Nirbhaya fund is under-utilised. It should immediately be spent in quality shelter homes and more integrated one-stop crisis centres that are well resourced. A city like Mumbai has only two one-stop crisis centres.

Women should be part of every police stations — Dakshata Samitis — so that we can have faster redressal of complaints and build trust between police and community. Education curriculum must have modules on sex education, gender sensitivity, human rights and conflict resolution.

Women should be encouraged to take up livelihood skills of their choice and financial resources made available to them to set up their own enterprises.

None of these demands are new. There must be a clear intention to implement it.

ElsaMarie D’Silva, Founder & CEO, Safecity

Emphasis on mental healthcare

India’s mental health crisis has come to the fore with the challenges brought up by the pandemic. Few of the expectations from budget related to the sector include:

1. To increase the budget allocated to health so that the part assigned to mental health can be increased in order to reduce the treatment gap.

2. Earmarking a portion of the mental health budget and resources for effective implementation and tighter governance of mental health policies and regulation.

The general public would be greatly benefitted if an exemption or even reduction of GST for counselling services can be considered. This will ensure greater affordability of quality services.

Currently, the GST exemption is on a few subcategories, with some ambiguity. It needs to be relooked at, stated clearly and the burden be reduced especially for companies who are trying to reduce the treatment gap through an aggregator model-connecting more and more people in need of mental health care to qualified psychologists.

Richa Singh, Co-founder and CEO, YourDost

Concessions for women-led businesses

As we constantly strive towards creating a level playing field for women entrepreneurs, what will be appreciated is some concession on GST for women-run businesses.

Taxes on our income as entrepreneurs fall in the same category as salaried folks, and there could be instances where women do not see entrepreneurship as being rewarding due to a lack of benefits and a potential hit to their finances.

While there are grants in place, it would be useful to create more generous budgets for these, and make these better known and accessible to women entrepreneurs within Tier I and II cities, and beyond.

Hena Mehta, Co-founder and CEO, Basis