Union Budget 2019-20 will be presented by Finance Minister Nirmala Sitharaman on 5 July. The industry is looking forward to a slew of reforms from an import duty cut on gold items, lowering of Aviation Turbine Fuel prices to allocation to education. Industry heads weigh in with their wish list:
TS Kalyanaraman, Chairman & Managing Director, Kalyan Jewellers
We are hoping for a reduction in the import duty on gold from 10 percent to 4-5 percent. This would help buoy up positive business sentiments, and a cut in the duty structure will ultimately benefit the consumer. A step in this direction will also promote the import of gold through legalized channels resulting in increased revenue for the government. We look forward to organized jewellery retail chains playing a more pro-active role in the Gold Monetisation Scheme which would help the government in reaching its targets of mobilizing gold from consumers across the country. Jewellery purchase through EMIs is another option that we would like the government to look into.
Vishal Suri, Managing Director, SOTC Travel
We believe the biggest boost to growth and employment today will come from the services sector, especially the tourism industry. India is a large market for travel and tourism. With 70 airports at new locations and additional second airports; expansion of existing airfields, all developed under the UDAN Scheme that aims at facilitating regional connectivity, will prove to be an impetus for the tourism industry. With the new government, the need to lowering ATF pricing and strengthening infrastructure at tourism sites is of key importance. This will encourage travel and affordability. The government also needs to review the aviation policy and address the challenges especially bilateral policy, and help create an ecosystem that recognizes and supports the aviation industry's viability. Rationalizing the GST rate for hotels and incentivising the private sector will boost tourism since the sector holds huge potential for driving growth and generating employment.
Mahesh Iyer, Executive Director and Chief Executive Officer, Thomas Cook (India)
The travel and tourism industry is a crucial contributor to the growth of the Indian economy with a powerful multiplier impact on employment generation and we are hence confident that the Union Budget introduced by the government will strengthen the industry with continuity of its tourism-friendly policies to give fillip to India's Inbound, Domestic and MICE segments. We look forward to increased focus and sustained delivery on key initiatives like UDAN aimed at enhancing the regional connectivity and affordable air travel, Heritage City Development and Augmentation Yojana (HRIDAY), integrated development of pilgrimage destinations through Pilgrimage Rejuvenation and Spirituality Augmentation Drive (PRASAD), increased allocation towards enhancement of the e-Visa initiative to include additional countries, development of new tourism circuits and attractions, along with increased focus on infrastructure " roads, railways, airports, waterways and sanitation to catalyse growth.
Vineet Chaturvedi, Co-founder, Edureka, e-learning company
The future of the Indian professional sector, especially IT and IT services, hangs on how soon they can adopt the skills relevant to future economies. Investments in skills and education can be directly mapped to a country's commitment to economic growth, and at the moment, a re-skilling allowance for all tax-paying individuals can be a catalyst for faster and wider adoption of skills. There is already talk of the government planning on incentivising corporates to invest in skilling their workforce, but a rebate that treats skills on par with allowances such as HRA, LTA, DA is the need of the hour to help retain our country's reputation as a skilled powerhouse and give a boost to our GDP. Also, a re-classification of re-skilling in GST to treat it as a necessity and not a luxury would help accelerate up-skilling among Indian professionals.
Yajulu Medury, Director, Mahindra Ecole Centrale, Hyderabad
With one of the youngest populations, India can reap the benefits of demographics only if our youngsters are well educated and become responsible citizens contributing to India's growth story as we move forward. Providing quality education means the government increasing its budgetary allocation on education from the present levels to a high 5-6 percent of GDP like in the developed countries. The draft National Education Policy, which stresses this, should be accepted and the necessary budgetary allocations made to ensure that education becomes a tool for economic development in our country.
D A Prasanna, Founding Chancellor, NIE University Mysore
Private universities must have access to central research grants, as much as government Universities. Internships in professional education have been made compulsory by UGC. Companies have started charging colleges to take interns. Interns should get paid Rs 10-20K/Month so that companies use the intern properly.To encourage women taking up teaching and research profession, the government should encourage Child Care (pre-school or playschool or crÃ¨che), where the mother can safely leave the child and get back to her teaching and research career.
Anil Nagar, Founder and CEO, Adda247, preparation platform for all government exams
The Union Budget for 2019-20 has touched the right notes for increasing the demand and growth in the economy. It will help in stabilising the incomes of the lower and middle-class sections of the society including the farmers and workers of the unorganized sector by reducing the risks. It will automatically increase the purchasing power of the lower and middle-class families. It indeed is a game changer for the country.
Tarun Chugh, MD & CEO, Bajaj Allianz Life Insurance
In the absence of a social security system in India, we hope the Finance Ministry considers the positive features of annuity policies and revise the current tax treatment to make all annuities from a pension/annuity contract tax-free. This will encourage long term savings among people for securing their old age. We also hope to see a rate cut in the tax rate levied on insurance products, thus encouraging more and more people to buy life insurance policies. Further, with the rising cost of living coupled with inflation and burgeoning healthcare costs, we hope to see a change in limit for deduction under Section 80C. The present limit of Rs. 150,000 gets exhausted by other alternatives such as Tuition fees, Housing Loan Repayment, mandatory Provident fund deduction by an employer, etc. Hence, we feel a separate limit should be provided for deduction towards Life insurance premium as Life insurance contributions are the only source of protection (life cover) and long-term savings to the public at large. Alternatively, the existing limit of Rs.150,000 should be enhanced (i.e. from Rs.150,000 to Rs.300,000) since the combined limit of Rs.150,000 is too low to cater to all the contributions it covers."
Anirudha Taparia, Executive Director, IIIFL Wealth Management
The Finance Minister should focus on reforms, rather than any short-term stimulus. While maintaining fiscal discipline, the overall objective remains to achieve inclusive growth. The government will have to pay attention to the skill development of the youth and employment generation. The budget should ideally encourage private investments across sectors so that companies and industries can enter a growth trajectory. Governance and accountability need to improve in public sector units and steps must be taken to attract the right talent for the long term viability of these institutions. The finance minister could look at increasing the capacity of Insolvency and Bankruptcy courts to speed up resolutions and reduce the current backlog.
Rahul Jain, Head, Private Wealth Advisory, Edelweiss
We hope that the Budget will address the current slowdown in the economy, at the same time care should be taken to ensure the fiscal deficit does not exceed 3.5 percent of GDP in 2018 19. While we have witnessed some economic slowdown in FY19, we can expect FY20 to certainly see a turnaround in economic growth rates, especially in the second half. A slippage in fiscal targets will cause hardening of bond yields, in the short term, however, they are likely to stabilise as inflation is manageable. It is our view that the double dose of liquidity and fiscal nudge could act as a much-needed shot in the arm for the economy and the possible exemption of LTCG could act as a pleasant surprise for the capital markets.
Ravindra Agrawal, Founder, Kisankraft
For the development of agriculture in India, we would like to see a reduction in GST rates to 5 percent for all agricultural machines. The current high rates of GST are counter-productive to the goal of mechanisation of Indian farmers. Prime Minister's goal of bringing corporates into the agri setup requires several structural changes in the law. Commercial farming must be allowed to be done by businesses to help bring model farming practices all over the country. Relaxation in restrictions to export agricultural produce will result in the improvement of net realization to the farmers. Relaxation on the regulatory restrictions facing R&D in agriculture is desperately needed along with an increase in investment in farmer training and education.
Indroneel Dutt, CFO, Cleartrip
We are optimistic and hopeful that the government will continue to be open-minded and maintain the impetus of its past initiatives while bringing necessary reformations to further enable the aviation sector. The Regional connectivity Scheme titled UDAN needs particular attention and allocation in this Budget. Increased digital penetration in the last few years has been one of the biggest contributors to the rise of the Indian travel industry. So, we expect the budget to sustain and accelerate India's digital journey.
Ajay Durrani, Managing Director, Covestro (India) Private Limited, a polymer company.
We expect the government to create a holistic focus on innovations revolving around the two important 'R's: Re-use and Responsible use and encourage industry to embrace circular concepts in their strategy focus on structured effort towards creating a robust waste management system for the country. Since it is impossible to phase out plastic overnight given its all-pervasive nature in daily life, it becomes very important to shift gears and focus on "Responsible usage" of plastic led by the government and a structured dialogue process is expected from the budget in this direction. We also look forward to the government's focus on ushering in an era of transformative multi-modal mobility paradigm. This coupled with a focus on better industry incentivisation for the implementation of the second phase of the FAME II scheme w hich will lead to a more sustainable environment for businesses and the eco-friendly initiatives.
Vineet Nayar, Founder Chairman, Sampark Foundation and former CEO of HCL Technologies
The upcoming Budget by Modi 2.0 government should see an increased education spending. However, we require a clear road map spelling out how and where to spend this money. There is an urgent need for a focused and sustained investment in improving learning outcomes, especially in schools in rural India. It is high time policymakers identified and addressed the real issues ailing the education system. And the real issue is our failure to break the mould and come up with creative and frugal solutions to improve the quality of both teaching and learning in classrooms, within the constraints of what we have on the ground. Besides, there is an acute shortage of qualified teachers in government schools as a result of which the states have had to recruit many under-qualified teachers. So, there is an urgent need to increase investment in teachers training programs to introduce them to modern teaching methodologies and materials to aid in improving instructional quality in classrooms.
Geetika Dayal, Executive Director, TiE Delhi-NCR
While there are many favourable policies currently in place, the government needs to make more revisions to existing start-up regulations to provide the entrepreneurial ecosystem with the support it needs to thrive and grow. To begin with, it needs to do away with outdated taxes that are eating into their profitability and curtailing their growth potential. Indian entrepreneurs do not need handouts, but they do need incentives and provisions that can help them realise their business goals and drive accelerated scale for their business ventures. We hope that the re-elected government will continue to build on the good work that it has been doing for the start-up industry with more conducive policies in the upcoming Budget.
Ashish P. Dhakan, MD & CEO, Prama Hikvision India Pvt. Ltd.
We are expecting a growth-oriented Budget with a clear roadmap for infrastructure development. The Indian security industry is ready to invest more in the manufacture of security systems. We expect the Budget to provide special support to facilitate 'Make in India' initiatives in the security industry. In order to bolster the 'Make in India' program, there should be a reduction in GST on job work from 18 percent to 12 percent. No doubt adequate there is ITC available, but it will help in efficient working capital management. A majority of security products fall under the category of 18 percent, whereby the need for security is slowly becoming a necessity. Hence, there is a need to consider major security products viz. CCTV cameras and DVR under 12 percent bracket in GST. Tax incentives are available in a notified zone for setting up a unit, which is absolutely clear, however, to promote 'Make in India' and increase the share of contribution in the industry a better ecosystem is a much-needed factor.
Hitesh Doshi, Chairman, All India Solar Industries Association
AISIA recommends raising export and manufacturing incentives and a level playing field for the local industry vis-a-vis the duty of neutral imported modules and components. The survival of the solar modules manufacturers industry is at stake. Subsidies for power, capital, interest, and depreciation to this industry and duty-free import of manufacturing equipment would help in making the industry competitive and attract investment in capacity creation. We recommend raising of export incentives from 2 percent to at least 10 percent for the modules manufacturing sector to create an export base for India in the spirit of the Make in India initiative. The recommendations come in the backdrop of the last fiscal year where major issues of imported modules and components, at 'dumping' prices, from China, Malaysia, Singapore and Taiwan, and by-passing of the safeguard duty tariff by re-routing through uncovered countries such as Thailand, Vietnam and Cambodia, had made the industry uncompetitive.
Rajan Sharma, Founder & Chief Executive Officer, Excess2Sell, a B2B e-commerce online marketplace
Although e-commerce in India is still in its growth stage and the market will evolve in its own unique way, the same holds true for the regulatory requirements as well. As one of India's leading e-commerce companies in the B2B domain, we hope that the Union Budget will address issues specific to e-tailing. Presently heavy online discounting, predatory pricing, preferential treatment to select sellers or monopolizing of the market is rampant and unchecked. This is creating an imbalance across the whole partner and fulfillment ecosystem affecting both online and offline B2B businesses.
Jayakumar Krishnaswamy, Managing Director, Nuvoco Vistas Corp Ltd
We believe the growth of the cement industry will be driven primarily by government-led spending on big infrastructure projects, affordable housing (Pradhan Mantri Awas Yojana) and an uptick in rural housing. We expect domestic cement demand to grow in the range of 8-10 percent this fiscal with an improvement in capacity utilisation. The key expectations from the industry are a rationalisation of the current 28 percent GST rate and introduce incentives to home builders through a reduction in home loan rates to increase the consumption of cement and kickstart the economy.
Devendra Rane, Founder & CTO, Coverfox.com, online insurance marketplace
The government should include more categories in SEZ, where the country needs to promote entrepreneurship. Key areas being micro fintech products which increase penetration to under-served India. Also, the Govt. should encourage usage of cutting edge technologies in AI and ML where China is taking huge steps forward. And it would be great if the government removes angel tax provisions and brings transparency into the process of angel funding. Also, regulatory sandbox should allow more number of startups to try innovative and non-conventional products by easing down the eligibility criteria.
Neetish Sarda, Founder, Smartworks, provider of managed workspaces
Amidst the growing demand for commercial real estate globally, co-working spaces have emerged as a new asset class in commercial realty enabling a greater fluidity of space in the market. For the corporate sector, while there has been capital inflow from investors, the ease on External Commercial Borrowings (ECB) would help foreign investors gain more confidence in the market which would result in a sustained and steady in-flow of capital from them. For co-working firms particularly like ours, we hope that the government will extend Input Tax Credit to the commercial segment, especially on work contracts and construction services which would help reduce our cash outflow. Likewise, keeping up a uniform corporate tax structure would be welcome. The government should also look at modifying or eliminating Angel Tax to enable more leasing of space to small and medium-sized enterprises as well as improving infrastructure in Tier 2 cities which are emerging co-working hubs.
Saurabh Srivastava, Chairman & Co-founder, Indian Angel Network
We are deeply appreciative of the hard work done by DPIIT/CBDT and bringing out the Angel tax notification in February, which has alleviated startups' problems to a large extent. Our expectation from the forthcoming Union Budget is further alleviation of regulatory friction impeding the growth of start-ups and angel investors. We hope that the Finance Ministry will take steps to align errant AOs who are still not falling in line with the spirit of the notification and harassing startups. We also hope that the Government addresses the issue of tax authorities misusing laws such as Section 133(6) of the Income Tax Act to harass investors in startups, raising the issue of valuation all over again. This brings to naught the sanctity of all the hard work done by DIPP and CBDT in the past months to exempt genuine startups from angel tax. Moreover, Section 56 should be eliminated completely to encourage Angel investment in MSMEs. While DPIIT has uplifted start-ups in its February notification, MSMEs in general( which do not meet the DPIIT definintion), have been left out. Further, we seek clear messaging and simplification of executive processes from the Government regarding other taxes in which start-ups are usually caught up.
Kamal Dutta, Managing Director-India, Skillsoft
We are now witnessing the fourth Industrial Revolution and with it the evolution of new age digital technologies such as Artificial Intelligence, Machine Learning and Cloud Computing. Shortage of these new age skillsets can be met by the govt. developing guidelines for various industries in order to create mandatory learning for employees especially in the IT, BFSI sectors. The government should provide some support in the form of incentivising companies investing in the reskilling, upskilling of their workforce for the digital age. With the shortage of skilled workforce in the deep tech sector, reskilling of employees in AI, ML, IoT will help grow India's IT sector and sharpen its competitive edge amidst the changing business landscape.
Ishan Gupta, Managing Director, Udacity India
The current government's Digital India initiative has played a pivotal role in empowering the country with digital assets. In the last few years, we have witnessed an exponential growth in the adoption of digital platforms for education, healthcare, banking and more. In the upcoming budget, I expect the Finance Minister to focus on providing equal opportunities to the readily available 500 million internet users while further expanding this base and the gamut of digital services to create a thriving knowledge economy. The Government should also focus on challenges like data security to ensure a sustainable digital transformation.
Sandeep Aggarwal, Founder and CEO, Droom.in
Our expectations from the Union Budget 2019-20 are pretty straightforward. With e-commerce being one of the most dynamic sectors in India at present, it has become imperative for the government to make the environment as conducive as possible for domestic players to survive and thrive in. The government should also make GST on e-commerce inapplicable for five years, along with facilitating R&D to drive innovations. Further, there should be a single-window approval for the incorporation and establishment of a company. The capital gain taxes need to be done away with. Lastly, an internet company based out of India should be able to list itself to any stock exchange, and not just the Indian one. By undertaking such initiatives, the government can ensure that the environment becomes highly favorable both for established as well as emerging players in the e-commerce industry across the country.
Sanjay Kaul, CEO, Sofyx, a social commerce platform
Small retailers are pivotal to India's economy given the population density of towns and cities. While the country is moving forward rapidly these retailers are being left behind. Govt needs to dedicate resources and implement programs to train and digitize these shops so that they can compete in Digital India. Millions of households derive their income from these shops and yet they are struggling to keep up with the changing environment. Since technology usage is key for retail businesses today, we hope that this Budget brings new initiatives aimed at driving digital adoption and to push forward new reforms as part of 'Digital India 2.0'.
Juergen Hase, CEO, Unlimit, IoT service provider
The re-election of the Narendra Modi Government ensures steadiness of the government's gripping vision for India to boost the economy and put the country in the forefront of the technology sector by 2030. We expect the government to announce a Budget that will encourage the entrepreneurial energy in the economy leading to more jobs and development. Most startups have a variable source of income and need support from various government sources and investors to grow and become successful. They won't have the bandwidth to manage multiple GST registrations. We're hoping the forthcoming Union Budget will boost the start-up eco-system by abolishing the angel tax and introducing a single GST registration.
Punit Shah, Partner, Dhruva Advisors LLP
Banks in India have played an important role in assisting the development in the country. Thus, in the current challenging times, it becomes imperative to provide the required fiscal support to the banking industry. One such measure could be with respect to tax deduction available for NPA Provisions. Currently, the banks are allowed a deduction for provision of NPAs only to a limited extent. In case of most of the banks, the amount of NPA provision made in accordance with RBI directions far exceeds the deduction presently available under the Income-tax Act,1961, which results in disallowance of a substantial portion of the provision made for NPA.
Nidhi Yadav, Creative Head & Founder, AKS Clothings
The performance of Indian textile and apparel industry is linked to the performance of many small and medium-size businesses which are vendors to big companies. They come in the unorganised sector, and lack of funding for smooth functioning is often a challenge to these labour-intensive companies. In the Interim Budget, the Government has taken many right decisions to help these small businesses. The industry is very optimistic that a single authority for sanctioning and processing GST refunds, which is expected to get implemented soon will help eradicate current complexities in the system and benefit all the small and mid-sized companies in the industry. We hope more of such pro-industry measures that may further help small businesses in overcoming their challenges.
Hemant Jalan, Managing Director, Indigo Paints
With our new Finance Minister Nirmala Sitharaman, we expect the Budget should concentrate on curtailing the tax burden of the low-income group. It will lead to a higher consumption rate, widening the horizon to the paint sector. Currently, one of the biggest challenges is to keep the grip in the rural sector which is a growth driver of our industry. We hope that the government offers policies that suppress the rural poverty issue. Also, we are hopeful that the government takes powerful initiatives to revive the real estate & housing sector. Being closely associated to the sector, the business of the paint industry will prosper which will further provide impetus to the economy. It is essential that this budget favors the manufacturing sector. The budget should be futuristic and focus on implementing concrete measures to boost consumer sentiment.