India Inc pins hopes on Budget 2021

2020 was an unprecedented year, and to that end, it appears that the Union Budget, which will be presented on February 1, could also likely be a landmark one. In fact, the finance minister, Nirmala Sitharaman, herself indicated recently that this year's Budget would be like no other. So it is natural for business sectors to have high hopes from the budget, particularly this year.

Here are some views from across India Inc., spanning various sectors, on what the Budget 2021 should ideally be about.

The government made necessary and timely interventions through liquidity infusion, fiscal support and reform driven investments in the initial leg of relief measures. Further, the Central Bank and the Central government rolled out other critical measures including loan moratorium, relaxation of NPA classification norms, one-time restructuring of corporate and personal loans (including home loans), etc.

These measures and concessions have definitely helped in enhancing consumer sentiment, thus boosting consumption, resulting in increased traction in the real estate sector. While we have seen a continuance of recovery in the fourth quarter which started in Q3 2020, the actual market transaction volumes continue to be lower compared to pre-Covid levels.

The demand for coworking office spaces has seen tremendous growth in the last few years and the post lockdown scenario is bringing in a wave of new opportunities for the coworking players. Medium-to-long-term fundamentals remain sound as companies seek out alternative options to reduce costs and capital expenditure. Now, more than ever, flexibility is crucial and hence coworking spaces, with their natural flexibility and inherent readiness to add value are best positioned to adapt and redefine the future of work and workspace. Companies will strive to be agile and prefer to build more flexibility into their real estate portfolios. As companies look to resume business, redesigning and restructuring of existing real estate will pose yet another challenge, however coworking spaces will be able to respond to design changes required post-COVID-19 quicker and more efficiently than traditional office spaces. However, we have some important expectations from the upcoming Budget 2021 to further propel the growth in the sector.

Coworking has changed the very concept of the workplace today and the market scenario of the real estate industry. As coworking is playing a vital role in the economic growth of the country, the Government should recognise it under special schemes like REIT and provide tax benefits to handhold the industry for better growth. Financial support to start-ups would also create greater demand for coworking spaces. As several entrepreneurs who opt for coworking solutions are early and mid-startups, the government could look at reducing the present rate of registration charges and stamp duty to register documents at registrar offices as high rates additionally burden them. This will give a fillip to both start-ups and coworking spaces. Presently, the rate of TDS applicable on coworking services is 10% as coworking companies provide renting of both movables and immovables. As the industry is going competitive, it will be good if the rate of TDS on coworking services is reduced. It will enable us to provide real estate solutions to clients at economical rates and will also help in better flow of working capital.

As remote working has taken root in the context of the pandemic and corporates have been making a beeline to coworking spaces to cut costs and capital expenditure, hence support to coworking spaces in this context would be a fillip to their growth and overall economy. There is also need to reduce GST to the lowest slab for upcoming startups as it will make a significant impact on their budget. Currently, coworking spaces charge a GST of 18% to all clients and this is a big impact to startups. Hence, it can be reduced drastically. Apart from these, input tax credit under GST is also an important issue that concerns the sector. The government should enable co-working firms to claim input credits on work contract and construction services supplied as detailed under GST provisions.

This would check increased outflow of cash coworking firms are currently experiencing. Coworking firms are also hoping that input tax credit under GST be extended to developers so that it could be passed on to companies who lease out space and thereby reduce their overall costs. Institutional capital is crucial to coworking spaces which are dependent on funds for multiple factors and we expect advancement in this direction. The government must also allow banks to give loans to coworking firms against the cash flow of coworking players. Also, to increase funding in coworking sector, the government should provide investment benefits to investors of these coworking spaces.

Further, in order to expand from the metro cities to the tier II and tier III markets, the sector is also looking forward to an added infrastructural push from the Government and a single window clearance system would help quicker setting up of coworking spaces. The coworking sector, which is now the new mantra for small and large-scale enterprises all across the country is further expecting improvement in the ease of doing business.

As the country recovers from the Covid-19 pandemic, it is hoped that the budget 2021-22 kick-starts the economy while boosting expenditure on education and healthcare infrastructure. In this regard, the government could plan to forego fiscal restraints and increase capital expenditure in these particular sectors. There should be transparency and accountability in every rupee spent on education and ensure equitable distribution of funds. It is expected that the budget should look at boosting private investments and give a fillip to avenues of employment generation. The focus should be on upgrading the basic infrastructure and digitalization of educational institutions, measures to encourage student retention, and comprehensive teacher training programmes to remain updated with global learning standards.

Positive learning from the pandemic indicates that there should be a significant allocation of funds to online education, affordable digital devices, and should be complemented with high-speed internet access to the remotest parts of India. The budget should also look into resource building and improve the teacher-student ratio as nearly 250 million students are expected to enroll in schools by 2030 which would need 7.5 million highly trained teachers to address the massive student population.

The industry expects a round of measures to be announced to help revive the real estate sector. A slew of measures including RBI’s repo rate cut of 140 bps, resulting in a fair lowering of interest rates, a six-month moratorium on EMIs, monetary and fiscal assistance to real estate companies at the project level brought some operational efficiency in the latter part of 2020. But the sector needs additional consideration and continuing impetus to boost demand in 2021.

The government also needs to focus on strengthening the consumers capacity by way of more efficient tax rebates and increased tax reliefs to prospective homebuyers. Development firms are already tackling challenges of liquidity to complete on going projects. Moreover, with homebuyers looking primarily to invest in ready-to-move properties, under-construction projects are being neglected.

In such a scenario, there is a need to boost demand for under-construction homes as well. Developers seek a waiver on GST for under-construction homes. The present GST rate on under-construction properties is 5% minus the Input Tax Credit benefit for premium homes (valued above INR 45 lakh) and 1% for affordable homes (valued under INR 45 lakh). A waiver on GST will reduce the overall burden on developers and making the the property value more viable and the pricing competitive.

Given the renewed focus on the insurance sector in light of the COVID-19 pandemic to enhance insurance coverage, the government is expected to leverage the Budget 2021 to mitigate individual and industry distress to the extent possible. Reforms in two key areas – tax and foreign direct investment (FDI) – are expected to be undertaken, as a part of the Budget 2021.

In the insurance sector, the low insurance penetration in non-mandatory insurance like health insurance has been a cause for concern for several years. We expect the Government to tweak the tax regime to incentivise the taxpayer to obtain insurance through measures such as, enhancement of tax rebates under Section 80C and Section 80D of the Income Tax Act. Having said that, I would also want the Government to reduce the Goods and Services Tax currently payable on insurance premiums. These tax relaxations and incentives will go a long way in increasing insurance penetration India.

On the FDI front, I hope for the Government to liberalise the FDI Regime through the Budget 2021 and raise the current FDI limits from 49% to 74% of paid up equity capital. Easing the FDI limits will provide a much needed impetus to the insurance industry, which is capital-intensive and requires sustained infusion of capital, and will fetch greater interest from investors for such infusion as they will exercise control and avail better returns. This will also enable existing promoters to unlock better value from their investments in existing insurance ventures. Further, provision of control to foreign insurers will result in introduction of global best practices, innovative products and technologies of trusted multinational insurance brands.

With the effectiveness of RBI One Time Restructuring Circular being completed and the IBC continuing to remain in suspension, there is a legitimate expectation of reforms for resolving the stress in the banking system. Increasing the time for NPA classification, providing prudential measures for resolution even for cases below INR 1500 crores, etc.

With the advent of the netting act last year and opening up of the OTC derivatives market, there is also an expectation of increasing the coverage of credit derivatives on other instruments.

While the Emergency Credit reliefs have provided some respite to the corporate sector, the effects of the pandemic continues to exist and the need for extending such reliefs continues to surge. The budget ought to meet some of these expectation.

The honourable Finance Minister has already expressed her intention to push big ticket reforms in the 2021 union budget. Industry leaders and citizens have high expectations that budget announcements will lift the Indian economy from the pandemic slowdown and accelerate employment. The measures announced for boosting construction and housing are critical since real estate contributes more than 8% to the Indian economy and is an important employment generator. Today, the final cost of a home in India is loaded about 35% with taxes, premiums and stamp duty charges.

A rationalisation of these levies for the next few years, can bring down the cost of housing and accelerate demand. The industry has been requesting for a GST removal on under construction homes to bring it on parity with ready homes which have no GST levy. This is a valid demand and I hope to hear something on that front. The removal of GST on under construction homes, will go a long way in boosting sales and improving cash flows for developers.

From a life insurance industry perspective, we have a few recommendations for the upcoming Union Budget 2021 which we hope will be addressed.

Section 80C of the Income Tax Act provides for tax deduction of up to Rs. 1,50,000/- on various investments such as insurance policies, PPF, principal amount paid towards home loan, ELSS, NSC, NPS amongst others. With so many investment options available, this section is too low and too cluttered. Our recommendation would be to either keep a separate deduction section for insurance policies or there should be an increase in the limit under Section 80C. This would allow customers to consider insurance not just as a tax-saving tool, but as a long-term means of fulfilling their financial goals.

Also, As per the Goods and Service Tax (GST), life Insurance falls under the 18% tax rate. Since insurance is an essential requirement for every individual for proper financial planning and protection, we believe that a reduction in GST from 18% to 12% or even lower is required. Reducing the GST rate would play a significant role in increasing the penetration of life insurance in the country.

We also suggest, that the current exemption limit for TDS on insurance commission is Rs. 15,000/- under section 194 D of the Income Tax Act. Raising this exemption limit would provide a greater impetus to insurance agents. Further tax laws could be aligned to the regulatory minimum of 7 times the cover for individuals above the age of 45 years.

Pension products at par: If a policyholder purchases a pension product from an insurance firm, he has to pay a tax on the annuity. Making annuities tax-free would help to grow the demand for this segment in India and make these products more attractive to customers. It would also help to level the playing field with the National Pension Scheme (NPS) which is allowed a further tax exemption limit of Rs. 50,000/- over and above the Rs. 1.5 lakh under Section 80C.

We propose an increase in FDI from 49% to 74%, in line with AMCs which are at 100% FDI and banking which is at 74% FDI. Insurance is a capital intensive business and the Indian partners may be reluctant to infuse the capital required. With this pandemic, some companies might also need capital infusion to conserve Solvency Margins. Finally, it gives the foreign promoter an opportunity to buy out its cash-strapped Indian partners.

After five years of the Digital India Mission and Post COVID, right from businesses to government, have realized the need to implement digital technologies, especially IoT. We witnessed accelerated pace of technology adoption during lockdowns, especially in the healthcare and education sector. However, given that the pandemic is still not over, a robust digital infrastructure is required to sustain large, medium and small businesses, the outlook needs due diligence to promote more local innovations under the ‘Make in India’, ‘Atamnirbhar’ campaigns.

Though the government made few announcements to narrow the digital divide in 2020, for enabling a global competitive edge with natural growth, the Government needs to support with special investment package for facilitating the Small to Medium Enterprise sector’s technology adoption and implementation. This will go a long way in making India Atmanirbhar and a global leader. I believe that the Government will come up with schemes to help boost innovation and the economy. The upcoming budget needs to focus on integrating technology with data privacy and security designed at the core, across multiple sectors like manufacturing, automobile, and healthcare.

Regulatory changes implemented in the last two years—starting with the imposition of LTCG in 2018, abrupt changes from providing Intraday leverage by stockbrokers and later providing relief, etc-have confused brokerages, fund managers, investors, and traders alike. Despite challenges and the pandemic, capital markets saw rapid growth last year. The industry now needs a holistic, unambiguous, and innovation-friendly regulatory regime for the emergence of a BigTech in Financial Services from India. Because multiple entities such as the RBI, SEBI, IRDAI and others govern the FinTech space, there can be an overlap of regulation and contrasting views. A single entity or window for regulatory support to tech-intensive fintechs cutting across verticals can avoid confusion and bring much-needed clarity.

Fintechs are also in need of a coordinated, calibrated, and graded regulatory framework to achieve more UPI-like breakthroughs. Besides such regulatory support, a dynamic exit ecosystem, easier access to listing on exchanges, and tax exemptions for investments can bring more capital into fintechs and drive innovation in new business lines and products and diversification into new geographies.

Covid-19 has had a massive impact on the Amusement Parks business with no revenue for more than eight months at a stretch. Considering the initial investments and gestation period the GST for the Amusement parks should be reduced to 12%, from the existing 18%. Amusement parks cater to all customer segments and the share from B2B customers is less compared to walk-ins.

It would be good to exempt Amusement Parks from e-invoicing and treat us at par with the cinema halls. Amusement Parks should also be exempted from any state-level tax burden like local body tax (LBT). In addition to GST a few states also levy an additional 10% LBT. This will have an overall impact on the viability of the Amusement Park business. I look forward to some of these being addressed in the upcoming budget.

The economic recovery which is evident now, has proved that the fundamentals of the Indian economy remain strong. The growth momentum across key sectors witnessed in the post-lockdown period is encouraging. India Inc. is now looking forward to a Budget that will strike a right balance between need for addressing fiscal considerations and the requirement to propel growth, thereby further consolidating the gains now seen. Already, the honourable Union Finance Minister has indicated that the next Budget will focus on boosting growth. At Toyota Kirloskar Motor (TKM), we believe that focus on long-term growth and a further improvement in the investment climate are necessary for continued sustainable economic development. For this, the Union Budget 2021 is a good time to bring in more policy measures, reforms and simplification of laws which can further strengthen ease of doing business.

The scrappage policy which has been under consideration of the Govt. for quite some time, has the potential to simultaneously reduce pollution, fossil fuel consumption as well as boost demand for new vehicles thereby meeting many key objectives. We are hopeful that this will find a mention in the upcoming budget along with enhanced actions to usher in reforms in land, labour and liquidity, which will help in attracting investments and improve competitiveness too. Rationalisation of custom duties on SKDs and CKDs should also be considered as it will be beneficial in the long term for faster market introduction and localisation of newer & enhanced technologies.

We are also looking forward to measures that can provide the necessary impetus for the manufacturing of xEVs and their parts in India. In order to attract investments for local xEV parts manufacturing it is necessary that Government policy support extends to all xEV technologies proportionate to the social benefits they provide. This will help for a faster, smoother and disruption free technology shift to electrified vehicle eco-system.

Grappled by the Covid-19 recession, the common man has been dealing with disruptions in income and cashflow, because of which they have been looking up to the banking sector for access to credit. For the Union budget 2021, all of us will certainly look up to the Government for various incentives, tax cuts, subsidies, faster credit access and other benefits to cope up with the Covid-19 pandemic. With the world’s largest immunisation drive already underway, we are positive that economic recovery will be the key focus of the Government.

If I had to sum up my expectations of the 2021 budget in two terms, they would be: cautious optimism. The government has been swift in its response to the Covid-19 pandemic and reducing its impact on our industrial sector. I expect this momentum to continue through increased spending on infrastructure and measures to spur economic revival. There is a pressing need for higher government investment that greatly outweighs the potential implications of a higher fiscal deficit, one of the areas of focus so far.

To boost digital payments and enhance credit accessibility, the industry hopes that the government will continue its agenda to strengthen internet infrastructure and connectivity in tier II and tier III cities. Digital and financial literacy are critical to pushing the next wave of digital payments. The government will also focus on better governance, simplification of compliance and regulations, besides the emphasis on job creation, and a swift action on sectors that are under chronic stress.

In strategizing for 2021, we need to find comfort in the fact that our fiscal deficit is still lower than that of many developed economies and shown consistent improvement over the years. We must retain a positive outlook and approach the new FY with cautious optimism. Rolling out of big-ticket projects will bring much-needed impetus in the form of more jobs and ease of doing business. This will move money into the hands of the taxpayer, improve consumption and savings, both of which have taken a hit in recent times.

The new National Education Policy is an ambitious one and focuses on: improving the quality of higher education at all levels, increased use of technology in education, equity in education, teacher education, and cultivating research for the social good. However, the government expenditure on education is too meagre. The current public expenditure on education in India has been around 4.4% of GDP. This needs to be significantly increased to 6-7% of GDP with combined contribution of Centre and State governments. Similarly, if we want to give due importance to research, the research and innovation investment, which currently stands at about 0.7% of GDP as compared to 4.3% of GDP in a small country like Israel, needs also to be enhanced to at least 2% of GDP. In Covid times, we have seen the importance of indiginous research in different sectors, be it Agriculture, Healthcare, IT and Manufacturing sectors. This will indeed give a boost to the proposal on creation of the National Science Foundation, as envisaged in the National Education Policy. The NSF will act as a robust and efficient support system to facilitate research in higher education institutions, and is being eagerly awaited.

The Economic Survey challenges the status quo and calls for bold policy measures to achieve long term sustainable growth. By questioning the established norms like sovereign rating methodology, and corroborating the growth with overall upliftment of the large population, both in rural and urban India, it sets the tone for this year’s Budget to go aggressive on reforms, simplification of tax and regulatory laws and ease of doing business.

Union finance minister, in the forthcoming Budget, would be having a dual challenge of fuelling demand through incentives as well as managing the fiscal deficit of the government. The pandemic and the subsequent lockdowns have dealt a severe blow to the economy in general and though the subsequent opening up of economic activity has shown some promising signs , but for businesses in general, the mounting debt as well as challenges of adhering to protocols for dealing with the pandemic and general sluggishness in demand is still a worrisome aspect.

The effect of disrupted supply chains and complete stop of industrial activity has affected the logistics industry negatively and continues to do so. The rising prices of diesel, low availability of truckers, unreliable and higher priced railway transportation, multiplicity of documentation and huge compliance burdens on the industry are some of the things ailing the logistic sector in the country. The logistics costs in the country at around 14% of the GDP are still amongst the highest in the world and this is a key disadvantage for the Indian Industry to compete in the international markets.

The forthcoming budget should at the first instance create an enabling environment for the digitisation of documentation and seamless transfer of documents from one agency to another reducing the compliance burden on the logistic service provider. Further , currently every corporate in India has to file more than 150 compliances to various government departments through the year , this needs to be rationalised and reduced. Integration of various databases of government and improving ease of doing business should be at the forefront of governments agenda. Lastly, India has very limited multi modal integration of transportation and no single platform where all the modes of transportation compete with each other. Developing a digital platform for such integration would go a long way in promoting logistics as an industry in the country .

With the thin margins logistics industry runs on, digitizing tax regime could have a huge impact on both profitability as well as attracting new players to the industry. The tech layer over the logistics setup that has started developing in the last 5 years needs a positive push, there have been a lot of start-ups working with Machine learning and Blockchain to improve the conventional setup and decrease wastage wherever possible. Such start-ups, working solely improving the logistics setup through tech need to be incentivised and helped in the initial stages of their journey. Easy registration process and access to setup funding can help create a nudge in the technology hubs to work towards solving the pertinent issues with conventional logistics setup.

eCommerce logistics has had a very good run as far as economics are concerned but has also shown signs of despair at times. Being the most tech enabled sector amongst the logistics segment, advancement are still required in the overall network optimization to take up unplanned demands. Scattered warehousing needs to give way to consolidated warehousing, something that Pickrr is working on aggressively. Better approval processes to setup warehouses and easy tax rules with respect to combined warehousing and eCommerce shipping would help solve some of the prevailing pain points.

Adversity never comes alone, accompanying it are the seeds of opportunity that if nurtured, will sprout, grow and flourish. The past year has been tough for businesses and industry with numerous challenges resulting from the global lockdown. However, the global rollout of the vaccine and a revival of the economy have led to an air of optimism for the future. It is against this background that the budget will be presented this year.

This would require the budget to focus on proposals that revive demand and boost economic activity. A budget that leads to growth and revives industry, provides incentives for capacity creation, encourages investments, and creates jobs. A budget that increases spends in infrastructure development, which will have a ripple effect on the economy.

With regard to Indian pharma and healthcare, despite the challenges, the industry has performed relatively well. To give the necessary fillip to the sector, we expect the Government to form enabling policies that will empower the industry to establish India as the pharmaceutical hub for the world.

While the budget should continue to ensure wider implementation of schemes like Ayushman Bharat, as against the marginal increase in budget allocation for healthcare every year, the budget this year should put health on top priority and increase spends on public health substantially from previous years.

We hope that the Budget addresses some of the trade issues being faced by the steel industry. Primarily, it should focus on providing incentives on R&D which will be a robust step in developing newer grades of steel. The Budget should also give the steel industry tax holiday for expansion projects and allow it concessional rates for GST. The Rs. 400 per tonne GST Compensation cess on coal should also be abolished and the royalty on iron ore should be removed. The domestic industry also expects a reduction in basic customs duty on key raw materials like anthracite coal, metallurgical coke, coking coal, and graphite electrode in the Budget. It should also give special incentives and take measures to strengthen the demand in the country and help to align with the government’s target of 300 mtpa by 2030.

With regards to the logistics industry, it will be welcoming news if the present Union Budget introduces new strategies and relaxations that will drive faster movement of COVID-19 vaccines across the country to ensure accessibility and availability of the same. This will also play a key role in helping the Indian economy bounce back from the impact of the pandemic.

To ensure that vaccines reach every nook and corner of our country the government will need to ramp up investments towards digitalizing logistics and shipping industries. Digitalizing core vaccine transportation operations will not only empower the government to gain a micro-level view of vaccine movement, but it will also help them save millions in transportation costs, build faster single-window clearance processes, shrink transportation cycles, and significantly mitigate risks related to damage and theft.

The benefits of digitalizing logistics operations will go beyond the efficient transportation of vaccines. While the government ramps up efforts to make conditions favourable, brands must also set efficient, convenient, and sustainable logistics delivery networks to ensure customer satisfaction

The government should introduce plans in place to expedite finalizing our National Logistics Policy, ensure faster completion of Dedicated Freight Corridors, simplify GST structure to boost logistics efficiency and strengthen policies that drive enterprises to reduce their carbon footprint.

In India trucks cover 250-270 Km/ day against the global standard of 700 Km/ day. The Government needs to invest in a unified platform to set up the green corridors. This can be achieved by integrating fastag, e-waybill and eVahan data. This will also help in getting visibility to the Shippers and Carriers.

The government should also leverage this budget to focus on completing the country’s first Multimodal Logistics Parks (MMLPs) in Assam. It will significantly reduce trade costs and increase cargo capacity.

We hope this budget will be about measures to bring about growth and resilience from the pandemic. As we witnessed during the pandemic, a large part of this growth will be brought through bringing in the unorganized players to mainstream business and a key theme will be Offline to Online - O2O. O2O will lead to transparency in payments, transactions, compliance with taxes, labour laws, and larger employment opportunities for the youth. Specific to E-Commerce and E-Grocery, we believe this is an opportune time for the government to try to rationalize GST rates, compliance processes, FDI policies and ride the buoyancy revenue curves to make it a win-win situation.

The year 2020 has been a roller coaster ride for each one of us and has negatively impacted economic growth worldwide. The common man has been struggling with disrupted cash flow and income. What people are looking forward to is relief in the form of tax cuts, subsidies, easier access to credit from the government which would increase the cash flow in the system and also help in increasing the purchasing power of consumers.The pandemic has taught us that we should be prepared for the unexpected. Hence, the Government should focus on increasing the infrastructure of the Country which would also help us in economic growth. With regards to the hosiery and textile industry, we expect export incentives and expeditious disposal of benefits to the exporters. We are also looking at better labour codes as they have an impact on the high labor-intensive industry such as ours. We expect better investment allowance, subsidies, interest subventions, etc for digitization and streamlining the logistics sector.

The Covid pandemic has underscored the importance of healthy living and maintaining our physical and mental health. To encourage individuals and families to proactively invest in preventive healthcare, wellness programmes for people suffering from lifestyle related ailments should be brought under health insurance coverage. This will also help reduce the burden on the curative healthcare infrastructure in the country, which would be better served to addressing communicable and life threatening disease and ailments. Higher resource allocation for improving the Skill Development ecosystem in country would also be a welcome move. The fact is skilling / reskilling / upskilling of youth is a critical need given that over a third of the country’s population will be in the 10 to 34 age group in 2021 and as per some estimates over 300 million youth need to be given skills training for ensuring gainful employment for them.

India’s public healthcare spending today remains below the government’s own target of the 2.5% of GDP. The pandemic further exposed the gaps in our healthcare infrastructure. My hope is that the upcoming budget will accelerate the move towards the target and increase the allocation to healthcare expenditure to strengthen the public health infrastructure and improve the accessibility and affordability of healthcare for the masses.

2020 has been an unprecedented year and we hope that the upcoming budget will address the challenges faced by businesses and propel the economy towards faster recovery and growth. Digital technology and connectivity continue to be the cornerstone of India’s growth and leadership. The pandemic accelerated the shift to digital and we need to maintain this growth momentum, as it will have a cascading effect on creating efficient businesses, new jobs and all round development. R&D (Research and Development) spending must be increased in order to accelerate digital transformation and jumpstart education with focus on next-gen technologies, skilling, reskilling and upskilling programs, to nurture our young talent pool and thus accelerate our journey towards an ‘Atmanirbhar Bharat’ (Self-reliant India).

We also hope to see focused initiatives to boost consumer sentiment, accelerate infrastructure development, move towards a lower interest rate regime and increase investments in key areas including healthcare and education. From an IT (Information Technology) perspective, we expect the government to create a fund for product companies along with extended SEZ (Special Economic Zone) benefits in the new normal of remote working, besides nurturing an ecosystem for deep tech startups in areas including blockchain, artificial intelligence, augmented reality and virtual reality. India is on the path of a higher growth trajectory and the vision of a $5 trillion economy can be achieved with focus on economic growth and development.

Undoubtedly, the budget for 2021-22 is expected to act as an inflection point in propelling the Indian economy back into action from the aftermath of the pandemic. While boosting investment, job creation and increasing expenditure on infrastructure and healthcare are expected to remain a priority for the Finance Minister, the past year has shone a spotlight on the need for rapid digital transformation in both the public and private sector as it sits at the core of how businesses, big or small, optimize their performance.

In the past few budgets, the Government has taken adequate steps to give the technology sector its due, however, as we move into the new financial year, it would be of utmost importance to now lay emphasis on ease of adoption for digital infrastructure and technology for everyone. India still lags in research and development, local component manufacturing and innovation and therefore incentives should be given to the sector to support the existing research and development centres and additionally create new centres with world-class infrastructure. I firmly believe that the vast pool of talent combined with the research infrastructure can create new cutting edge skill differentiation in the deep tech sector to enable India to take centre-stage and unlock India’s potential in the global tech space. As a long-standing partner to the Government of India, NEC has significantly invested in creating centres of excellence and with the 5G revolution knocking on our doors, it would be recommended to infuse funds to enable the economy to harness the power of 5G. The advent of Industry 4.0 and its impact on the daily lives of Indian citizens, the technology sector deserves a well-thought-out thrust to enable competitiveness, drive innovation in the country and help the nation realize the vision of truly becoming self-reliant.

Grappled by the COVID-19 recession, the common man has been dealing with disruptions in income and cashflow, because of which they have been looking up to the banking sector for access to credit. For the Union budget 2021, all of us will certainly look up to the Government for various incentives, tax cuts, subsidies, faster credit access and other benefits to cope up with the Covid-19 pandemic. With the world’s largest immunisation drive already underway, we are positive that economic recovery will be the key focus of the Government.

If I had to sum up my expectations of the 2021 budget in two terms, they would be: cautious optimism. The government has been swift in its response to the COVID-19 pandemic and reducing its impact on our industrial sector. I expect this momentum to continue through increased spending on infrastructure and measures to spur economic revival. There is a pressing need for higher government investment that greatly outweighs the potential implications of a higher fiscal deficit, one of the areas of focus so far.

To boost digital payments and enhance credit accessibility, the industry hopes that the government will continue its agenda to strengthen internet infrastructure and connectivity in Tier II and Tier III cities. Digital and financial literacy are critical to pushing the next wave of digital payments. The government will also focus on better governance, simplification of compliance and regulations, besides the emphasis on job creation, and a swift action on sectors that are under chronic stress.

In strategizing for 2021, we need to find comfort in the fact that our fiscal deficit is still lower than that of many developed economies and shown consistent improvement over the years. We must retain a positive outlook and approach the new FY with cautious optimism. Rolling out of big-ticket projects will bring much-needed impetus in the form of more jobs and ease of doing business. This will move money into the hands of the taxpayer, improve consumption and savings, both of which have taken a hit in recent times.