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Union Budget 2021-22| Industry leaders’ perspectives on the union budget

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Reactions from industry leaders on the Union Budget 2021-22

With the release of the Union Budget 2021-22 by the Union Finance Minister Nirmala Sitharaman today, here are a few reactions from the industry leaders on the budget.

Rajan Navani, Vice Chairman & Managing Director, JetSynthesys, said, “I’m happy to see the Union Budget 2021 is a forward-looking one, with massive spend commitment by the government across many sectors combined with large divestment and monetisation, along with the privatisation of two public banks and one insurance company. I’m particularly excited about the government’s commitment to set aside an outlay of Rs 50,000 crore for the National Research Foundation, the setting up of a new Fintech hub, and an allocation to incentivise digital payments. Also, the move to exempt senior citizens over 75 years from filing tax returns if they are only on pension is a great tribute to their contribution to India. The extension of the tax holiday and exemption of capital gains will also enable businesses and startups to focus on growing their business. Most importantly, the proposed use of data analytics, AI and Machine Learning, optimising the Ministry of Corporate Affairs and tax portals, is indicative of the New India of 2022.”

Gurpreet Singh, Managing Director, Arrow PC Network Pvt. Ltd. (Titanium Partner – Dell Technologies) said, “Regressive rules had certainly affected the ease of doing business for many organizations and start-ups. However, the government’s announcement of establishing a separate administrative structure especially for ease of doing business will help many organizations benefit in the future. Revision of the definition of small companies by raising the capital base to Rs 2 crore from the current limit of Rs 50 lakh will give a big boost to companies affecting their monetary status. The move to make changes in tax evasion has instilled confidence in common man that they would not be facing tax harassment. Earmarking Rs 1,500 crore for promoting digital payments and changing the tax audit limit from Rs 5 crore to Rs 10 crore will benefit many and will allow transparency. Hiking of FDI from 49 per cent to 74 per cent is a good move. The announcement that the forthcoming census would be digital shows the government’s initiative to practice what is being preached. On the other end, the emphasis on education, power and infrastructure sector will support the overall development of the nation.”

Shibu Paul, Vice President – International Sales at Array Networks, said, “The fiscal deficit for 2020-21 was estimated at 9.5 per cent of GDP, the government’s aim is to bring it down by 5 per cent of the GDP by 2025-26 which is ambitious and certainly a welcoming initiative. The highlight in this budget is the announcement of the Asset Reconstruction Company and Asset Management Company to help banks tackle bad loans which have been a call by economists for many years. The government’s proposal to use data analytics, AI, machine learning for the Ministry of Corporate Affairs’ database is a boost to the digitalization where the Version 3.0 of MCA-21 includes additional modules for e-scrutiny, e-adjudication, e-consultation and compliance management. Connecting more than 1,000 mandis into E-NAM is an excellent move. Setting up a separate administrative structure for ease of doing business would help many organizations from various sectors. The faceless dispute resolution panel would help the citizens by keeping them safe from tax harassment. The importance to the healthcare sector, the stress made in green energy projects like keeping aside Rs 1,000 crore for solar energy and Rs 1,500 crore for renewable energy along with voluntary scrapping policy and the weightage given to education has made this budget wholesome.”

Also Read: Union Budget 2021-22| Key Takeaways from Finance Minister Nirmala Sitharama’s Budget Announcements

S Sriram, Chief Strategy Officer, iValue InfoSolutions, said, “Budget 2021 was positive given the challenge around higher fiscal deficit due to low income. The key highlights of the budget include an additional allocation to health and wellbeing in a COVID ravaged year with Rs 35,000 crore allocation to COVID vaccination with four Indian vaccines shortly. It is also great to see 35 per cent enhancement of capital expenditure at Rs 5.54 lakh crore to revive economy around Road, Rail and Metro infra. It is encouraging to see focus around disinvestment with two PSU banks and an Insurance company being planned for the year with Rs 1.75 lakh crore target. FDI in insurance enhancement from 49 per cent to 74 per cent augers well for a country with very low penetration. The voluntary vehicle scrapping policy is set to help the auto sector and address the pollution challenges. While Rs 20,000 crore PSU bank recapitalisation looks on the lower side, reopening of IT assessment cases period reduction from six to three years should give comfort to the tax payers on documentation. Planned LIC IPO should set the mood right on disinvestment. The government could have put more money in the hands of people to sustain the recovery along with sops to Business on CapEx investments.”

Prashanth GJ, CEO, TechnoBind, said, “Increased spend on Healthcare and Infra are welcoming moves – as this will have a cascading effect on the economy in the medium term. Whether it is Highways or Railways the enhanced allocation is very encouraging. Also interesting is the ‘Bad Bank’ which will help address the stressed assets through an ARC model. This will help keep the Banking system insulated from the spike of bad loans that are expected now – thereby allowing them to do business as usual by giving the much-needed support of credit in the system. The MSME allocation has been doubled – this too will help SME businesses in general which is a big market for us in the country. Support for furthering the idea of Digital India is also seen and it is very welcome – encouraging digital payments and the use of AI/ML in governance is exciting. Emphasis on Digital Payment is very good as this will go a long way in bringing in financial inclusion. Provisions in the GST and customs duty rationalization is something we look forward to.”

Dr Ajay Data, Founder and CEO, VideoMeet, said, “The announcement by the Honorable Finance Minister regarding the startups was much required at the moment and will help the fledgeling startups with meagre resources to continue with their business operations without worrying about the compliance with complex taxes. The announcement comes soon after the PM announced the setting up of Rs 10,000 crore fund for seed funding of startups. These moves by the government make the intent of government clear that it wants to promote entrepreneurship and help the enthusiastic young entrepreneurs in the country. The setting up of separate administration structure to promote ease of doing business is a laudable move by the Finance Minister. Also, as predicted startups were given importance under this budget and the industry is poised to be greatly benefited with the Tax holiday extended by another year till 31 March 2022.”

Rajendra Chitale, CFO, Crayon Software Experts India, said, “It is a welcoming move that the government is emphasizing on the implementation of data analytics, AI, machine learning for the Ministry of Corporate Affairs (MCA)’ database. We also welcome the digitization process and the introduction of e-scrutiny, e-adjudication, e-consultation and compliance management in MCA 3.0. After the adversities of 2020, tax holiday for another year to startups is a commendable move for the government. Again, the tax audit bar raised to Rs 10 cr for those transacting 95 per cent digitally shows the government’s commitment towards bringing in greater transparency. Apart from that the government’s promise on removing GST anomalies and the amount of Rs 1,500 crore earmarked for a scheme to boost digital payments are other welcoming moves for a stronger digitized India.

Lalit Mehta, Co-founder & CEO, Decimal Technologies, said, “The promise on CAPEX should help in generating employment and also solve for long-term growth objectives. Some of the items that would see effect faster than others would be the FDI cap increase for Insurance, which will surely lead to a better-capitalized Insurance sector and better reach of Insurance to the masses. Privatization of PSBs is a welcoming move. This should lead to a few acquisitions of PSBs by private lenders. Hopefully, this will increase the reach of the private sector to rural markets and will enable these markets with new products and a digital ecosystem. The fintech hub in the GIFT city is a great step towards enabling the fintech industry and shows the government’s recognition of FinTech as a significant play in the financial sector. This should set the road for the creation of the required regulations and frameworks for FinTech to work with conventional lenders and banks. Fiscal deficit and achievement of divestment targets is something that needs to be under close watch. Any slippage on any of these can put a spanner in some other initiatives. Overall a positive budget that tries to balance between long term and immediate needs.”

Also Read: Ministry of Finance to go ‘paperless’ for Budget 2021

Ashraf Rizvi, Founder & CEO, Digital Swiss Gold & Gilded said, “The Sensex witnessing a rise of over 4.5 per cent signals the positive sentiment towards the Union Budget 2021. The gold and silver market received good news with a rationalization of import tariffs. The reduction in import duty on gold and other precious metals from 12.5 per cent to 10 per cent, will make jewellery cheaper in the domestic market for the buyer, as India continues to be the second-largest buyer of gold in the world. Moreover, the announcement of SEBI as the regulator for gold exchanges in India is also a welcome move as it hints at deeper regulation of digital transactions of the yellow metal, which is critical to earning consumer trust. Overall, a very positive shot in the arm for the Indian economy that looks to help India and its citizens recover in 2021 after a very difficult 2020. We at Digital Swiss Gold and Gilded will continue to ensure savings to our customers so that more investors consider gold as a critical asset in their investment portfolio.”

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