One of the biggest issues for SMBs has been lack of capital. And thanks to the pandemic, this problem has become more acute. The government should tap into digital channels for better distribution of credit. Today, a lot of SMBs have come online and OKCredit itself has a reach across 2800 locations. The startups working with SMBs can not only execute with speed but will also implement last mile delivery.
Last year, the government announced a stimulus package for MSMEs. We expect the government to sustain it through this year, given how vital SMBs are to the economy.
The increased impetus on "Aatmanirbhar" and loss of jobs has meant that individuals will be looking to start small businesses. The government should encourage them by empowering them with capital and by making it easier to start a business. As migration happened during the pandemic, SMBs have also been struggling with manpower crunch. It's an opportunity for the government to bring a formal structure to this form of employment, along with social security benefits. This will not only benefit the SMBs but the industry at large.”
Ketan Doshi, MD, PayPoint India said, "For the Payments industry, the honorable Finance Minister should reconsider the complete elimination of merchant discount rate (MDR) on Rupay and UPI transactions which will support a sustainable growth in digital payments.
To further the Financial Inclusion in the country, I feel all transactions happening under PMJDY should be exempted from the GST levy. Bank accounts opened under PMJDY are basically of low ticket size. However, the operating cost to service this under-served community is very high till it reaches a substantial base hence the exemption.
This Budget should have enough measures to infuse liquidity, benefiting small and medium enterprises, especially those in the hinterlands. PSU banks must lead this mandates in partnership with FinTech’s - either through co-lending or lead-generation model."
Vivekdeep Gupta, Country Head, India at R3 said, "Ever since the 2018 Union Budget where India’s former Finance Minister Arun Jaitley mentioned that blockchain technology is “welcome” and shared that the Indian government was “planning to explore the use of blockchain technology proactively for ushering in digital economy”, there have been multiple government-led initiatives that have been introduced with the aim of driving blockchain adoption across the country.
For the Union Budget 2021, I hope to see blockchain policies and statements of intent being clearly defined so that the blockchain industry can embark on the next phase of growth. The following focus areas outline the industries where I expect to see growth in 2021, and where I believe clarity on the government’s stance can positively impact each sector.
2020 was the year in which India took bigger strides towards cross border trade digitization. This was mainly driven by the COVID-19 pandemic—where trade restrictions, disrupted supply chains and trade flows exposed the structural flaws present and pushed the industry to the point of no return. In 2021, India’s renewed focus in cross border trade digitalisation could become a competitive advantage for Indian trade. A policy indication towards setting up a national Digital EXIM Trade Platform in the budget will play a huge role in driving adoption across the industry—from banks and shipping carriers, to corporates.
Tokenisation of real world regulated assets like bonds, stocks and real estate can create new markets, drive transparency, allow fractional ownership, reduce settlement times and open up enormous avenues of liquidity. However, there is still a lack of clarity in India on the regulations for the tokenisation of assets. An announcement from the Finance Minister that encourages regulators to act can open up a new chapter in Indian Capital Markets.
Central Bank Digital Currencies (CBDCs) are emerging as a major focus area of central banks globally, with countries like China and Sweden testing the use of digital currencies in the past year. Each central bank has its own reasons for pursuing CBDCs but I believe that most are driven by the policy priorities of its government. A clear declaration of intent from the government on CBDCs will allow the Indian central bank to define its priorities and adopt a focused approach towards India's own CBDC.
In 2020, we witnessed the Supreme Court overturning RBI's cryptocurrency ban. This helped to facilitate the opening of exchanges, though confusion around the taxation and legality of cryptocurrencies was prevalent in the industry. Clarity on the aforementioned pointers will allow the nascent sector to bloom and also open ancillary opportunities for enterprise blockchain in clearing and settlement, trade monitoring and custodial services."
On behalf of the Association of Herbal and Nutraceutical Manufacturers of India (AHNMI), a body of over 350 manufacturers, Sanjaya Mariwala founder-president of the association and Executive Chairman and Managing Director of OmniActive Health Technologies has shared key expectations from Union Budget 2021 to steer the growth of nutraceuticals industry,
"We expect the government to primarily focus on R&D and innovation in this Union Budget 2021. Our ask from the government is based on four pillars, which will empower the nutraceuticals industry in India:
- Establish a cross-ministerial task force under a Joint Secretary at the Ministry of Commerce and Industry that creates a plan and sets a goal to make nutraceutical into a $25 billion industry by 2030 and leverage the huge domestic and export potential that the AYUSH, Herbal and Nutraceutical industry offers.
- Institutionalise a PPP model to contribute monetarily and non-monetarily towards R&D and innovation needed at all levels of research, technology and manufacturing in AYUSH and Herbal sector.
- Funding support for MSMEs either at a zero percent or low rate of interest and tax incentives for investments made in R&D and Innovation.
- Initiate Bulk Drug Parks & Production Linked Incentive (PLI) scheme specifically for the Herbal and Nutraceutical Industry.
All these will contribute to USD 25 billion revenue generation for the industry by 2030 that currently stands at ~USD 5 Bn and a 15-20% Y.o.Y growth. The industry's growth will also lead to multiplying farmers' incomes by 4x and India becoming the No.1 source for export of top 20 herbal extracts."
Rohit Gupta, CEO, Mantra Properties on Pre budget expectations 2021 -
"Through the pandemic in 2020, the real estate sector has been amongst the few that recovered the fastest. We wish to see some effective work on policies such as uniform taxation, single window clearance for schemes and making more financing options available. Consumer affordability can also be enhanced through increased tax relief measures and lowering interest rates. The GST on construction materials currently impacts the construction costs significantly and thereby affordable homes are not getting really affordable. A rationalized GST bracket with Input credit will help the government work quickly towards Housing For All mission with cost effective homes".
Alok Bansal, Managing Director and Country Head, India at Visionet said, "With technological disruption gradually becoming a catalyst for the rise of MSMEs and startups today, it is expected that the government will make the necessary investments in technology hubs, which in turn will help in strengthening emerging technologies like AI, machine learning, and the Internet of Things (IoT). As the country is amidst a boom in digital technology adoption, this year’s Union Budget needs to make way for relevant measures to ensure that the right amount of thrust is given to tech build-up, favorable tax policies, and other opportunities will spell progress for the MSMEs.
The government also needs to make substantial efforts to set up a robust digital ecosystem for encouraging budding entrepreneurs and introduce measures that make it even easier to conduct business in India. This will be highly beneficial for startups and SMEs. It will further attract more companies and organizations to set up their offices or invest in India.
The government should pay attention to employing technologies that can be used to upskill or reskill the workforce employed by India’s MSME sector. Specialized tech centers can be set up and operated by the government and industry groups to equip the workforce with the required skills and perform AI-empowered hybrid jobs. Such interventions by the government have numerous upsides to them, starting with increased earning potential that will pave the way towards the strong economic growth of the MSME sector."
Seema Prem, CEO and Co-Founder, FIA Global said, “We are hopeful that the government focuses on capturing the lost ground on growth in FY21/22. Increased spending, putting money into the hands of people for reviving demand should be the focus rather than fiscal consolidation. With this budget, a lower corporate tax rate for FY 21-22 would be considerate.
This will help MSMEs bear the fallout of reduced business sentiment due to covid and help increase liquidity. Speaking from the investment angle, capital gain taxes and taxes on dividends should be removed to attract investments. Government should define policies for encouraging co-origination between banks/NBFCs/MFIs with Business Correspondents to enable burgeoning credit to MSME sector.”
Sanjay Tiwari, Director Strategy at Exide Life Insurance said, "The past year has been extraordinary in ways more than one. Though the uncertainty spurred by the Covid-19 pandemic has improved insurance awareness, a lot will have to be done to increase insurance penetration which is still quite low in the country. Protection plans have finally gained traction but the Union Budget 2021 must look at enhancing this awareness further and positioning life insurance as an important aspect of one’s financial portfolio.
We hope the Union Budget will create a separate category to avail tax benefits for premiums paid towards life insurance. This will allow policyholders to diversify their investment into various life insurance products to meet their financial goals comfortably while also availing tax benefits. We also hope the Budget will address the high GST rate on protection plans which is a deterrent for potential buyers at the moment.
While digitization has taken prominence with e-KYC and paperless documentation, we expect the Budget to do away with paper documentation completely. This will make purchase process and servicing of policies even more seamless."