Industry heads welcome Sitharaman’s ‘Balanced Budget’
While most industry heads have lauded the Bharat Net allocation and impetus to start-ups, some players say there is an absence of big gun announcements and feel-good measures
Finance Minister Nirmala Sitharaman presented the Union Budget on Saturday with the assurance to increase the income of Indian citizens and strengthen their purchasing power.
Highlighting the importance of innovations that disrupt established business models, she made a quantum jump by calling data as the new oil. The FM has announced that the government will soon roll out a policy to enable the private sector to build data centre parks throughout the country. Experts believe that such a special economic zone will surely help them connect with people in a more impactful way.
The budget has also introduced a new simplified personal tax regime. With new income tax slabs/rates and a tweaked exemption structure, the FM has slashed the tax rate for those in the Rs 5-15 lakh tax bracket. While a new tax regime has been put in place, those who want to be in the old regime with exemptions can continue to pay at the earlier rates.
The government has also acknowledged the role of entrepreneurs in creation of both capital and jobs in the country.
Experts believe the Budget has the scope to revive domestic economic growth that has slumped to the lowest in the decade. Boosting physical infrastructure, expanding digital connectivity and growing use of technology in government functioning are important building blocks for long-term growth of the Indian economy, they said.
Ashish Bhasin, CEO, APAC and Chairman India, Dentsu Aegis Network, says: “I think this is a good budget in some ways because it has attempted to put money in the hands of the middle class through rationalisation of tax rates as well as has concentrated on looking after the agricultural sector, including introduction of best practices like storage for producers and other measures. However, I do feel that the expectations from the budget were much more and it does feel like a bit of a missed opportunity.
While it is good to see that the dividend distribution tax has been abolished, I expected more on the rationalisation of direct taxes, particularly the cess introduced over and above the tax rates.
It is good to see efforts being made to encourage new-age skill development as well as helping the start-ups and what's particularly interesting is the proposal to set up data centre farms all over the country. This will prepare India for the economy of tomorrow. It is also good to see attempts at simplification of taxation through digitisation but the proof of the pudding will lie in seeing its implementation on ground.
It would be fair to say that at best it is a mixed budget and while there are some encouraging decisions, enough does not seem to have been done for the situation the economy is in.”
Coming to the entertainment and media industry, experts are happy seeing the big steps in the digital sector. Although there was no direct reference to the media and entertainment sector in Budget 2020, the focus on improving India’s digital connectivity has impressed Girish Menon, Partner and Head, Media and Entertainment, KPMG in India. According to Menon, the given importance to digital connectivity bodes well for the sector.
Nachiket Pantvaidya, CEO, ALTBalaji and Group COO, Balaji Telefilms, feels that the overall budget has been exemplary with equal consideration given to entrepreneurship, job creation and youth of the nation.
Pantvaidya has appreciated the step to promote digital connectivity through the BharatNet programme and connecting 100,000-gram panchayats through an optical fibre network. This is one more important step taken in the direction of achieving the vision of a Digital India where rural India gets placed on the digital map.
According to Anil Rai Gupta, CMD, Havells India, Union Budget 2020 has managed to address some key issues around infrastructure spending, electrification and affordable housing that present a significant business opportunity.
Rai, particularly, sees this having a positive impact on the roadmap for the electrical and building segment players. “Further, the allocation of Rs 22,000 crore to power and renewable sector and Rs 27,300 crore for the development of industry and commerce for the year 2020-21 will accelerate growth opportunities for the electrical industry.”
While Rai sees this as a pro-development budget for the electrical industry, Prashan Agarwal, CEO of Gaana, has also appreciated the efforts of the government.
Talking to exchange4media, Agarwal commended the efforts of the government to boost the digital ecosystem in the country. “The increased focus on improving connectivity under the Bharat Net scheme and the emphasis on Artificial Intelligence will allow OTT players to offer bespoke and personalized solutions to consumers,” he added.
E-Commerce platform Snapdeal CEO and Co-founder Kunal Bahl says: “Thankful to the FM for accepting the start-up sector's request for ESOP taxation reforms. Also, the higher time and turnover limits for carrying forward of losses for start-ups will enable them to optimise growth decisions in the formative years.”
According to Rohit Kapoor, CEO, OYO, India South Asia: “A grant of Rs 2500 crore for tourism promotion and the development of 5 iconic archaeological sites and museums in the country are bright indicators of the renewed focus of the government on the travel and tourism industry.”
Sahil Vaidya, Co-Founder & Director, The Minimalist, says: “It is sure that the government is heavily focused on becoming an entrepreneurial superpower.”
According to him, by investing in the MSME sector, the government’s support towards new companies will go a long way in producing high growth business. Furthermore, the tax waiver on ESOPs will enable more talent to place their bets at an early stage for disruptive start-ups, which have the potential to become the corporates of tomorrow.
Sameer Makani, Co-Founder and Managing Director, Makani Creatives, believes that Budget 2020 aims at the betterment of all sections of the society. “The key highlight is certainly the tax regime where the government has proposed alternative tax policies and new rates to benefit the taxpayers,” he said.
“The vision to improve the start-up scene in the country will help in creating more job opportunities and further ensure economic growth. The skill development programme will enable overall personality development in comparison to Budget 2019. MSMEs will experience a 71% rise over and above the budgetary allocation,” Makani added.
Talking on this aspect, Chetan Asher, Co-founder & CEO, Tonic Worldwide, said that this Budget makes him optimistic about the growth of the digital ecosystem.
“The Rs 6,000 crore allocation towards BharatNet will give last-mile connectivity the impetus that it needs and pave way for digital transformation at all levels. Allowing private players to build data centres and encouraging the production of mobile and network devices will complement each other in growing the ecosystem,” Asher said.
Apaksh Gupta, CEO, One Impression is thrilled that the government has recognized data as one of the driving forces of the economy.
"The digital industry thereby requires a solid approach towards data centres, allowing to create incredible content and streamline/automate processes. This policy will create tremendous benefit the digital growth of the nation," Gupta says.
On Budget 2020, Amit Doshi, Founder & CEO, IVM Podcasts says, for digital media to flourish in India it’s important that there be minimal latency when people are trying to consume content. A strong policy promoting local data centre parks is one of the critical steps needed to move into an instant on-demand world, he added.
As the CEO & CTO of a start-up, Silky Singh of Ripsey, also thinks that this budget is very beneficial for start-ups. "We are very happy that the government is encouraging early-stage start-ups by setting up a seed fund. We believe that data is the new oil and is elated to see the government focus on it."
While the budget perfectly takes care of the start-ups, taxpayers and digital players, it also contains several clauses to strengthen the tour and travel industry too. Shailesh Gupta, CEO, YOLO Travel Tech Pvt Ltd, feels that this Union Budget has some well thought out initiatives such as reducing income tax for individuals and providing emphasis on connecting India.
He has welcomed the Union Budget's emphasis on making the transport sector more conducive by proposing Rs 1.7 lakh crore for improving transport infrastructure and provisioning Rs 2,500 crore to develop the tourism industry.
The strategic initiatives such as development of the Delhi-Mumbai Expressway and 2 other corridors by 2023 is being hailed as a step towards increasing trade and commercial activities and providing a livelihood to hundreds of thousands of families.
With tourism being one of the fastest growing industries in our country, Zubin Saxena, MD and VP Operations, South Asia, Radisson Hotel Group, says Budget 2020 brings quite a few favourable announcements like 100 new airports by 2024, Tejas trains for iconic destinations and restoration of museums and these would definitely lead to a positive impact on the industry.
Manish Rathi, CEO & Co-founder, IntrCity by RailYatri, has applauded the focus and thrust on road transport with Rs 1.7 trillion allocated towards the transport sector.
“The accelerated development of highways and the Delhi - Mumbai expressway will enable the growth of intercity bus travel. We see a wider industry focus and excitement in intercity transport due to the steps taken in Budget 2020,” Rathi said.
Further, talking about the importance given to start-ups, Rathi said it was encouraging to see the government taking concrete steps to encourage growth in the ecosystem.
“The removal of Direct Dividend Tax will attract more investors and in turn strengthen the ecosystem. The introduction of the investment clearance cell at the Centre and State levels will encourage people in the remotest parts of the country to become entrepreneurs,” he said.
KE Ranganathan, MD, Roca Bathroom Products Pvt Ltd, believes it was a well-thought out Budget giving due importance to all 3 focus themes - aspirational India, economic development and a caring society.
As a right step, spending by the government has been stepped up substantially to boost demand for various sectors. “It's a good budget with clear focus areas to revive the GDP growth and make people of India live a happy life in 2020-21 and beyond,” asserts Ranganathan.
Sanjay Vakharia, CEO, Spykar Lifestyles, also feels that this was a balanced budget and delivered what best it possibly could offer. However, he said the big gun announcements that the industry was expected to stimulate the economy were missing. The absence of feel-good measures has left the budget falling short of expectations.
“The industry had requested the government to bring in measures that would grow demand and spur consumption. But besides a few changes to the personal income tax rates, not much is seen impacting the demand and consumption story”, Vakharia added.
Speaking on Budget 2020 Akshaara Lalwani, CEO and Founder, Communicate India, states that, "The budget is rightly woven around Aspirational India, and following its implementation, it will result in a wave of entrepreneurship in our country which has been the core of innovation."
Union Budget 2020 represent Modi's commitment to the development of women and protection of their rights and helping them overcome hurdles they face, said Lalwani.
While, according to experts, most industries received significant consideration in the budget, Shobhit Mathur, Dean at Rashtram School of Public Leadership, feels the government could have thought something better for the education sector.
“The announcement in the Union Budget of almost Rs 1 lakh crore for the education sector is most welcome. However, supporting research and innovation and increasing access to high quality higher education should be the priorities,” said Mathur.
The government should use the funds to set up a National Research Foundation (as suggested in the Draft New Education Policy) focused exclusively on improving research and innovation, he suggested.
In conclusion, we can say Budget 2020’s focus on start-ups and technology will be a boost to companies that are executing cutting edge design thinking to enable the best of digital products for a booming digital economy.
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