Budget Expectation 2020 By Industry Leaders

Mr. Nishant Pitti, Co-Founder & CEO, EaseMyTrip, said, “We are hopeful that Budget 2020 will have special focus on the travel sector. India is a culturally rich & diverse country with immense potential for travel & tourism. Ranked 6th globally, I feel E-visa facility should be allowed to more countries to encourage more foreign travelers to visit India. In my opinion, there is a need to bring-in relaxation in taxes for the Indian Airline Industry considering the thin margins they work on. In addition to this, the hospitality & hotel industry can show tremendous growth if the GST on hotels is reduced. In order to promote domestic tourism and inspire people to travel more, there is a need to improve the internet connectivity in Tier II & Tier III cities. This will ensure a growth in domestic travel while promoting the Digital India Campaign. Safety is an important factor while considering travelling to a foreign land. Lately in India, safety for foreign nationals has become a big concern. For this, adequate budget should be allotted to state tourism boards to ensure welfare & adequate protection for tourists coming to India.”

Mr. Tarun Mathur, Co-founder and CBO, Policybazaar.com, said, “Only 8% of the population was covered by any form of insurance including term, health and the percentage of pure protection led insurance is abysmally low. “We do not have a social security system like the one prevailing in Europe where the government takes care of all the end-to-end requirements of the citizen post-retirement. In fact, the only available instrument of social security for citizens is insurance. Thus it is important for the government to adopt a sandbox approach towards insurance in Union Budget 2020 and incentivize people to make the nation socially secure.”

Mr. Akash Sinha, Co-Founder and CEO, Cashfree, said, “FinTech has boomed in 2019, with India witnessing the highest adoption rate globally. As one of the fastest growing FinTech markets in the world, we have a lot of expectation from this year’s Union Budget, owing to several measures issued by the government to create a sound and profitable environment for start-ups while enabling Digital India. The government has paved the way for video KYC and digital KYC with the amendment of Prevention of Money Laundering Act (PMLA, 2002) and the issuance of RBI norms, clearing the path for a paperless and remote form of KYC compliance. Given the advantages of digital KYC for conducting hassle-free digital on-boarding, these benefits need to be extended to businesses as well, since the current norms apply only to individuals. With the announcement of zero MDR on UPI and Rupay cards, the government’s vision is to foster digital transactions in the country. We are hoping that the government will relax its stand on zero MDR given that banks and other service provider could be discouraged from providing merchants in rural areas with payment infrastructure and digital payment options, since the complete withdrawal of these charges would make it difficult for them to absorb the costs. We are optimistic that the government will take innovative routes to build a cashless economy, such as establishing data centres to facilitate smooth and hassle-free digital transactions even in remote, rural locations. The need for common legal framework to deal with consumer issues for the entire financial sector has become inevitable. While there have been several moves made to simplify taxes, compliance and regulations, we are looking forward to a policy framework that enhances the ease of conducting business for startups in India. To address the current economic climate, we anticipate a further slash on the corporate tax slab, of 22 per cent, for startups, to encourage new and existing ventures, as well as the continuation of the benefits of the waiver on Angel Tax for DPIIT registered startups. With the e-commerce sector spurring growth in the digital payments space and Fintech companies fuelling India’s ‘USD 5 Trillion Economy’, we hope that favourable tax benefits would be granted to startups in the fintech space.”

Mr. Sunny Kataria, VP Auto, OLX India, said, “Given the ongoing tumultuous times for the automobile industry, I expect the industry to kickstart recovery by the mid of FY 21 in order to adjust to the market reaction towards the transition to the BS6 transmission norms. Hopefully, the budget will focus on reducing the GST from 28% to 18% for passenger vehicles- a long pending demand from the industry, a clear incentive structure for the scrappage of old cars and most importantly, an economic stimulus to lift the morale of the industry. OEM’s will look to spruce up sales of older BS 4 models before the 31st March deadline and seek to make BS 6 models more affordable for the consumer as prices of new passenger vehicles will increase by 5-10% owing to the transition. This, in turn, would augur well for the pre-owned car market in 2020 since this would lead to a fresh supply of cars in the pre-owned car market owing to the price differential between BS 4 and BS 6 cars. The anticipated increased supply to the pre-owned-car market due to the ongoing liquidation of BS-4 cars will also help bridge the gap between the higher demand and insufficient supply for cars.”

Mr. Nakul Kumar, Co-Founder & COO, Cashify, said, “While the Indian economy has hit a rough patch, the refurbished phone sector in India has been on an all-time high last year. As a part of the startup ecosystem and the refurbished industry, we expect the Union Budget 2020 to give a further boost to the sector by strengthening the startup quality norms, so that good quality and authentic players are available in the market. The recommerce trend is breaking all barriers of selling smartphones and influencing pre-owned smartphone users to sell their smartphones without taking hassles of negotiations and prices. Thus the budget should focus on promoting a more safe and secure ecosystem and at the same time democratize technology for an amplified and unified reach.”

Mr. Subir Kumar Chowdhury, MD & CEO, JCB India, said, “After a strong 2018, the Earthmoving and Construction Equipment Industry saw demand compression in 2019. The slowdown was attributed to a variety of factors, especially challenges around liquidity and fresh investments. Revival of demand is important at this stage and the Government has been cognizant of this. It has been taking steps to revive growth. Noteworthy being the significant announcements in Infrastructure spends and a reduction in Corporate tax rates. Additionally, the Reserve Bank supported through improved liquidity and lowering of interest rates. The importance of developing infrastructure for growth of the economy is critical. Any project has both, immediate as well as long term benefits in terms of employment and demand consumption. The recent announcement of Rs. 100 Lakh Crores in Infrastructure over the next five years is welcome as it comes at a time when the Industry has built capacity and capability over the years, and parts of which have remained underutilized in the immediate past. It is also heartening that the announced Infra spends are in projects that are spread across power, renewables, roads, railways and urban development and will help create more growth drivers for our Industry. The investment cycle needs to re-instated, and large infrastructure projects are vital to achieve that. Thus, it is critical that the upcoming budget keeps the momentum going and creates funding opportunities to be able to see this allocation through. Energizing the PPP (Public Private Partnership) model and a re-look at asset re-monetization can play an important role in addressing funding related constraints. NBFCs will continue to play an important part for financing our equipment and thus the regulatory framework for NBFC growth will also be essential. Infrastructure will continue to be a key growth driver in the investment lead growth philosophy. The Construction Equipment Industry is critical in fulfilling the $5 trillion economy dream of India and as an industry we are hopeful that the Budget helps un-lock the opportunities that the sector has to offer.”

Ms. Munira Savai, Country Manager, QAD India said, “With the implementation of GST and new policy announced around E-Invoicing, the government has demonstrated that it values technology led governance for transparency and efficiency. Over a period of time, digitization has gained its rightful importance focusing on ease of doing business. For budget 2020, the government needs to show commitment to support the manufacturing sector by introducing favorable policies and also investing in Infrastructure. Further, incentivizing the use of emerging technologies like 5G, IoT, AI, etc. for the development of a strong and resilient domestic Manufacturing Sector is imperative. Also, in the forthcoming budget, the government can plan to embrace and adopt disruptive technologies to enhance efficient governance with e-citizen services.”

Mr. Rajesh Magow, Co-Founder and CEO-India, MakeMyTrip

Impact of Slowdown:

“The current slowdown has had an impact on the travel and tourism industry too with overall demand getting impacted. In case of domestic air ticketing the growth rates have come down from teens to single digit and international air ticketing number have been flat year-on-year. Most hotels chains have also reported much slower growth during the current fiscal.

MMT’s expectations and demands from the budget:

“Tourism, which comes under the service sector in India, is a money spinner. It offers immense work opportunities, and the backward linkages and multiplier effects extend to manufacturing industries and even agriculture. So the impact that Travel & Tourism growth can have on economy is immense. To give a fillip to tourism within India – there needs to be budgeted funds for developing top tourist destinations. Much as infrastructure-related work may fall under state government’s purview, we should pick 20 key destinations that we want to put on global tourism map and bring them under a national program/body to promote Tourism. The budget for this national tourism program/body should be carved out from the Union Budget in order to make requisite investments to improve infrastructure. The government should consider giving export industry status to Tourism Industry.

Tourism is one of the highest export earners in terms of Foreign Exchange which stood at around 29 USD Billion in 2018. Additionally, The government should consider incentivising travel within Indian. With outbound travel figures over 25 million, MICE and Weddings are moving out of India. To tap this segment, we need to motivate people to travel and explore more of India for events.

We have come a long way in linking our cities through world-class airports, excellent highways and a wide network of trains, but last-mile connectivity remains a challenge and there is a lot left to be desired in terms of tourism-specific infrastructure. We need to think of integrated development of the tourism sector to enable competitiveness and sustain long-term growth. The connectivity between tourist sites or development of tourism circuits needs to be taken up on priority so that one can explore places without accessibility blues.”

Ola Mobility Institute

India’s new mobility economy market is expected to touch $90 billion by 2030, making it a key driver for India to become a $5 trillion economy.

As India marches to become a global hotspot for electric mobility, a critical step in that direction is recognizing battery swapping as a viable charging mechanism for two-wheelers and three-wheelers. This requires policy interventions such as including battery swapping in FAME-II, treating electric vehicles and batteries as separate entities and extending demand incentives for both, reduction of GST on Li-ion batteries and earmarking funds for R&D to develop batteries locally.

Overall, the mobility economy can unlock massive livelihood opportunities for India and easy access to finance will be a critical enabler towards inclusive growth. The Jan Dhan-Aadhaar-Mobile (JAM) trinity can be augmented to usher holistic financial inclusion through utilization of alternative data such as digitized cash flow available with platforms. The government must capitalize this data by :

a) Building trust-scores for lending

b) Streamlining KYC norms through uniform tiered KYC and eKYC

c) Extending credit guarantee schemes such as MUDRA to those engaged on digital platforms

Mr. Harshvardhan Lunia, Co-Founder & CEO at Lendingkart, said, “The last Union Budget saw sustained push towards a digital-first economy, which is remarkable. Over the last year, the Government has introduced a series of measures including interest rate cuts to revive GDP growth, spur investments as well as impetus to MSME financing through NBFCs. With digital and mobile payments on the rise, RBI efforts by forming a committee to deepen digital payments in the country has been encouraging. Realising the vast potential of the NBFCs sector in its contribution towards economic growth and improved access to banking products for the unbanked, the Government has initiated multiple steps to support this sector, however real implementation and intended effectiveness on-ground is yet to see concrete success. In the upcoming budget, we look forward to progressive policies which enhance financial inclusion through geographic reach, promote increased use of technology as well as efforts to rejig NBFC funding through PSU bank participation in fund raising plans of small and mid-sized NBFCs. The fintech industry also remains hopeful for strategic measures from Ministry of Finance and Reserve Bank to monitor actual performance of announced measures already taken by Government.”

Mr. Mayank Kumar, Co-Founder & MD upGrad, said, “I strongly believe if the forthcoming Budget 2020 should encourage investment in reskilling amongst the professionals by allowing them a tax-break privilege under Section 80C from the Income Tax Act, 1961, like that of Mutual Funds or Life Insurance. For Start-ups, ESOP taxation should be relaxed and trading in unlisted companies should be as good as in listed companies. Nonetheless, talking about the policy impact in the education sector, an increase in private EdTech providers should be encouraged and set up funds under the MHRD Scheme (Ministry of Human Resource Development) for uplifting the quality-education for those who are economically weak.”

Mr. Ankit Dudhwewala, Founder, CallHippo & SoftwareSuggest, said, “Last year has been tough for the Indian economy. With the GDP growth rate going down deep, I believe there should be some short-term remedies to stabilize the economy first, combined with a well-structured long term plan to keep all the industries in faith. Looking at the meetings the Prime Minister has had with the industry experts in the past few weeks, I am sure something fruitful has come out of it and will reflect in the budget. As far as the IT sector is concerned, cybersecurity is still a major concern and we should see some dedicated allocations for that. Making digital payments mainstream is still a major priority of the govt which directly benefits all-digital businesses like us. Expecting some big steps in that area too. Overall, the budget 2020 should be and most likely to be a mixture of some sweet and some bitter announcement.”

Mr. Bhavin Turakhia, Founder & CEO, Flock, said, “The two important sectors that should be an area of focus in the coming Union Budget should ideally be – technology and startups. Last year, we saw India jump 14 places to be 63rd among 190 nations in the World Bank’s ease of doing business ranking, a testimony to the fact that India has made significant strides in making it easier for startups to set up their operations. In the upcoming budget, we would like the government to bring in measures to ease the compliance and filings guidelines for startups and eradicate the current penal provisions. Also, with technological disruption being a catalyst for the growth of startups today, we expect the government to make significant investments in technology hubs that will help strengthen emerging technologies such as artificial intelligence, machine learning, internet of things etc. As India is witnessing this boom in digital technology adoption, it has put us on the global map and we need to ensure that we take the relevant steps to ensure that our country is at the center of the fourth industrial revolution.”

Mr. Kazim Rizvi, Founder of The Dialogue

Fintech Budget Requirements

The budget should help startups grow

However, while the fintech space continues to grow, few roadblocks like the liquidity crisis, taxation issues, etc. are affecting it in terms of revenue and working capital.

Mr. Bishan Jain, Director, Goldmedal Electricals, said, “The Indian manufacturing sector has become one of the most attractive destinations for investments in the recent past. While the government has already unveiled plans to boost growth in manufacturing, construction sectors and improving infrastructure, the government should ramp up its efforts in the upcoming budget. The government must underline its continued commitment towards electrification of villages across the country. Furthermore, it should definitely put in additional efforts on solar energy projects, with the right incentives, which can be a valuable avenue for income generation and also help combat climate change. As consumers are becoming more aware about environment sustainability, there should be more focus on promotion of sustainable solutions that will help in reducing India’s carbon footprint.”

Mr. Avneet Singh Marwah, Director and CEO of Super Plastronics Pvt. Ltd, a Kodak brand Licensee, said, “The Indian Government’s vision is to become a 5 trillion-dollar economy by 2024-25 and 2020 is a very crucial year for the economy. The areas of improvement are taxation, infrastructure and promote companies which are making in India. The implementation of GST was indeed a historical decision for the growth of the economy but for a developing nation like us, we should be having 2-3 slabs under 18%. In order to revive the GDP, India needs to have a lot of infrastructure, but first we need to complete the projects which are already in the process. This will help manufacturers like us to invest and manufacture more and help ‘Make in India initiative’ to be a successful model for the economy. India is an import driven market and It’s time for us to focus on exports to contribute to the economy which will give a boost to our GDP.”

Mr. Kshitij Nagpal, President, Association of Property Professionals (APP) Delhi NCR, said, “Capital gain to a large extent should be exempted from taxation. At the end it’s tax paid money being invested by the buyer which is getting him the returns. This in return will enhance people to avoid holding back transactions or taking premium by hidden ways. To make it an inviting proposition GST needs to be bought done drastically in real estate as it’s unnecessarily putting heavy burden on buyer. On rental also gst needs to be rationalized so that the returns become justified. Interest on home loan and business loan is still too high as compared to other parts of the world where funding is easier and available between 2-4% per annum.”

Mr. Manav Kapur, Executive Director, Steelbird International, said, “As the automotive and its ancillary industries went through a tough time in the last few quarters and the situation is still alarming for the majority of players, the Finance Minister should come up with the effective remedial measures to address the current challenges. As the country is going to adopt the BS-VI norm, which will eventually lead to price escalation, to compensate it, the Government should significantly reduce GST on automobiles. Besides, to boost market demand, the interest rate should be lowered on car, bike, and personal loans. Also, the industry seeks softer road and transport policies to overcome the existing slowdown.”

Sqn.Ldr. Prerana Chaturvedi, CEO & ED, Evolet- Rissala Electric Motors Pvt Ltd., said, “The long-term benefits of EVs are multi-fold still the relatively higher cost of acquisition of an EV is a bottleneck in its adoption. Unarguably, lowering the GST on electric vehicles from 12% to 5% has benefited electric vehicles manufacturers. However, GST on raw materials is still a concern for manufacturers in addition to import duty on technologies for e-drivetrain and other EV related products. The government needs to do more to support the localization of battery technology that power electric vehicles. Lithium-Ion Batteries that form close to 40% of the cost of an electric vehicle attract GST of 18%. The government should consider reducing the GST rate and encouraging companies to set up battery manufacturing plants in the country through tax exemptions. For startups it will be a great deal if the government does some kind of tie-ups for Li-ion cells companies, Electronics parts companies which can reduce down the cost and MOQ for the raw materials. Also unlike the conventional automobile sector, financing has been a major concern for EV industry as Nationalised banks are currently not offering any financial help over electric vehicles. I think if the government solves the financing issue, it will aid in meeting the target of E mobility 2030 set by the government. Also there’s a lack of the right engineering talent in the country in building an ecosystem for electric vehicle and battery manufacturing. The government should encourage private players to invest in more such research and development projects with Tier I and II universities and campuses across the country. This will build local talent and reduce our reliance on other countries for the import of advanced electronics and battery technology.”

Mr. Rakesh Kharwal, Managing Director, India/South Asia & ASEAN, Cyberbit, said, “The Digital India initiative has done a remarkable job and as Digital India 2.0 gets contemplated, the focus of the government should be to build superior trust in technology. It must earmark at least 10% of the technology budget for cybersecurity initiatives. The government must add stimulus to the market segment and the economy at large. Perhaps, a good way of doing it can be to include simulation-based cybersecurity training solutions like Cyber Range in the Skill India campaign. We also hope to see more provisions for academia to spend on new technologies like Cyberrange and expand their facilities to help students with exposure to real-time applications. It will help in addressing the gap of more than 1 million professionals in the Indian cybersecurity industry while also aptly positioning the segment for the ripe global market.”

Mr. Mallikarjun Kukunuri, CEO of Niruthi Climate and Ecosystem Services, said “even though India is a nation largely driven by agriculture, there are still large knowledge gaps that keep farm yields low. Apart from providing agricultural policies, the government is also focusing on increasing productivity, efficiency and output across the agriculture business value chain by trying to boost the agri-tech sector. In order to achieve the government’s vision of doubling farmers’ income by 2022, we need to move from a reactionary to a proactive approach to provide impetus to the overall growth. Incentivising alternative agri practices and adaptation of technology will lead to improved efficiency and performance of marginal farmers, which dominate the Indian agricultural space.”

Mr. Mallikarjun Kukunuri, CEO, Niruthi Climate and Ecosystem Services, “Mallikarjun Kukunuri has been the CEO of Niruthi since 2016. Under his leadership, Niruthi expanded from a research consulting organization to a leading product and services company that is changing the crop insurance, commodities and banking sectors in India. He led the development of Niruthi’s partnerships with Weather News Inc, Japan, the world’s largest weather company and, the International Crops Research Institute for Semi Mallikarjun has 12 years of business leadership and operations experience. In his previous positions with IBM, Hitachi and the CK Birla group he handled portfolios in excess of a Billion INR every year and played a vital role in retaining market share at each of the companies. Mallikarjun holds a Bachelors of Technology from Javaharlal Nehru Technological University (JNTU), Hyderabad. He obtained an MBA from the International Management Institute (IMI), Belgium and completed the executive program in international business at IIM, Calcutta.”

Mr. Rohit Manglik, CEO, EduGorilla, said, “Online education complements school education and has played a significant role in India’s digital transformation story. It enables remote, interactive, convenient and on- the -go learning for students. The Union Budget should reduce GST rates for online education, live classes from 18% to 5%. This would make it more affordable and encourage more professionals to go for upskilling. To provide a fillip to primary education, the budget should place an emphasis on enhancing learning outcomes through teacher training as well as improving infrastructure.”

Swathi Bavanaka, Co-founder & COO, Evibe.in, said, “For the year 2020, we are optimistic that the Union Budget will renew focus on startups and the fiscal impetus they need. Last budget missed the mark when it comes to major inclusions for the technology startup sector, we are optimistically looking forward to a course correction this year. As India is becoming a hub for home grown start-ups, it would be great if the Government can take this up as a priority area in the budget, allocate more funds and announce policies that would encourage the startup sector. This will help create a more welcoming ecosystem for the industry players and catalyze innovation.”

Mr. Mandeep Singh, CEO and Executive Director, JSL Lifestyle, said, “The country has been witnessing a dip in GDP and therefore reflecting the need to introduce fiscal measures which will further boost manufacturing and production. With an intent to benefit the end-users, the measures will further profit the local manufacturing industry and augment sales, helping the country take another step towards a more stabilized economy. Despite the economic slump and challenges prevailing in various sectors with regards to decreasing the cost of production and making domestic steel prices more competitive, we should focus more on creating an investor-friendly climate, benefitting the country in the long run. With major sectors like infrastructure, aviation, automobile and Railways etc. being heavily dependent on this apart from various consumer demands, it will be great if the levies, customs and taxes are relaxed and can further provide relief to boost production and demand. With global conditions also favouring the growth trajectory, these measures will add momentum and to the current situation.”

Mr. Pradeep David, General Manager, South Asia, Universal Robots, said, “The current economic slump has to be tackled in smarter ways by introducing landmark policies and stronger governance which will be beneficial in the longer run. The upcoming Union Budget has to incorporate these factors to bring back the required liquidity and put the economy on track. The automation sector has lately become a significant contributor to India’s mission of digital empowerment, and the current government is fast-pacing the development to enable SMEs & MSMEs to further compete on a global level. Banking on high-end technology and automation for the manufacturing sector will prove to be a game-changer, also helping in stabilising and flourishing the Indian economy. According to the data of the International Federation of Robotics (IFR), on average, 99 robots are deployed per every 10,000 employees. India lags with the number being just 4 robots per 10,000 workers-reflecting the dire need to make technology and robotics accessible to all. Thus, to fill that void, relaxation in taxes for robotics could neutralise the slowdown and further increase the rate of manufacturing in the country, inviting more FDIs and trades. The measure would encourage small and medium-sized businesses to accelerate their profits, quality, and productivity, as well as contribute to the economic growth of the country.”