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Industry Expectations From the Union Budget 2022

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Finance Minister of India – Nirmala Sitharaman is all set to present the Union Budget on 1st February for the financial year 2022-23.  The Indian biz sector is quite optimistic about the same; rebate in taxation, simplifying investment and offering of further incentives to the Indian start-ups & MSMEs are some of the expectations from the Union Budget 2022.
Mr. Rajesh Gupta, CTO at BUSY Accounting Software says “To become Atmanirbhar Bharat, we expect the government to control prices of raw materials, which will help more MSMEs stay afloat during these challenging times. Besides, the government must reduce GST rates across sectors, increase the working capital limit for MSMEs, and ease credit disbursement to small businesses”Start-up companies that have been driving job creation within the country and have weathered the Covid-19 storm are now looking up to the Finance Minister to provide them with business boosters in the form of incentives.
Mr. Ravi Mittal, Founder & CEO of QuackQuack take on the situation“With the frequent curfews and lockdowns, startups are seeing unforeseen circumstances, it would be ideal to introduce simplification of an exit route for failed startups. On the other hand, simplification of listing norms for startups will encourage further investments. Also, certain startup products in life saving equipment can be exempt from GST. The government could create a centralized fund for smaller startups with innovative ideas. These can go a long way in supporting and promoting startups in our country”“2021 has emerged as an exceptional year for the Indian Startup Ecosystem. Our mighty economy produced 75+ unicorns in a single calendar year for the first time with nearly 40 billion dollar fundings. Covid is still a concern for the businesses, and Union Budget 2022-23 is just around the corner. To provide support, the government can infuse large cash flows into the system by extending current policies to facilitate the commercial expansion of the startups. Plus, create mass awareness programs to accelerate the digital transformation of the Nation. Lastly, a more lucrative taxation structure will surely help companies invest more in building a highly advanced future for all of us” – 
Mr. Siddhartha Vanvani, Founder & CEO, Digidarts adds to the scenario.Start-ups from the crypto sector have also been facing uncertainties with respect to the upcoming crypto bill in the Union Budget, start-up founders are though optimistic about the future and are expecting a progressive stance from the Government.
Mr. Roshan Aslam, Co-Founder & CEO at GoSats shares his views on the same; “While the Indian crypto ecosystem eagerly awaits the government’s decision to regulate crypto assets through the crypto bill, in the Union Budget 2022 we can expect the government to provide their initial views on crypto. This could include information on income or capital gains, taxation, and other certain views they have on crypto assets. However, nothing can be firmly stated until the crypto bill is released, as that would be the basis on which crypto assets will have a definition in India. Furthermore, we expect to see a boom in Indian crypto start-ups as the industry is growing massively. We are seeing many Indian and foreign VC’s being intrigued with crypto companies and the talent they have. With this degree of growth, we hope the government takes a positive regulatory stance in regulating crypto assets”
 Mr. Alok Mittal, Co-Founder & CEO, Indifi Technologies suggests “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 lower cost of capital.”
“Reduction on import tariff is something we are expecting, this will help us compete with countries like China, Mexico, Thailand and more. In the last two years, the PLI schemes have provided momentum to domestic and international investments, but so the investment from the Government side for infrastructure building will boost the ‘Make in India’ movement. We have to integrate India into the global supply chain scenario, to achieve that tariffs should be equal or less than competitive markets.” Vijay Kumar Mikkilineni, Head of Marketing, TCL India
“We are expecting that the import tariff will be reduced, so that our country can match up with the other competing countries like China, Mexico, Thailand and more. Additionally, we have witnessed much of compliance reforms in the last two years, the PLI schemes have indeed helped in domestic and international investments, but we have to keep in mind that setting up manufacturing units might take several years, so the investment from the Government side will boost the ‘Make in India’ movement.”  Rimo Bose, PR and Branding Manager, TCL India
“On the supply side, a much needed relief would be to waive customs duty on the import of electronic components. This will provide a boost to a growing electronics manufacturing sector and relieve stress that has built up over the last 18 months. It is important that we see a reduction in GST rates, given the component shortages we have seen the price of electronics skyrocketing. Lowering GST will make products affordable and give a boost to the electronics industry. A progressive take by the government would be to see the government providing incentives to companies with spends on research and development. Hamish Patel, Chief Product Officer, World of Play
The online skill gaming and esports industry has been one of the very few sectors that has not just weathered the pandemic-induced slowdown, but has witnessed exponential growth. The industry is bound to grow even further, opening up new career opportunities for both gamers and game developers, and helping take Made in India games to the world. As we look ahead, we hope the Government of India will introduce measures to adequately support this next phase of growth. Online skill gaming companies, which have flourished amid phenomenal investor interest, are well-placed to create jobs in roles ranging from VFX
designing to software development. The Budget should consider levying a lower tax slab than the existing 18% to aid this. With esports a medal event at the Asian Games, and continuing to gain prominence, this will also help incentivise a greater number of professionals to get into esports and represent the country at global tournaments of this stature. The industry will also benefit from a fund that can provide capital to talented developers and designers, putting India on the path to becoming the hub for game development globally. Access to infrastructure will be crucial in this regard. This can be achieved by establishing
specialised AVGC Centres and Universities for talented designers, visual artists, and developers who may have the capabilities but not the resources to build world-class games. Lastly, we hope that this year will bring more clarity from a regulatory standpoint. Online skill gaming suffers from a lack of differentiation from prohibited categories and games of chance. A uniform policy will be welcome and provide much-needed stability to the sunrise sector. Sai Srinivas, Co-Founder and CEO, Mobile Premier League (MPL)
Haptik.
Due to the increased push toward digitalization, the usage of AI across industries has increased remarkably. While the previous two budgets had recognized the importance of technology in shaping the new India, we now anticipate opportunities and significant government efforts to locate India as one of the world's preferred AI attractions this year. Considering this, we hope this time too the Finance Minister will put special emphasis on AI and technology for future ready solutions. We at Haptik.ai are optimistic about the center’s vision for a digital strong Bharat and are looking forward to favorable measures that will boost the tech ecosystem in India. Aakrit Vaish, Co-Founder & CEO, Haptik
“One of the expectations is for increased allocation in the healthcare sector – across the entire infrastructure, specifically for immunization. COVID-19 is far from over and it is vital that the country is well prepared to fight the pandemic and any future pandemics, and a reliable medical cold chain is critical for the success of any immunization program. We believe that creating a sub-industry for medical cold chain and separating it from commercial refrigeration, along with reduced GST rates could further boost the sector. The government should reduce import duties on critical components that are essential for manufacturing reliable medical cold chain units. This, along with production-linked incentives will help improve the country’s ability to access world-class medical cold chain products and also improve India’s export competitiveness in this industry.” Mr. Jesal Doshi, Deputy CEO, B Medical Systems
Akash Gupta, Co-founder and 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% to 2%. 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 till 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% and battery packs alone at 18%). 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 3 to 5 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.”

Given the Government’s ambitious goal to be zero-emission by 2070, EV is the way forward; we anticipate a further boost for this sector in the forthcoming Budget. What is needed is incentivization from the Government to make EV the mode of choice for the end consumers. That could come in terms of tax relief, subsidizing the offering to name a few. The recent introduction of the  PLI scheme for the EV sector was a welcome step. It complements the FAME scheme well in encouraging us to develop new technologies needed to grow and evolve. The scheme’s recent induction of  115 automobile and automobile-related ancillary companies promises increased localization and accelerated investments in the EV ecosystem – a much-needed support system to enable our growth story. Though I still feel the subsidies here should be relooked at to get more entrepreneurs in the fold.The lack of charging station infrastructure and battery supply, which is currently heavily dependent on imports, are two growth bottlenecks for the sector. We need the Government to help with solutions that will clear this bottleneck and pave the way for EVs’ acceptability.Incentivizing Auto Component manufacturers to add EV components to their lineup would be another as more availability of localized parts will push up growth of the sector and help bring down both production timelines and cost for the EV’S acceptability.Given the current dependence of the EV sector on imports, a reduction in import duties and GST would be a welcome relief.Reducing GST on components that are meant to be used in the production of EV’s would be one step to help bring down the cost of production and prices of EV’s. Easing the GST refund process would be another step that would help improve efficiency in operations.Finally, easing the export process will encourage the EV manufacturers to look at export as an element of their go-to-market strategy. Raj Mehta, Founder, Greta Electric Scooters and MD, Raj Electromotives Pvt. Ltd.

 

Mr Avneet Singh Marwah, CEO, Super Plastronics Pvt Ltd, Kodak brand licensee said “We need to have a stable GST tax slab to boost Indian manufacturing and MSMEs sectors. The products should not exceed the 18% slab, as they now need to encourage consumerism to be able to improve market sentiments. With this move, India can become the world’s third-biggest market for televisions, leading to an estimated growth of 15% in the market size, increasing to up to 16 million units annually.  We would like to urge the government not to change custom duties as if now, as the industry is moving towards a stable condition.

We would like to congratulate the Government for introducing a $10 billion PLI scheme for display panels and semiconductor chips. We would also request Financial Minister to have timelines for these projects and this. shouldn’t be restricted till the Memorandum of Understanding. This could be a pathbreaking move for the electronics sector.

We have seen a 10 times growth in sea fright in the recent past, along with that timeline have increased two times. There is a big syndicate in this sector, which is causing this delay, and as a result, causing a huge loss to the economy. The Government needs to take strict measures to control the same.

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Government should consider lowering the tax rate on consumer electronics as this will encourage consumers to buy higher ASP products. This will also help in digital India, as consumers will opt for more tech products.”

“Increased government revenue, both through direct and indirect taxes will allow the government to take bold steps in direction of reviving private Investment and giving impetus to consumption led growth of the economy. With strong corporate earnings in Q3 and robust growth in Agri sector, the broader economy is poised for a steady growth. I feel that the government may go for a second round of PM Samman Nidhi DBT to farmers and would consider allocating more to MGNREGA scheme to promote development and employment in rural areas. An improved cash flow in rural economy will benefit the microfinance industry.” – Sadaf Sayeed, CEO – Muthoot Microfin Ltd.
“Microfinance industry looks forward to this budget with hope. The industry has again gained momentum and is on a steady recovery post the second Covid wave. I believe this budget would have further measures to revive and boost the rural economy. The industry would want the government to continue with the credit guarantee schemes and tighten measures to control inflation, this will help the microfinance industry to thrive again.” – Praveen T, CFO – Muthoot Microfin Ltd.
“As a manufacturer of the warehouse automation systems, we rely heavily on raw material and with the high increase in raw material prices, it has become difficult to provide a solution at a reasonable cost. So, we would like government to focus on controlling the inflation in raw material prices and other factor is availability of Electricity. Government should focus on generating more electricity and provide it at a better cost so that we industrialists can compete on the international market more effectively and efficiently”-  Khursheed Alam, Co-Founder, Atmos Systems.
Mr. Ashok Rajpal, CEO & Founder, Ambrane India The upcoming Budget 2022 would be critical in restoring India’s pandemic hit MSME and the manufacturing sector. It is projected that the core topic of Budget 2022 would continue to offer stimulus to the market for locally created goods to minimize import reliance and support the & Make in India effort. To promote Make in India, the government must incentivize R&D by providing subsidies and fiscal stimulus to the private sector. The decrease of corporate taxes and the implementation of various PLI programmes in the Union Budget 2021 have boosted domestic manufacturing; nevertheless, the industry now requires an additional push with further Make in India plans and incentives for electronics manufacturers. PLI initiatives will be extended to attract greater private investment and engagement in the industry. The industrial business needs assistance in tax cuts and simpler legal procedures. Compliance should be simplified, and unnecessary legislation should be phased away. This will increase trust and confidence between the private sector and the government. The forthcoming budget should prioritize employment too. Budget 2022 must focus on job creation via private and public sector engagement in areas with backward and forward economic integration. The budget should accelerate the implementation of the National Retail Trade Policy to streamline the licensing process, thereby making it seamless for growth. As export incentives have been reduced, trade policy must now encourage MSMEs to expand outside their boundaries. This would help India establish itself as a worldwide market leader. Reducing compliance and regulatory burden and providing financial incentives to large scale projects would also help bolster India’s Industry 4.0 impetus.
UBON – Mr. Mandeep Arora , Managing Director – Consumer Tech Industry
This year, the government is expected to take a progressive step towards making India a hub for the manufacture and export of electronic devices. Consumer electronics product export incentives and low GST. At the same time, analysts expect import tariffs on certain components to continue to rise. I think it’s time to go beyond that, we believe that the budget needs to focus more on value creation, including special incentives and subsidies for consumer electronics and component manufacturing. We all agree that India has strong goodwill in the world market. The country will have immense growth opportunities by taking advantage of innovative new technological aspects that facilitate the lives and governance of its citizens. We want a stronger impetus for reinventing the Digital India campaign with better reach, faster, more efficient technology, and a planned schedule.
Candes –  Mr. Vipin Agarwal, Co-Founder – Consumer Durables
With the budget approaching we expect the government to rationalize the tax slabs for the consumer durables. Also to promote R&D and provide incentives for the local manufacturers. With Covid-19 affecting the supply and demand both, the industry seeks support from the government.
VingaJoy – Mr Lalit Arora, Co- Founder – Consumer Tech Industry
The year 2021 was a challenging one for every sector due to the Pandemic situation. Hence, there’re a lot of expectations from the Central Government about its new policies, and if they would announce sops for the industries to sustain. We hope that the upcoming budget will have provisions for strengthening the entire system and take progressive initiatives such as ‘Make in India’ & ‘Digital India’. In the upcoming budget, we are hopeful that the Government would continue extending its valuable support as initiated in the first term with the implementation of uniform GST, ‘Make in India’, besides offering a host of other initiatives that would help industries to come back to the platforms. Industries to develop newer technology in order to launch innovative products in order to compete with the current market scenario.
Mr. Sameer Kanodia – Managing Director and CEO of Lumina Datamatics Limited, one of the largest service providers and trusted partners for global publishers and eCommerce companies. “Everyone will be looking up to this year’s Budget for various relief measures. The pandemic has affected many industries, and it may continue for some time. Stimulus packages and lower interest rates have been a saving grace for the economy in the past. The IT and ITeS industry wants the government to give out better incentives, and it is expected that supportive measures may be provided at this time.Everyone pins their hope on this year’s Budget at the industry and an individual level.
We feel happy to be part of multiple platforms that increasingly see content creation and consumption. The print segment and the traditional content platform have been under pressure, and demand for digital content will only increase. Unfavourable steps from the government may dampen the enthusiasm. Similar headwinds are seen in eCommerce, with retail trade going digital. Physical barriers, such as lockdowns and restrictions, hamper the local stores. They are increasingly adopting the online route. Government’s stimulus to this sector will further boost its contribution to the economy.”

 

Agendra Kumar, Managing Director, Esri India, said, “The new Geospatial Data guidelines announced by the government was the first major policy change in decades and in order to derive full benefits from these guidelines, creating fresh data sets is very important. This can be done by government agencies under public-private partnerships as well as through the private sector, which can play a crucial role in the implementation of various government programs. And most importantly, focused investments through government schemes, is the need of the hour; hence, the upcoming budget should allocate funds for a period of 5 years for consumption by national mapping organizations like Survey of India and Geological Survey of India for updating existing data sets and creating new data sets, which will be an ongoing activity. The industry is also looking for a higher allocation of funds for the use of geospatial technologies in programs like Gati Shakti, Har Ghar Jal, and various other programs under the ministries of Jal Shakti, MoRTH, MoHUA. Geospatial data and technologies can help in more efficient execution, thus, it is important to expand the reach of GIS through sufficient funding support.”

UPI as a revolution from India, has reached only 20 Crore users of 118 Crore mobile subscribers in India, Government should incentivize new users, primarily the Low Middle Income and Jan Dhan Account holders who on-board on UPI for the First time, also provide incentives to Fintech’s into Feature Phone, Voice & USSD based payments space to help absorb operational cost of technology so that UPI revolution reach into nook and corners of Bharat. Mr. Mitesh L Thakker, Founder & CEO, MissCallPay, a Fintech Startup.

We hope that the Design Linked Incentive (DLI) scheme that the Ministry of Electronics and Information Technology (MEITY) announced last month for semiconductors is extended to other critical markets up the supply chain like motor controllers. The DLI Scheme offers financial incentives as well as design infrastructure support across various stages of development and deployment of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design over a period of 5 years. The scheme is a welcome step by the government as it encourages enterprises to invest in Design and R&D capacity but additional policies and schemes will be required to ensure the success of the government’s plans for India’s semiconductor industry.

 

In particular, we are looking forward to the DLI scheme being expanded to include end product designs which utilise semiconductors (embedded systems) like motor controllers. Motor controllers are sophisticated electronic devices and are crucial components for applications like electric vehicles and consumer appliances. Ensuring thriving domestic industries for these components will provide critical support to India’s budding contract manufacturing ecosystem while also fuelling growth and innovation in these energy-efficient products. This will align with multiple strategic goals like AatmaNirbhar Bharat and the government’s EV targets for 2030 to name a few. Omer Basith: Co-founder and CEO: Virtual Forest.

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