Marking the beginning of a New India, everyone has their hopes pinned on the Union Budget 2021 to elevate the country’s economy. Laying emphasis on the health sector and pushing infrastructure development post-pandemic, the budget aims to promote self-reliance and inclusiveness. With the industry sector withstanding these changes, here are some reactions of the Industry Leaders on India’s Union Budget 2021.
Rajesh Nambiar, Chairman and Managing Director for India, Cognizant
“Coming as it does during an unprecedented global crisis, the Union Budget for 2021 is justifiably focused on resetting the Indian economy and enabling it to emerge from the shadows of a prolonged and unforeseen disruption. The accent on improving healthcare, manufacturing and infrastructure as part of India’s mission to drive greater self-reliance will not only create more employment opportunities, but also accelerate the country’s shift towards digital modernisation and transformation that have become a key competitive differentiator in the new normal for businesses and governments alike.
Measures such as establishing a world-class fintech hub, and further incentivising start-ups will provide impetus to innovation, entrepreneurship and R&D in the country. Providing financial and tax audit incentives to promote digital transactions is a progressive step that will result in greater transparency and reduced compliance burden.
Consistent with India’s towering role in today’s knowledge economy, initiatives such as broadening foreign academic collaborations, leveraging synergies between various research institutions, universities, and colleges across India, amending the Apprenticeship Act to provide enhanced post-education apprenticeship and training opportunities to graduates, and moving towards implementing a Higher Education Commission of India will help enhance the quality of education as well as the vocational and industry skills available in the country. The proposed National Digital Educational Architecture is a welcome move to encourage a digital-first mind-set across the country’s education ecosystem for it to reinvent itself and rise to the learning and employability needs of the digital era.
Leaving the tax rates alone signals a stable tax environment. Reducing the time limit for re-opening of assessment to three years, setting up a faceless income tax appellate tribunal, and strengthening the NCLT with e-Courts and a conciliation mechanism for contractual disputes will increase corporate and investor confidence by paving the way to greater transparency and expeditious action.
There isn’t much in the budget for the IT industry, a sector that has done outstanding work to keep essential services rolling in various parts of the world through immensely difficult circumstances. We were hoping for an announcement related to the easing of SEZ rules for the IT industry.”
Aneel Gambhir, CFO, Blue Dart
“We are pleased to know that the Budget is in line with our expectations. The industry is eagerly waiting to see the results of these measures in our field of work. The proposed solutions include a succinct focus on improving road and railway infrastructure; investments in National highway corridors and economic corridors will aid in the speedy movement of goods and improve turnaround time which, in the long run, will bring down logistics costs significantly.
The National Highway work planned in Tamil Nadu, Kerala, West Bengal, Assam will further assist in the final goal of last-mile delivery and we are eager to see its results on our business. In the long term, all the expenditures could be assisted with the proposed introduction of the DFI which will speed up the infrastructure development in India.
Apart from this, the focus on the manufacturing sector in the budget would also help the logistics sector grow further.
While the budget carries good news for the logistics sector, we are also happy to see the Government’s efforts in propelling areas such as healthcare, infrastructure, and employment, all of which require a special focus going into 2021. With COVID-19 continuing to be a significant threat to the world, India is providing the vaccine against COVID-19 to over 100 countries across the world which is a commendable effort. With the Government also providing 35,000 crores towards the Covid-19 vaccine in 2021-22, we are sure to bid adieu to the virus sooner rather than later.”
Ujjwal Jain, CEO & Founder, WealthDesk
“Consolidation of multiple securities laws into a Single Securities market code will bring in clarity and boost capital and debt markets. Likewise, the introduction of an institutional mechanism to buy corporate bonds and an AMC to handle stressed debt from banks will further strengthen debt markets, bringing in faster debt resolution and greater liquidity. Avoidance of changes to taxation – income tax, LTCG, STT, wealth tax, or a Covid cess – will further spur capital market participation in the coming year. The budget also ensured continued support to the Startup ecosystem by extending tax holiday and capital gains exemption for investment by 1 more year to March 31, 2022. Increased spending on infrastructure and enabling entry of FPIs into debt financing in the sector will also boost economic growth and revival.”
Kanika Agarrwal, Chief Investment Officer, Upside AI
“The theme of the budget this time can be summarized in three words: infrastructure, disinvestment and capitalization. These are exactly the areas the government should be focused on so it will, as always, come down to execution. It is important to watch how the government executes its DFIs, PLI scheme expansion, asset reconstruction company, PSU recapitalization. Similarly, it is heartening to hear of the government’s intention to “minimum government, maximum governance”. The overhaul of redundant customs duty structure, GST simplification, higher FDI in insurance, stronger NCLT, single Securities Markets Code and making tax assessments easier are all encouraging signs.
Further, it has committed a larger outlay (albeit still only 2.5% of GDP terms) on infrastructure spending across rail and rural. We hope this will get employment back up as the country looks to fill the hole in the economy left behind by COVID.
Disinvesting/ privatizing PSUs and insurance companies is the correct move. While the intention to privatize and disinvest has been there nearly every budget, given the difficulty the government has had with this target in the past, we remain cautious on how the centre will balance its books and manage the committed deficit.
One area we wish the speech had paid more attention to is the government’s AI/ ML strategy. Given the strategic significance of cutting-edge technology on our place in the world in the coming decade, it would have been good to encourage innovation via a scheme, sandboxes, etc in the budget speech. The devil remains in the details, but we are happy with the direction in which the government intends to move with this budget.”
Shivjeet Ghatge, CEO & Co Founder, StepSetGo
“The announcement made by honourable finance minister Nirmala Sitharaman is welcoming. One more year to grab tax holidays by incorporating startups in FY 2021-22 is relieving. Additionally, extending the due date for investing capital gains in startups would indeed motivate a larger number of startups to come into play and generate more opportunities.”
Ahaan Aggarwal, Founder & CEO, Junoon
At the onset, we would like to laud the government for growth driven budget. We welcome the progressive initiative aimed to benchmark skill qualifications, assessment, and certification, accompanied by the deployment of a certified workforce and with an international collaborative training Inter Training Programme (TITP). But we feel that the budget could have been more focused towards skill development and job creation as it is an urgent need of the hour! None the less government thinking about skill development at par with UAE or Japan is consistent with the vision of Junoon.
Sandeep Singh, Founder, Rubystone Hospitality
”Though, there is nothing quite specific for the Tourism & Hospitality offered in the Current Budget, but on a broader aspect of it, I feel that ignoring any significant further taxation & allocating substantial budgets for healthcare & especially COVID vaccination is a positive step taken by the government towards boosting the economy, which would surely have a considerable positive impact on our industry & help the travel & tourism industry limp back towards normalcy at a faster pace.”
Agendra Kumar, President, Esri India technology Ltd.
“The budget seems to have lot of promise for GIS industry, the investments announced in Urban Jal Jeevan Mission, waste management, road infrastructure, electricity distribution, city gas distribution are the steps in the right direction and are likely to give boost to the usage of geospatial technologies in these key sectors.”
The budget presented by Mrs Nirmala Sitharaman offers a number of good news for the Geospatial Industry. Following are some of them:
- Government has announced additional investments to the tune of Rs 2.38 lakh crores in 2021-22 in the budget to expand HMIS and health infrastructure, GIS can help in planning, execution and monitoring of these initiatives.
- Geospatial technologies can play an important role to support the execution of Urban Jal Jeevan Mission program for providing water supply to urban households in 4378 ULBS and liquid waste management in 500 AMRUT cities where the government has announced an investment of Rs 2.86 lakh Crores over 5 years and Urban Swatchh Bharat and clean air in 42 urban centres with over 1 million population investment of Rs 2217 Cr.
- The investment announced in transport infrastructure segment are also very encouraging for the Geospatial industry. Honourable Finance Minister has provided for investment highway construction in the states of Tamil Nadu, Kerala, West Bengal and Assam, and have made an allocation of Rs 1.18 lakhs Cr. for MoRTH. Provision of Rs 2000 Cr for port modernization through Public-Private Partnership though a small step, but is none the lass a positive step in the right direction, here also GIS can support the planning and asset management in ports for achieving better fiscal efficiency.
- The reforms in Electricity distribution announced in the budget by allocating over Rs 3 lakh Crores for providing choice of DISCOMs to consumers, smart metering and upgradation of distribution infrastructure are expected to give a boost to Geospatial industry, utilities sector being a key user of GIS and other Geospatial technologies.
- City Gas distribution has made a big difference to the society, the announcement to cover 100 more cities in the next 3 years for Gas distribution and a new Gas pipeline in J&K are positive steps and will boost the use of GIS in this sector.
- Esri India has special focus on education and skill building sector. The focus and investment announced by the finance minister will further boost the collaboration between institutions of learning and private organizations.
Shashank Khade, Co-Founder & Director, Entrust Family Office
Pushing the growth throttle and putting the pandemic impact behind us was the need of the hour. It is good to see the government bat on the front foot. Spending their way out of the pandemic clearly was one important move to create sustainable growth. Bold initiatives of strategic divestments, asset reconstruction bank, monetization of operating infrastructure assets, infrastructure development financial institution, privatization of few PSU banks show strong intent of the government to get India on a growth trajectory by addressing impediments to growth. Allaying fears of the capital markets participants by keeping capital gains tax steady has brought in great relief. Markets have already given a thumbs up to no negative surprises.
Given the initiatives outlined, the Government seems to have its hands full in FY22. Over the last 12 months, the government has been working on the strategic sale of few PSU companies. Hopefully, all the work which has gone in to understand what it shall take to consummate the strategic sale of Air India, BPCL, Shipping Corporation, and many others shall come to fruition in FY22. Further companies are being added to the process including a couple of PSU banks and a general insurance company. The government has shown intent to move out of control/management from companies that are not strategic to them. An ambitious disinvestment target of Rs 1.75 lakh crore has been targeted for FY22. We believe once this engine gets cranked up, it shall hopefully get into overdrive over the next few years. IPO of LIC also has been marked to take place in FY22, which can be a big value unlocking event for the government and a large source of capital for funding future initiatives. Monetizing operating public infrastructure including power transmission assets, Road networks, dedicated freight corridors, airports, and others for funding new infrastructure construction seems to be a long-term viable financing option. A National monetization pipeline to be created with a dashboard to track progress and visibility indicates the government’s serious intent.
Infrastructure thrust is visible in the Union Budget with Rs 1.1 lakh crores allocated to Railways, central funding to a number of metro projects in various cities, Rs 3.05 lakh crore allocated to power sector, City gas distribution network in 100 more cities, 11,000 km of National highway infrastructure to be built. All these moves shall go a long way in creating jobs and add to economic growth.
Overall it’s a giant leap in the right direction. In the short term, until the divestment proceeds do not materialize, the government shall continue to borrow in the money markets. Disbelief about the consummation of strategic sale of PSU companies shall remain a hangover over the shorter term. Time taken to consummate strategic sales shall remain crucial. The government has a huge execution task cut out for itself. Hopefully, global benign liquidity conditions shall provide the necessary tailwind to make it happen.
Harsh Bhuta, Partner of Bhuta Shah & Co LLP
“As expected, the government delivered a huge capital expenditure outlay to kick start the high growth phase of the economy while balancing the revenue mobilisation targets by increasing divestment and not by raising taxes or a feared covid cess.
On the tax front, reducing the timelines for reopening past tax cases from six years to three years will lead to reduced tax litigation going forward. Thrust on speedy resolution of disputes with faceless ITAT, NCLT e-courts and the introduction of dispute resolution committee although, abolishing the Settlement commission will be a major dampener for quick settlement of complex cases. Further, removing allowability of depreciation on goodwill that had the blessings of the Supreme Court will be a major spoiler for M&A transactions.
IFSC will finally be able to realise its potential as its tax benefits extended to aircraft leasing companies, foreign funds and foreign banks. Rules framed to remove hardship of double taxation provides welcome relaxation to NRIs.”
Ashwani Rawat & Amarsh Chaturvedi, Co-Founder & Director, Transerve
“The Union Budget 2021 can be rightly considered as path breaking as it was the ground-level of the country and not just sector specific. The budget laid much-needed importance to the country’s healthcare system considering the recent and ongoing Covid pandemic by allocating Rs 64,180 crore for Atmanirbhar Swasthya Yojana, thus strengthening healthcare in India. We also appreciate an outlay of Rs 1.41 lakh for Urban Swachh Bharat 2.0 Mission, Rs 2.87 lakh crore for Jal Jeevan Mission Urban, Rs 1.41 lakh crore for Urban Clean India Mission and announcement of 5 new Smart Cities under PPP mode in collaboration with states, to reinforce the Urban India. Technology being the core suite to build on a successful business ecosystem, we welcome allocation of Rs 8,000 crore for National Mission on Quantum Computing & technology and building data centre parks. The honourable Finance Minister has left no stones unturned to give a boost to new age technology like AI, ML and Data Analytics across sectors with the launch of MCA Version 3.0 which shall target simplification of E-Scrutiny, E-Adjudication and Compliance management.”
Natarajan, SVP- Head of Finance & Accounts, JK Technosoft
“The Union Budget 2021-22 is applaudable at various levels. While as expected by many there were no exemptions in the tax slab, but providing exemption to the elderly for filing the return is a great action to reduce the compliance burden for the senior citizens. We also appreciate the Finance Minister’s decision to constitute a Dispute Resolution Committee to ensure efficiency, transparency and accountability under which anyone with a taxable income up to `50 lakh and disputed income up to `10 lakh shall be eligible to approach the committee for resolving disputes. We commend the Government’s decision to smoothen the GST structure to remove anomalies such as the inverted duty structure. Further, digitization of GST by deploying deep analytics and Artificial Intelligence to identify tax evaders and fake billers and launch of special drives against them is a praiseworthy action. We also appreciate the Government’s focus on new-age technology like Data Analytics, Artificial Intelligence (AI) and Machine Learning under which it will launch MCA21 Version 3.0 involving additional modules for e-Scrutiny, e-Adjudication, e-Consultation and Compliance Management.”
Sangeet Kumar, CEO & Co-Founder, Addverb Technologies
“Budget 2021 focuses on enhancing productivity by incentivising the use of technology to make India ‘Atmanirbhar’ and future-ready. As the future of manufacturing is driven with robotics and other automation technologies, we appreciate the announcement of PLI schemes to create manufacturing global champions under AtmaNirbhar Bharat for 13 sectors related to electronic manufacturing. The Government also announced to extensively use data analytics, artificial intelligence & machine learning for the roll out of MCA21 portal version 3.0. This version 3.0 will have additional modules for e-scrutiny, e-Adjudication, e-Consultation and compliance Management. Also, as upskilling programs are required to make the workforce ready to work with robots and other automation, the budget played a lot of attention to machine learning driven programmes and setting up of data centre parks to promote R&D. We highly appreciate the proposal of extending the tax holiday for start-ups for one more year and Tax relief for startup employees on deferment of tax payment on ESOPs by 5 years.”