India Inc’s expectations from Budget 2020

From tax cuts, to investment on infrastructure to spur demand, and increasing the healthcare budget, Indic. Inc. has various demands from the government as finance minister Nirmala Sitharaman readies to present the annual Budget 2020 on February 1.

This will be a crucial budget for the Narendra Modi government which returned to power for a second term in May, last year. The last year has also seen one of the worst periods of slowdown for the economy in decades, as various sectors are under stress, and there is a liquidity crisis caused by the fall of IL&FS.

Here is what India Inc. is expecting from the Budget:

Prashant Sharma, chief investment officer, Aviva Life Insurance

There are expectations of reduction in personal income tax rates to boost consumption and also reduction in dividend distribution tax and long term capital gains tax to improve the sentiment in the capital markets. These measures will increase the disposable income in the hands of the individual boosting the currently subdued demand and also support the massive divestment program that is running short the target. Given budget constraints, the government needs to maximise collections and spending efficiency in future.

Naveen Soni, senior vice president, sales & service, Toyota Kirloskar Motor

We would like the budget to spur demand without putting any additional burden on the government exchequer; one way to achieve this is by realising the scrappage policy for all old vehicles, the draft policy of which has been shared by the government.

Additionally, another thrust area would be to extend the income tax benefits available for electric cars to other vehicles as well, or to extend the depreciation benefit currently available only to companies and professionals to personal customers also.

Rajeev Chaba, president & managing director, MG Motor India

More work needs to be done to promote EV adoption in India not only in public transport but amongst private customers as well.

We hope that the government provides the right policy, incentives, and charging infrastructure to put more EVs on the road. It should also look at providing incentives to stakeholders for sourcing critical raw materials for EV battery manufacturing in India. This will enable a strong EV-centric ecosystem and will be beneficial for the long-term growth of this high-potential space.

The government should also look at offsetting the increase in GST costs due to the recently-introduced BS-VI norms to stimulate market demand for ICE vehicles."

Meena Ganesh, MD & CEO, Portea Medical

India has one of the lowest spending on healthcare globally. While it was stated that the country is set to increase healthcare spending to 2.5% of the GDP by 2025, it continues to stand at 1%. We hope to see some action around this in the upcoming budget. A major focus must be given to the home healthcare industry which is one of the ways to realize the government’s vision of affordable healthcare for all. However, current taxation policies and regulations do not cover home healthcare and diagnostic tests and other at-home aspects still form a large part of people’s out of pocket expenses. Home healthcare is not recognized as a mainstream sector and should be brought under the ambit of governmental schemes like the Ayushman Bharat yojna.

Trishneet Arora, founder & CEO - TAC Security

The government should prioritise promoting indigenous cybersecurity players in the vulnerability management space in the upcoming budget. Doing so will ensure that Indian organisations across industries have access to cutting-edge cybersecurity products and services that can streamline and strengthen their security profiles to make them ready for the digital age. It will also incentivise Indian cybersecurity companies to develop globally-defensible IPs that can add more momentum to the worldwide war on cybercrime.

Niranjan Hiranandani, president, ASSOCHAM

Fiscal incentives and sustained public investment on infrastructure will lead to a spur in demand and will be big catalyst for reviving the growth momentum in the economy.

Vikas Bagaria, founder, Pee Safe

Our expectation from the budget 2020 centres around government policy and regulation to enable ease of doing business through centralised policies. This will also attract more foreign investment opportunities in the segment. There is also a need to simplify the taxation process and make early-stage funding easier.

Nalin Agrawal, founder and CEO, Snapmint

The budget should cut down duties on oil to reduce transportation costs so that the cost of distribution in Tier II-V cities comes down. The government needs to continue showing strong support to these cities by trying to upgrade the urban infrastructure by upgrading the Mass Rapid Transit System (MRTS), airports; introducing special economic zones (SEZs) etc.

The smaller towns and cities classified as tier II, III and IV contribute more than 50% to ecommerce and online retail. However, there is limited logistical reach and reliability in these regions. Deeper penetration of courier services and further enhancement of postal services will go a long way in cementing the logistical roadblocks.

Bala Parthasarathy, CEO & co-founder, MoneyTap

There is an imminent need to revive consumption due to the current slowdown. So, income tax cut or a change in the tax slabs for the middle-income bracket might be down the line. Bailouts packages are expected in the automobile, banking, Real estate, telecom, and aviation sectors. The automobile sector is facing high pressure; hence, the government might launch targeted schemes to make vehicle ownership easier.

The e-commerce segment might face tight FDI rules to create more space for the homegrown brick-and-mortar stores. However, we can hope to see relaxed regulations and subsidies for the real estate industry. Apart from this, the government will try to stimulate rural spending through sops. We'll also see aggressive investments both in private and public sectors. And there will be further financial consolidation for cash-strapped NBFCs."

Jitin Bhasin, managing director, RupeeRedee and FincFriends

Unsecured loans up to ₹50,000 issued to first-time borrowers or to those with lean credit histories may be qualified as Priority Sector Lending. This will allow the introduction of better products and higher penetration of credit in a fast-growing, albeit credit under-penetrated segment. Optimisation of GST rates for financial services will further accelerate penetration of digital payment instruments as well as loans and investment products.

A differentiated view on KYC fulfillment may be adopted for smaller ticket personal loans which are disbursed directly into bank accounts of customers, otherwise, the processing and verification cost becomes relatively high. Double KYC can be eliminated as banks do carry out the necessary KYC process for account holders. On similar lines, all regulated entities may be allowed access to Aadhaar-based eKYC / video KYC may be permitted to increase overall productivity.

Indroneel Dutt, CFO, Cleartrip

The government should make provisions for boosting the domestic infrastructure towards global benchmarks in the upcoming budget.

We are also hopeful that the government will take cognizance and resolve challenges for the aviation industry which has already seen a tough year in 2019. For one, out of all the stakeholders in the aviation ecosystem, airlines operate with the most paper-thin margins. This, coupled with TCS (Tax collection at source), ends up hampering the working capital of airlines, giving rise to numerous operational difficulties. These obstacles are not only affecting the stakeholders and service providers but the consumers as well.

Sunil Gupta, MD & CEO, Avis India

I believe that the government should build on its recent push towards sustainability by prioritising the growth of the EV ecosystem. This can be done by promoting the creation of a strong and well-connected charging infrastructure on a pan-India level, promoting the setting up of EV battery capacity in the country and incentivising the adoption of EVs, especially for public transport buses, fleet operator cars and 2 and 3 wheelers. The road connectivity must also be improved between major urban centres and tier-2/3 regions to bolster the growth of the travel and tourism sector.

Alain SPOHR, managing director, Alstom India and South Asia.

The Finance Minister can address broader aspects in the upcoming budget such as ease of doing business where there are several challenges for manufacturing as well as dealing with project execution.

We would also like to bring to the Government’s notice the need for standardisation of rolling stock for metro’s that can enable to speed up manufacturing process and enhance resource optimisation leading to more cost-effective solutions and faster project incorporation.

Nagesh Basavanhalli, MD & CEO, Greaves Cotton Limited

The auto manufacturing and allied industry have endured one of the most challenging times in 2019 and is looking towards the year 2020 for revival. In this context, the industry needs a multi-facet budgetary intervention to jumpstart the demand and revive job creation in the sector.

The first aspect pertains to the future of mobility and the role of innovation in Cleantech being critical. Incentive programs through structured policy intervention is required to foster a culture of innovation fast-tracking technology development and deployment. In conjunction, the government should also extend certain benefits to last-mile EV fleet operators as a way to promote EV adoption for commercial movements.

The government will have to consider certain progressive policy measures. Key among these will be the roadmap for nation-wide vehicle scrappage policy, this will reduce emissions and generating demand in the sector.

Gaurav Bhalla, MD, Vatika Group

The past year witnessed the government taking a series of steps such as the injection of liquidity through the Reserve Bank of India. Measures such as granting industry status to the sector and relaxing the risk weightage norms for such real estate lending temporarily will enable banks to allocate a higher percentage of funds for realty projects including co-working spaces.  Besides the slashing of GST rate on properties developed for leasing, recognising the virtual office as a separate product, ensuring tax rationalisation on REITs and lowering costs of land acquisition will be a huge breather for the sector.

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