Expectations from Budget 2022 – Fintech, Edtech, Healthcare and more

Budget Expectations 22

With much hype and buzz surrounding the upcoming budget for FY 22-23 in around the media and digital spaces, many industry leaders have shared their valuable insights into the budget being crucial in strengthening the economy of India. Pertaining to a few industries, they have unravelled their belief and relative measures to see the complexity coming off. It is important to note that most of the referred expectations have sparkled around GST and Taxation for Startups.

Fintech

Nikhil Kamath, Co-founder, True Beacon and Zerodha

While companies reach out to the government requesting a change to existing regulations, allowing unlisted Indian companies to list abroad, I believe it is the right time to work in-house. The entry barriers for companies to get listed are high in India; however, once listed, the penalty for violations is minimal, making investors, especially retail, susceptible to a lot more risk. We should be looking at it the other way around to foster innovation while keeping a check on corporate governance. There is a strong case for easing the listing norms in India while tightening penalties for violation of laws.

The economy can also benefit from tax reforms around STT and LTCG. The investment industry will benefit if the Securities Transaction Tax (STT) is abolished, as both long-term capital gains (LTCG) and short-term capital gains (STCG) are in place. Nonetheless, if the government does not intervene with STT, it could look at removing the tax on long-term capital gains. Finally, bringing taxation of Category-III AIFs in line with Category-I and Category-II AIFs will be a shot in the arm for the budding hedge fund industry.

On a separate note, the Cryptocurrency Bill will be interesting to follow to understand permitted use cases and the manner of taxation. Unfortunately, it looks like we will have to wait for the post-budget for the government’s final stance.

Manish Lunia, co-founder, Flexiloans

Smaller businesses have suffered due to the pandemic, and the fear of Omicron doesn’t look to be subsiding soon. The government should focus on expanding digital footprints for enabling quicker access to financial services.

Enabling systemic financial institutions like FinTech NBFCs to support the small businesses via cheaper funding schemes, the extension of Credit Guarantee Fund Trust for Micro and Small Enterprises cover, and attractive priority sector lending guidelines will help. For the Fintech ecosystem, dedicated Fintech Hub should enhance the visibility and growth of the sector.

Amit Nigam, COO & Executive Director, BANKIT

Nowadays, people are looking for more convenient banking services. As intriguing as it is, startups and the FinTech industry is quite handy to the public. Those who have comprehended the accelerated needs of not only the unbanked population but also of the underbanked population hold the brightest of future in the FinTech industry. The expected outcome of the efforts of FinTech industries is to make people rely on uncomplicated, safe, and one-stop-solution services. The finTech industry is based on technology and innovation. With a huge investment in IT infrastructure and manpower, we are expecting tax relaxations on these investments.

Hospitality

Rachel Goenka, Founder and CEO, The Chocolate Spoon Company

For Budget 2022, the government needs to take cognizance of the outsized economic toll of COVID on the hospitality industry. The first two waves have already caused over 30% of restaurants to shut down permanently and over 2.5 million people directly employed in hospitality have lost their jobs. If the government wants to attract investment to revive the industry, significant issues need to be resolved such as input tax on GST, industry status for the hospitality sector, and single window license clearances for ease of doing business rather than adding to the cost of doing business. Tax rationalization, liquidity support, moratoriums, incentives, and reliefs would be critical for the long-term health of the industry. We would welcome amendments to the Income Tax Act to allow business losses to be carried forward for 10 to12 years as well as permitting write-downs of capital or operational losses. Lastly, license renewal timelines should be extended from annually to at least 3-5 years. 

Miten Shah, Co-Founder, The Studs Sports Bar & Grill.

2020 and 2021 showed the whole world how each wave of Covid affected the Hospitality, Restaurant and F&B industries. Multiple Operating Hour restrictions, Capacity Restrictions, Lack of Landlord support, Swiggy and Zomato deliveries also coming under the GST ambit have all made it worse for the Industry which contributes over 10% of the overall employment of the nation’s young working class. The Restaurant industry has been ailing since the onset of covid and had just started to barely recover before the 3rd wave hit againThis industry needs the maximum of Government support to come to its feet again. This could be started in the form of firstly the GST Input Credit being reinstated on the Capex, Rentals and many other spends on which restaurants pay 18% GST but do not get the setoff against the taxes collected from the customers. This 18% tax thus directly hits the profits of the restaurants and significantly affects the bottom line.

Anil Gupta, Managing Director, KAPL

The budget of FY22 should prioritise investment in infrastructure and provide incentives for investment in solar energy to promote sustainable use of resources. Encourage innovation and promote make in India considering standardised operating procedures for investments in R&D and New Product Development. Aim for ease of compliance and formalisation over GST and Taxation. Prioritise extended credit facilities to MSMEs to provide stimulus to the chemical industry. Provide subsidies for capacity expansion and promote employment. We expect the budget of FY22 to aid easy access to better infrastructure that will allow us to increase the number of exports and import substitution to further develop the chemical industry.

Healthcare

Nupur Khandelwal, Co-Founder Navia Life Care

COVID has undoubtedly highlighted the significance of a robust healthcare system in the country and has shown the world that you are only as strong as your healthcare systems. The Centre’s Budgetary allocation to the healthcare sector should be increased to at least 2.5% of the GDP to bridge several gaps that currently exist in the system. Further, tech driven-innovative healthcare solutions have played a pivotal role in fighting mankind’s biggest health crisis and healthcare providers have embraced these solutions to solve for accessibility. This year’s budget should focus on encouraging these solutions by way of tax benefits/ tax holidays and even establishing a healthcare innovation fund.

Ameera Shah, Promoter and Managing Director, Metropolis Healthcare

While we still battle the mutations to the COVID-19, I believe that the upcoming budget might comprehensively cater to the healthcare sector. R&D in India and around the world has been developing solutions to address the existing issues and has been preparing for the anticipated ones. The technological intervention has increased the digital and home-based healthcare ecosystem ensuring a reliable healthcare solution for the nation. However, training and medical infrastructure need to be nurtured. The Centre’s current expenditure on healthcare is estimated at 1.2% of the GDP(as per National Health Accounts, 2016-17) and is envisioned to touch 2.5% by 2025. And I believe that strong investments in healthcare can help buoy the nation’s economy.

Runam Mehta, CEO, HealthCube

The Indian health-tech sector proved its potential to the fullest in 2021 and played a major role in containing the pandemic. We hope the government will make sufficient budgetary allocations towards the development of new tools and technology and manufacturing of cutting-edge portable diagnostic, remote monitoring and telemedicine equipment. There is also a need for government-private collaboration in the development and usage of advanced software-based solutions in rural healthcare delivery and preventive diagnostic services. Investments should better be simplified and the Reduction of import duty on critical components required by the device manufacturers is another urgent area of attention. 

Krishnan Ramachandran, CEO, and MD, Niva Bupa

As the country reels through the ongoing threat of the Covid pandemic, securing the health of oneself and our loved ones is of utmost importance today. The Government could consider doubling up of medical insurance limit under Section 80D to INR 50,000 in light of higher medical expenses post-Covid. One of the major challenges for low penetration of health insurance is the affordability factor. The 18% GST which is currently levied on health insurance products increases the premium amount which acts as a hindrance for many prospective policy buyers. Reduction of the GST amount for health insurance plans will make the products affordable for the masses and lead to higher penetration across consumer segments.

Hitesh Windlass, Managing Director, Windlas Biotech

The Indian pharma industry needs a competitive advantage to move up in the value chain and become a global leader in pharmaceuticals. This requires a push from the Govt. to encourage indigenous manufacturers to do more R&D, especially in the areas of unmet need, and be able to invest in capacity building.

Higher tax deductions for R&D expenses will encourage even more investment in the development of new pharmaceuticals. Innovative drug investments carry a higher risk of failure, resulting in risk aversion – if the government provides greater tax advantages for R&D spending, Indian companies will be encouraged to spend more. In addition, a skilled talent pool will help pursue these innovations which can be attained if education programs like ‘Skill India’ are scaled up for pharma.

Anil Khandelwal, Founder, Yogic Secrets

Ayurveda is a 5000 years old medicine system and offers extensive therapies and remedies for the young, old, sick, healthy, and everyone in between. 

It is suggested to consider lowering the GST rate from 18% to 5% on nutraceutical products. This will help not only make the end price affordable to consumers but also help promote our ancient wisdom, practices running for thousands of years and more importantly with zero side effects.

Education

Siddharth Chaturvedi, Director, AISECT Group

For Higher Education, the government should allocate funds to promote research, the establishment of the National Research Foundation that can fund research in both Govt and Private Institutions, with investment in the Faculty Development and National Mentoring Programme as envisaged under the NEP. Creation of dedicated funds for Ed-tech startups/ initiatives that are trying to build content and programmes for Indian learners from tier-2 and Tier-3 markets; Increased collaboration for the NEAT platform and activate the National Education Technology Fund planned under NEP. There should also be increased investment in the internationalization of higher education and attracting more students to “Study in India”.

In this budget, the government should Rework GST from 18% to 5% on skilling programmes and pay special attention to Skills and Vocational Training. They should strengthen the Skill Hub Scheme further and allocate funds for greater outreach and coverage of students under skill training as per NEP provisions.

Rohit Manglik, CEO, EduGorilla

Amid accelerating digitisation in education, the Union Budget should also prioritise strengthening IT infrastructure ahead of the 5G rollout. Edtech startups are playing an instrumental role in sustaining learning amid the pandemic. Hence, access to funding and networking avenues for edtech startups will further propel the sector. Moreover, slashing the GST rate in online education services and strengthening data protection will help reap the benefits of e-learning. 

Dr. Ajeenkya DY Patil, Chairman of the DY Patil Group.

I believe education is the foundation of a successful society and the exponential rate at which technology has enabled edtech solutions and their adoption over the last 18-24 months, has been pleasing to see. There is a realisation that we need to enable our youth to ready themselves for the future and embrace the new flexible ways of learning and development to ensure they enter the workforce with the best possible preparation, not just from a knowledge perspective, but also with the right skill sets. With Edtech we should now take the education to the students, wherever they are.

Dhiraj Ahuja, Founder & CEO, Skillskonnect

  1. New education policy focusing on skill development needs to be given the highest attention to help 70% of the students who do not score well and struggle to find a job.
  2. The outlay on education and skill development need to apportion a significant amount in creating awareness and delivery of skill training at schools and after school to provide a real chance for youth to become job-ready.
  3. Technology Startups engaged in providing digital solutions to the training ecosystem to skill more and provide jobs to youth should be given more incentives by the government in terms of funding, government collaboration through PPP and tax breaks to push youth into employment and help them earn a livelihood.
  4. Government should relax its RPF norms to welcome new age tech startups to take on government projects to enable skilling and jobs for the youth. Traditionally such government projects have been inviting only older companies with high revenues to quote and this leaves a lot of promising startups and passionate entrepreneurs from contributing toward the public good.

Himanshu Periwal, Co-founder, unlu

With regards to the edtech and creator tech segments, which are allowing innovation in learning during these distressing times of pandemic! With regards to learning amongst college students and young professionals, we expect the government to 1) encourage universities to integrate new-age skills in their curriculum and 2) allow startups to become part of the Skill Development governing bodies, such as NSDC (national skill development corporation), MSDE (Ministry of Skill Development and Entrepreneurship), etc. We expect the government to support the same with lowered GST and a higher FDI allowance, which can further help boost its growth.”

Kunal Sharma, Founder & CEO, Flipspaces

The real estate industry is the second highest employment generator in the country and hence the sector expects the government to award the long due industry status which will allow raising cheaper credit from financial institutions. The government should also consider a reduction in GST and loan rates along with deduction in TDS rates to provide relief to the reviving sector post the global pandemic. There must be measures and initiatives undertaken to make the sector more technologically advanced thus strengthening the infrastructural backbone of the nation.

Sanil Sachar, Co-founder, Huddle

Despite the pandemic-induced challenges, the country has been witnessing entrepreneurs and startups thriving due to early-stage acceleration and venture capital, as well as a push from the Indian government through acceleration programmes via ‘Make in India’, digitisation, etc. While this is a positive sign, the need of the hour through policy is to create a more robust startup ecosystem in the country is to reduce the disparity in capital gains taxes between investments in listed and unlisted companies, so more investors are incentivised to bet on early-stage startups. Through Budget 2022, the government should also consider easing angel tax restrictions so more startups and the overall ecosystem can benefit significantly. We strongly believe that simpler loan disbursements, e-approvals and incentives to startups for adopting digital finance will help propel Indian startups, as well as the overall economy.

Anil Nagar, Founder and CEO, Adda247

The companies in the startup ecosystem will play a significant role in transforming the country’s image. The EdTech industry has flourished at an accelerated rate as it broke new territory and entered tier 3 and 4 cities of the country. It will play a major role in educating our workforce for a better tomorrow. This is possible only if we make online education affordable to all. The Government should support this through a lower GST while focusing on creating a strong digital infrastructure to improve the quality & experience of online education for students in cities as well as remote areas. The government should also forge alliances with Edtech companies to accelerate the learning outcomes with the help of cutting-edge technologies in the education ecosystem.

Kapil Makhija, CEO, Unicommerce

Amidst the pandemic, e-commerce has become an integral part of India’s retail industry. India has the world’s fastest-growing e-commerce and SaaS markets. Both sectors have garnered attention from investors and companies across the globe. We are e-commerce focused SaaS solution company and we expect that the upcoming budget should focus on increasing digitization in Tier-II+ cities of India. The young aspirational Indian’s from these regions have started adopting e-commerce extensively and if the government continues to focus on the infrastructure there is immense growth potential. Also, we expect that the government will further provide clarity on the tax obligations of e-commerce companies and brands as it will help them further streamline their operations. We also believe that logistics infrastructure will play a pivotal role and any reform in improving India’s supply chain infrastructure will help in further driving the growth of India’s e-commerce industry.

Saahil Goel, CEO & Co-founder, Shiprocket

We have a lot of expectations of support to the start-up ecosystems which can really boost the economy. There should be a single window for all the relevant registrations like company incorporation, shop establishment, GST registration, MSME certificate etc. which will help save time, effort, and money considerably. For start-ups, ESOP’s are key to attract & incentivize talent, these should not be taxed on vesting as recipients do not have ready cash in their hands at that point, the taxation should be on the final sale of shares. Further, there is a deduction of TDS by the e-commerce operators on the sale of goods, which leads to blockage of capital.

Dhaval Udani, CEO & Founder, DanaMojo

Our tax system should encourage citizens to think about others by incorporating some reforms to boost charitable donations across India. I would encourage the government to offer a 100% tax exemption to citizens for donations and a 150% tax exemption to NGOs listed on the to be formed Social Stock exchange as a reward for their greater efficiency and efficacy. It would also be very helpful if the government allowed corporates to accept charitable donations receipts for tax saving purposes like investments using the IT Dept generated Form 10BE. This will lead to increased awareness of charitable donations being a tax-deductible instrument and is the most secure form given that it’s a receipt issued by the IT dept.

Amit Gupta, CEO and Co-founder, Yulu

Solutions like shared EV mobility make a lot of sense for a populous nation like ours because it gives an easy entry point into EV adoption while optimizing the use of vehicles added on the road. Recognising Shared EV mobility as a priority industry will improve affordable access to capital & help bring scalable solutions. Also, given the capital-intensive nature of shared mobility business, monetization of GST locked into the Balance sheet will help link tax payments to revenue cash flows. Lastly, provisions for building enabling city infrastructure like special lanes for non-motorised vehicles (NMTs) will ensure user safety & give a fillip to EV adoption.

Amit Patel, Founder & MD, PitchRight Ventures Global Opportunities Fund 

The government should help in assisting startups through policies and support mechanisms towards domestic capital participation. Along with providing incentives to set up incubators, tax exemptions in FDIs and relaxing taxes for startups. The reduction of GST in certain sectors and reducing the number of slabs in GST would not only increase the tax compliance but also provide the necessary relief that would boost consumer sentiments and keep the demand higher. The government should reduce the GST rate from 18 per cent currently to 5 per on start-ups across industries.

Roland Landers, CEO, All India Gaming Federation

The online gaming industry is growing at an impressive CAGR of 25% – 30% and holds significant potential for overall economic growth, job creation and contribution to the government’s vision of a trillion-dollar digital economy by 2025. To enable the industry in realising its peak growth potential, it is imperative that the GST regime for the online gaming industry is kept rational and at par with other technology platforms and services. It is important to highlight that regressive taxation of these emerging sectors may only make the business unsustainable in India. The tax authorities should align their policies with internationally accepted principles of taxing the online gaming sector and provide certainty to the industry.

Varun Mohan, CEO, Definite

The pandemic has hit all the business sectors across the country including the real estate sector with the third wave ongoing recovery may once again take a setback. Investors are expecting relief from the government’s end. The expectations are reductions in GST and an increase in home loan interest, the deduction for a tax rebate, and a rise in FDI inflow. The government must focus on the real estate sector; it is globally the most recognized sector and generates the second-highest employment in the country. Retail, hospitality, and commercial real estate are growing significantly, delivering the much-needed infrastructure for India’s growing need for relaxation in taxation would be helpful in the development of the sector, and reduction in GST rates can give a lot of relief to the fraternity. Also, steps must be taken to make the industry more technologically smart the ongoing pandemic has made us all realize how important technological aspects are for any business to run successfully.”

Vikram Singh, CEO & Founder, TechEagle

A dedicated budget for Drones in the Healthcare Sector by the Government of India in the 2022 budget is required to improve the sector and save lives. Drone delivery and air taxis require infrastructure policy in the urban landscape. Also, import duty exemptions or reductions shall be imposed on certain electrical and raw materials used in drone manufacturing. This might be done for a set number of years, with decisions being reviewed each year. As a result, corresponding items can be pushed to begin manufacturing during this time, creating an eco-system for India’s Drone Manufacturing Hub. The central government should encourage increased use of drone technology in various departments, such as infrastructure, defence, healthcare, maritime, and railways. As a result, based on the Central Government’s experience, states will adopt the use of drones more quickly and Drones developed in India should be prioritized.

Ankit Kedia, Founder and Lead Investor, Capital A

Private sector investors rallied behind the Indian startups in 2021, and the momentum augurs well for the plans to become a $5 trillion economy. However, the government needs to play a much bigger role in supporting investments from foreign countries. One of the major obstacles today is the lack of ease-of-doing business. India is still not in the top 50 countries of the world on the global list. Our aspiration to be one of the top 3 economies has to be complemented by being one of the best business destinations in the world. We expect the government to take steps to boost technology-driven startups and simplify the FDI processes across the sectors.

Varun Goenka, CEO and Co-Founder, Chargeup

Sustainable transportation needs have seen a lot of developments in the EV sector in India. However, the pace of growth is not adequate and it is expected that the government will declare the EV industry to be a priority sector in the Union Budget. Food delivery companies such as Zomato are moving towards a 100% EV fleet for their operations, and some of the cities such as Gurgaon have declared EV only zones. We expect the government to take policy measures to build more EV zones that will drive the adoption of such vehicles.

Abhishek Goenka, Head and CIO, RPSG Capital Ventures

We have had a fantastic 2021 from the startup ecosystem perspective, and with further Government support, this growth could reach new heights. This could include simplification of GST rules with respect to availing of credits and monthly procedural requirements. Also, an offset of capital gains by investing in other startups could help boost investments and contribute to the growth of the overall startup ecosystem.

Abhijit Shanbhag, President and CEO, Graymatics

The Government of India must focus on the technology-driven transformation of the country in the years ahead, and the union budget is a great starting point. We are now moving into an era where touchless technologies, remote monitoring and surveillance have become necessary in various use cases. In this regard, companies that focus on developing smart technology-driven solutions need to be backed by the authorities. Supporting research and software development, and manufacturing of technology-driven products through funding and infrastructure is a key need today. We hope that through higher budgetary allocation for smart city projects and supporting innovative tech such as video AI, the government will move forward to the goal of digital India.

Tanul Mishra, CEO, Afthonia Lab

For me, the fintech industry has only touched the tip of the infrastructure transformation iceberg. In the years to come, we are likely to see that transformation journey evolve and go deeper into the tier 2/3/4 cities and semi-urban and rural spaces to create true impact. This is only possible with the continued support extended by the government, in terms of reforms, flexible regulatory environments, and budgetary allocations towards state and regional sandboxes that help create structural and foundational changes to India’s complex financial services industry. According to a report by CLSA, it is said that the value of digital payments in India will grow 3x to touch $1 trillion by the financial year 2026 compared to $300 billion in the financial year 2021, and for that to happen, better infrastructure and connectivity along with the support to propel the industry “forward is the need of the hour”.

Suvendy Prusty, CoFounder and Director, Riskcovry

The global insurance penetration rate is 7.1%, whereas in India it stands at 4.2%, much less than the global median. On the other hand, the general insurance (non-life segment) penetration in India stands at a meagre of 1%. So, let’s make health and home insurance mandatory for families with a household income of more than INR 10 lakhs per annum. Another recommendation is to exclude or reduce the GST (which is currently 18%) on health and home insurance premiums. Additionally, we can provide an extension in the deduction for the premium paid for home insurance under section 80C under the income tax regulation. Lastly, providing an extension in the deduction for premium paid for home insurance will reduce the financial burden on citizens as well as on the Government.

Bhavin Pandya, Co-founder & Co-CEO, Games24x7

Gaming has the potential to transform the way new India is learning. Gamification is increasingly used to improve education, training, and skill development. Established players in the online gaming sphere have the wherewithal to support a variety of professions from budding entrepreneurs to established technologists and data scientists which will further accelerate growth and make India an exporter of gaming content and IPs.

The sector eagerly awaits progressive policy structure from the government as well as fair treatment from the GST council. With proper support, the online gaming sector can give a big impetus to the government’s drive to create a $1 trillion digital economy.

Ankur Singh, CEO & Founder, Witzeal

The Indian gaming industry is one of the fastest-growing industries in India from a new age technology perspective currently. As per the report launched by the EY- AIGF in 2021, online gamers are estimated to grow from 360 million in 2020 to 510 million by 2022. Now we are expecting that, in realizing its full potential for growth in upcoming years, the government’s focus on this sunrise sector will further help in keeping with the government’s objectives.

Taking inspiration from this growth in the upcoming budget we expect foresighted policies which would intensively nurture the new age technologies including gaming technologies that are sustainable for the future growth of the economy of the country and to attract international investors to invest in the Indian market in the upcoming years. It will also help in expanding businesses in other countries as well as the generation of increased revenue to the exchequer of India.

Maithili Appalwar, CEO, Avana

The agriculture sector continues to remain the pillar of the Indian economy, and with the increased adoption of digitization in the post-pandemic world, we expect to see a push from the government towards unique agri-tech initiatives. To give a boost to these new-age businesses, we hope to see more incentivization for creating start-ups that are not venture-backed, in the form of better borrowing rates, government start-up promotion schemes, etc. We also want the government to focus on agri-supply chain creation including cold storage, smoother transport networks, etc.

Furthermore, active strides need to be taken by the government to support sustainability in the environmental and agricultural domain, and we expect water conservation/Jal related subsidies, and a budget for infrastructure creation to promote the same. Additionally, in order to support the fabric of the rural economy which is the backbone of the country’s agricultural sector and to safeguard countless lives, we hope to see an increase in rural healthcare spending over the next year.

Rahul Veerwal, Founder & CEO, GetWork.

We expect that the ministry will finally give relief in goods & service taxes by reducing the slab rates for Startups as well as the no. of filings per year. It takes a huge cost of operations for upcoming startups to keep a finance team or outsource the work for monthly taxation filings. I think Union Budget would announce some relief in either the No of taxes to be filed, frequency of filing or the tax slabs for eligible startups under the Startup India Scheme.

Mahesh Viswanathan, Chief Financial Officer, Finolex Cables

This year’s budget is going to be critical from an economic stabilization and growth point of view. The governments continued investment in asset creation and boost infrastructural development will be a key focus point in this testing and uncertain time. The country’s MSME sector has been on a growth trajectory and efforts should be made to ensure this sector is protected due to its long term potential. Reliefs on income/personal income tax, provision of affordable housing and consideration for the real estate sector along with accommodative banking regulations will play a major role to get back on track with the progressive Indian economy goal.

Mr.Ankit Mehra, Founder & CEO, Gyandhan

The New Education Policy 2020 had set quite lofty goals for higher education in India. The pain point is that for its successful implementation, the upcoming Union Budget needs to re-prioritize the budgetary resources, particularly, the challenge of doubling the current Gross Enrollment Ration (GER) needs allocation of increased funds to create a digital infrastructure for higher education. We expect the budget will allocate the required funds to further remove the disparity between students who can and cannot access affordable financing options. There are several banks and private lenders providing education loans, but students tend to hesitate as the end cost of the loan is unfeasible. Budget can help improve market conditions. To incentivize lenders to book more loans, the INR 20 lakh cap on the priority sector lending should be eased because not only overseas courses, even domestic courses are not covered within this limit. Further to incentivize borrowers, the benefit of Section 80E of the Income Tax Act of India should be extended to NBFCs as well, which currently only covers banks with 1 NBFC in tow.

Nishant Behl, Founder of Expand My Business.

To increase demand, the b2b services procurement and fulfillment companies like Expand My Business are seeking a reduction in 18% GST to 5%. This move will empower the sector by lowering operational costs and increasing exports with other forward & backward linkage industries to achieve growth while achieving higher export targets, consequently pushing the economy towards the targeted $1 trillion worth of exports, as set by the Government. The B2B e-commerce market is also anticipated to expand at a CAGR of 18.7% from 2021 to 2028.”

Budget 2022 should provide incentives for the MSME sector for better integration of digital payment methods. By expanding the client base and boosting cash flow via faster money realization; giving upsell chances; lowering costs and establishing a digital footprint that allows for easier access to loans at lower rates, The digital payment ecosystem can further flourish.” 


Naveen Mypala, Founder of URBAN Living

Personal tax relief, whether in the form of lower rates or altered tax slabs, is the need of the hour, given the previous rise in the Section 80C deduction limit (to Rs 1.5 lakh per year) occurred in 2014. Furthermore, the amount of investible surplus in people’s hands has been decreasing. The government could encourage home buyers by increasing the tax deduction on home loan interest to Rs 5 lakh, up from Rs 2 lakh, in order to boost demand. Income tax slab adjustments will provide a financial buffer to the middle class when purchasing a home in this regard. For long-term real estate expansion, a demand-pull must be developed in this direction.” 

Aquibur Rahman, CEO, Mailmoda


The startup ecosystem has played a pivotal role in generating employment and strengthening global outreach in the past few years. So, to support this growth, our economy needs policies and infrastructure that regularizes remote work, decision-makers who evaluate guidelines from our perspective, and investment in R&D as well as upskilling programs of semi-urban and rural youth.

Abhinav Mital, Founder of The WorldGrad

GST reductions will be highly appreciated by the students and the education sector; the cost of upskilling makes premier opportunities inaccessible for the students in addition to the mental stress and financial burden it puts on them. Though core education for degrees and diplomas is GST-free; however, allied services or education empowerment in the form of certificates, online learning courses, and other such opportunities are not.”

The government should provide significant & sizable assistance to students by lowering the 18% GST on education services and associated categories, decreasing their direct financial strain by 10-15%, and encouraging more individuals to upskill themselves to better prepare for successful careers and growth of the nation. 

Moreover, education facilitation should be viewed as a significant contribution to overall educational achievement.”

Rajat Jaiswal, Co-founder, Wat-a-Burger

Expectations with the Budget:

1) support in the form of waived or reduced license and permit fees for a year

2) Guidelines to banks to not consider the industry as a stressed sector for grants of loans. In fact, special fund allocation for granting as loans on special interest rates

3) a major expectation is to allow gst input to restaurants. The gst paid on hefty rentals of premium locations is a major financial setback to all restaurants. Not to mention 18% and above paid on most equipments and raw materials.

Tarun Arora, Director, IG International Pvt Ltd

1. Solar Subsidy on Cold Chain
2. Center of excellence for crop diversification on horticulture crops
3. Emphasis on Cold Chain infrastructure
4. GST Exemption on Rooftop Installation for Cold Chain

Shashank Pandey, Co-founder, ConveGenius – a social edtech startupBuilding a solid digital education ecosystem that enables skilling is a sure-fire way to combat the current pandemic. The NEP-2020 initiated significant changes in the Education System of our country – it created a niche for EdTech, permitted flexibility in the learning curve, and emphasised blended learning. With the government’s numerous laudable steps to build an e-learning ecosystem, India still requires a lot to educate its youth, and the upcoming union budget may open doors to the facilitators working diligently to bring educational equity to this #NayaBharat. I hope the upcoming Union Budget would support the perfect blending of digital & traditional education and strive to encourage the adoption of emerging technologies. Moreover, the government should make more efforts to engage in Artificial Intelligence, Machine Learning, and Data Science training sessions at the grassroots level and build up capacities and acumen for new-age tech domains in educational institutions.
Another important aspect to be considered is improved internet connectivity infrastructure across the nation that promotes last-mile access, affordable 5G devices, and most importantly helps EdTech companies with strong data protection laws.


Madhu Agrawal, Co-founder of Clever Harvey – a career exploration and acceleration startup“The last two years of the pandemic have been full of ups and downs for many industries worldwide and needless to say, the education industry isn’t spared either. While Edtech has seen a significant boom, there are factors that still need to be reconsidered by the Government of India in the upcoming Union Budget that can help boost the edtech industry which is the future of education.

According to us, one of the key areas of concern for all edtech companies is the disparity in the GST treatment of print educational solutions vs digital educational solutions. For example, a textbook is charged 5% GST whereas the same book in an online format is charged 18% GST. We’ve seen the potential of online educational material increasing access to education and the quality of education. We are expecting this GST should be reduced so that more people can invest in digital education. We hope that the Government of India reconsiders this in the upcoming budget announcement and builds a fair and equivalent system for offline as well as online education providers.
Sakshi Vij, Founder, Myles Cars – a Car rental & Car subscription platformHonorable Finance Minister Smt. Nirmala Sitharaman should look at aggravating the domestic demand by further incentivizing individual and commercial consumption of EV, pan India. The global pandemic has shown that the world wants an alternative for China in the processed goods industry. India must cash in on this opportunity by creating an EV-manufacturing hub. In Budget 2022, we expect the government to boost EV financing and introduce viable options for customers to use them. More EVs should be available in India through preferential taxation for imports. Moreover, there is a need for a simpler access window for startups that can easily solve sustainability and climate change goals with government and policy-making bodies.

Uttam Kumar, Co-Founder & COO, HungerBox – India’s First Institutional Foodtech Company.The pandemic’s impact has reverberated across domains impacting the overall economy, businesses across industries, and the startup sector. F&B has been particularly hard-hit, and the government has attempted to bring growth back.  

1. Double taxation was a significant challenge for small food vendors, and the authorities have aimed to address this problem with the recent GST announcement. GST collections are likely to increase following this move. We believe this can be a game-changer for the sector.
2. The government has undertaken a staged reduction of corporate tax. The government should accelerate this game plan.
3. We would like the government to simplify MSME loan disbursements. Currently, asset-intensive MSMEs tend to receive loans more quickly, while those in the service sector find the process challenging.
In addition, to keep NPAs to a minimum, banks prefer MSMEs that are already profitable. This approach may be detrimental to spurring entrepreneurship. Banks should identify new loan criteria such as billings of the last three months and the ticket size of customer transactions. They should also not restrict loans to collateral value only.

We are hopeful the upcoming union budget will address these policy changes to support the F&B sector.


Ujjwal Singh, CEO and President, Infinity Learn
To address the rising demand for digital learning, the EdTech industry has embraced new technology and resources. EdTech companies in India are creating effective solutions and serving as vehicles for socioeconomic development and transformation through innovation and scalable technology. The use of technology in education, or digitalization, has aided the spread of quality education throughout the country, particularly in Tier 2 and Tier 3 cities. EdTech companies have helped to democratize access to high-quality education and improve student engagement by using technology technologies. For its expansion, the industry is looking for government help. Ramping up of digital infrastructure is the top demand of the edtech sector. Because of infrastructure issues, cities in Tier 3 and Tier 4 struggled with online education.

We also expect the government to recognize Edtech as an industry group, allowing it to engage in decentralizing learning at all levels and reconsidering the taxation of ESOPs. For a fair and equal system for offline and online education providers, the government should cut GST on online learning and materials. Infinity Learn by Sri Chaitanya believes in harnessing educational technologies to meet the country’s ever-increasing demand for both online and offline, as well as collaborating with the government to reduce learning loss and develop a New India.

Nitin Misra, Co-founder, indiagold

“With the government making progress on several fronts, we anticipate a policy framework in the budget that allows FinTechs to work closely with relevant government institutions to improve the distribution and adoption of existing gold monetization schemes, as well as launch new products like the gold savings account. All compliances, including incorporation, GST, other taxes, EPFO, and other registrations, should be handled through a single window in India.

To stimulate entrepreneurship in India, the government should also allow entrepreneurs to carry forward their loss of income to offset against future income. Furthermore, reduced capital gains on mergers and acquisitions will help the sector grow.”

Niraj Singh, Founder & CEO, Spinny

The pandemic has radically changed consumers’ mobility preferences. With more and more people being reluctant to use public transport, personal mobility has naturally become the best and safest choice now. Owning a car of your own is not a lifestyle preference but more of a necessity for every household.  Uncertain economic conditions make used cars a better value proposition and with online used car platforms making search, discovery and purchase of second-hand cars more seamless and trustworthy than ever with use of technology and focus on customer satisfaction. 

To further support this, the Government should introduce more incentives to buyers and sellers to boost the penetration of this segment by incorporating tech advancements and modern solutions with contactless home deliveries, thereby ensuring safety and convenience to customers at every point possible. A uniform GST rate of 5% on the margin for all used vehicles could be a great move and make this segment organized. This will eventually ramp up the demand for second-hand cars by pulling in more customers. Likewise, the government should also look at empowering the EV sector by making electric vehicles more affordable to the common masses and strengthening the existing charging infrastructure to boost customer confidence. Owing to the rapid increase in vehicular pollution, pushing for a shift to EVs would be the step in the right direction. And for this, the government should evaluate less taxes on EVs and vehicles in general, and consider expanding the possibility of tax deductions on EV loans as well as on other vehicles, too.

Ms. Pallavi Shrivastava, Co-founder & Director, Progcap

Enabling Fintechs: The emerging powerhouse of financial services distribution

Accelerating PSL Lending: 

Banks/ NBFCs are mandated to ensure anywhere between 40- 75% of their credit goes to the PSL sector. With SFBs the, percentage is 75% to ensure that the Economic activity of the country is propelled in the right direction:

Problem A: Geographical Coverage: PSL Lending Activity inGeographies such as UP, WB and North-east is lower than the national average.

Problem B: Shortfall: In an absolute term, 2020-21 saw a deficit of ~8000 crore in the PSL achievement (before the ADEPT adjustments)

Fintechs have been actively operating in the area of PSL lending, be it identified sectors such individual women, export enablement, Construction, Food Processing etc. along with the low activity PSL Zones. 

Despite the above:• Same high rates are given by banks/ NBFCs to Fintechs for priority lending• Processes such as wet signatures, vetting of Udayamcertificates etc. increase hassles and ultimate cost of borrowing to the customer

Proposed Solutions: • Provision for Fintechs to borrow at cheaper rates especially for Priority Sectors• Increase Credit Availability to Fintechs Provision to increase availability of Funds through means such as: banks can issue PSLC certificate through the eKuber portal of RBI, Fintechs should be given provisions to allow raising funds at similar cheaper mechanism• Allow Aadhaar based verification and the e-Sign facility to avail credit under special facilities such as Udayam

Honoring the distribution SMBs:

While the current financial regime does provide impetus to Manufacturing/ Logistics SMBs, when it comes to distribution,there is still scope for improvement. Distribution is the backbone of any economy, ensuring price competitiveness, reduce migration to already populated urban centers, sending out feedback to manufacturers to improve their Product Quality etc.• Increase the ambit of PSL network by covering Distribution business, helping them borrow at a competitive rate• Rationalization of TAX liabilities to enable more capital inflow in helping them improve the business Process, geographical expansion• Credit Guarantee Schemes for the Distribution businesses

Enabling Tech for Good:

Fintechs are tech companies that are able to build scalable financial solutions to serve markets that are currently underserved, ignored or the needs of which are not recognized. Research** has proven that despite increased financial activity in India, there has been a negative impact on the overall poverty levels of the country because the penetration has not gone to the last mile, thereby increasing migration to urban centers and causing an imbalance.

Fintechs aim to improve the distribution of Credit to the actual last mile, targeting the real problem with Financial Inclusion today.

However, Fintechs are burdened with the following:• Very High cost of Credit• High taxation, reducing the capital and ability to grow their ability to serve better• Dependence on NBFCs, SFBs, Banks only to serve the identified need of credit which also come with FLDG requirements squeezing capital out of Fintechs again• Heave amount of paperwork needed to carry their day-to-day activity again increasing cost and the time to service the customer

Proposed solutions:• Allow Fintechs to take advantage of the Credit Guarantee schemes. The Government can benefit from the power of distribution of Financial Services of Fintechs• Rationalize taxation: While Manufacturing, Export Companies get benefits through multiple tax breaks, taxing fintechs at higher rate who are able to improve credit availability to these SMBs leads to increasing their costs. • Structured tax reduction policies to help Fintechs carry out their Programs is a win-win.• Taxation can be levied by defining a structure that includes Sectors and Geographies served by Fintech, thus propelling their efforts towards underserved areas

Mr.Sanchit Malik, Co-Founder & CEO, Pazcare

COVID-19 has accelerated the growth of the insurance market in the general public. And with technology taking over, the insurtech sector has risen rapidly. 18% GST on insurance premiums could be decreased, according to some experts. Tax relaxation is expected as startups have suffered huge losses due to the pandemic. It has highlighted the need for having health insurance and tax benefits should be encouraged for the same. The budget is expected to take India out of COVID aftermath. Healthcare facilities and infrastructure should be focused upon to ensure India’s standing in the longer run. Insurance penetration should be boosted as insurance is available for everybody but not everyone avails of it. Foreign Direct Investment (FDI) was increased in FY2021 while keeping in mind that at least 50% of board members should be Indian residents. This would in turn introduce Indian citizens to newer technologies and expand the insurtech horizon. The budget for 2022 is expected to help startups and the insurtech sector in the same manner. 

Animesh Jain, Chief Delivery Officer, India & Americas, [24]7.ai

Hybrid operating models are here to stay, and the current dynamic business environment calls for equipping employees to conduct business from their homes. Besides maintaining the office infrastructure, the employer must now bear additional expenses for setting up home offices- such as ergonomic furniture, internet connection, etc. I urge the government to provide an exemption on any additional costs in setting up employee home offices.

Raj Khosla- Founder and MD – MyMoneyMantra.com

Individual taxpayers

Most taxpayers will be hoping for some relief in tax this year, but given the prevailing circumstances, it seems unlikely that the budget will reduce tax. In fact, high-income earners should brace for higher tax as there could be an increase in the surcharge on tax.

If a surcharge is indeed in the pipeline, there is a case for increasing the basic exemption limit for regular taxpayers from Rs 2.5 lakh to Rs 5 lakh per annum. It is not as if this move will push a huge number of taxpayers out of the tax net. Under Sec 87A, anybody with an income of up to Rs 5 lakh is already eligible for full tax rebate. 

So raising the basic exemption to Rs 5 lakh will only affect taxpayers in the middle and upper income groups. Since upper income taxpayers are already paying a surcharge on tax, the higher basic exemption will give relief to middle income taxpayers.

Accordingly, the basic exemption for senior citizens (above 60) should be raised from Rs 3 lakh to Rs 6 lakh and very senior citizens (above 80) to Rs 7 lakh.   

Tax benefits for work from home
COVID-19 has changed the way we work. But thanks to technological advances, one can work from anywhere without physically going to office. However, this requires the individual to invest in equipment, gadgets and pushes up his usage of tech services. Many companies provide laptops, computers and furniture to employees to work from home. Others give a fixed allowance to employees to bear the cost of remote working. The budget should clarify how these costs are to be accounted for by companies as well as provide some relief for such allowances to employees. Such payments should be exempt from tax in the hands of employees if supported by actual bills.

Budget expectations for salaried middle class

The NPS is a good option and encourages retirement savings by offering several tax breaks to investors. But there is no such investment option for education savings, even though saving for children’s education is a key financial goal for Indian parents. If the Budget introduces a new instrument for education savings along the lines of the NPS, it will boost investments for this goal. Just like NPS, contributions to this Child Education Savings Scheme should be eligible for tax deduction. Switching between funds should also be exempt from capital gains tax. To ensure that the funds are not misused or channelised for non-education needs, the maturity and redemption proceeds should be sent directly to education institutes.

Home loan deduction and standard deduction for rental income

The real estate sector is in the dumps and needs to be revived. One way to do this is by hiking the tax benefits for self occupied houses as well as rental income. In 2019, a new section 80 EEA gave first-time buyers an additional deduction of up to Rs 1.5 lakh for interest on loans for affordable houses valued at less than Rs 45 lakh and on loans up to Rs 50 lakh. This additional deduction is only till 31 March. Not only should this last date be extended but the house value limit should be raised to Rs 75 lakh so that more people will benefit from the change.

Apart from this, rental housing should also be encouraged. Tenants are at an advantage because they can claim full tax exemption for HRA received. But landlords have to pay tax on rent after a 30% standard deduction. This standard deduction needs to be revisited. People don’t invest in real estate for renting because they fear tenants will not vacate and because rentals are low. While the Model Tenancy Act 2021 has taken care of the first concern, the second can be addressed by reducing the taxability of rental income. Even a marginal increase in standard deduction to 35-40% will make a big difference and encourage more people to invest in real estate.

Avneesh Kumar Agarwal, Founder & CEO at SpeckyFox

“The pandemic has really impacted areas like the hotel and hospitality sectors, small-scale businesses, MSMEs, and people have lost their jobs too. This year’s budget should focus on reviving the travel, hotel, and hospitality sector by giving them sops like interest-free loans, reduction in taxes and GST. Due to the pandemic, we all have learned that strengthening the public health infrastructure and bringing pollution control measures are a must for our country. The Finance Ministry needs to focus here too. The demonetization, GST, and now pandemic have really hurt the small scale industry and MSMEs really badly. MSMEs contribute 30% to the country’s GDP. This budget should give them the utmost priority in giving them tax rebates, relief in GST, and other sops. Currently, the GST is the same for a product bought from an MSME as well as a large MNC. If the government is asking and promoting the “Make in India” regime, support to MSMEs by reducing the GST for them is a must. The GST rates and structure needs to be rationalized for small businesses.The government also needs to bring a lot of revolution in individual tax structures. The tax rates need to be reduced so that the common man can get more money in his purse. This will help to generate the demand and economy. In addition, keeping different tax rates viz 10% for capital gains and 30-40% for high salary bracket people might not make sense. These two rates can’t be clubbed in one go but the difference needs to be reduced. Last but not the least, the divestment of the PSUs should be fastened seeing how good the stock markets are even during pandemic times. A plan needs to be chalked out for the top 10 PSUs.”

Mr. Rishabh Goel, Co-founder & CEO, Credgenics

“Ease of business

 While over the years there have been several improvements on this front, but a few changes could further help the Startup. From the taxation point, there are benefits available for startups under 80 IAC , under Section 56 etc of the Income tax act. However, to avail the benefits, the startup has to apply for registration separately. If these can be managed through a single window system, at the time of registration of the startup itself, it will be just   so much easier. In other words, whatever benefits are available to a startup should be available through a single registration.  

ESOP   

Another important pillar for the success of startup is the people. And ESOPS play a big part towards the same. The budget should bring changes to taxation of ESOP’s for a startup . These should be more employee friendly and something at par with the global practices, which will help attract/retain talent 

While Government has introduced some measures related the deferral of tax liability on ESOPS, this is available only to those startups which are holding Inter-ministerial Board Certificate, and therefore this benefit (deferral)  may not be available for startups which are in the process of obtaining this registration . Surely there is scope for some intervention here.”

Divyata Shergill, Founder at  ShaadiWish


“As the pandemic shows no sign of abating any time soon, the main objective of the budget should be to reduce input costs, minimize compliances and incentivise start ups by giving tax exemptions. If the pandemic hits the economy in the same catastrophic manner as the second wave, the GOI should consider providing a salary support package for start ups (like the US and UK model). Lastly and most importantly, as the focus seems to be shifting to online education, it is imperative that children from underprivileged backgrounds are provided necessary support to ensure that they do not opt out of the learning system. In a nutshell, the theme of the budget should be to provide a protective shield and safety net to ensure stability and progress in the year 2022.”

Nilesh Patel, CEO and Founder of Leadsquared on the startup sector

“The significant investment made by Government of India has played a pivotal role in nurturing the Startup ecosystem. Initiatives like Startup India & Make in India have accelerated the growth of the ecosystem and impacted almost every sector in India. And in turn, start-ups contribute to the Government mission of driving job creation across the skill spectrum. One ask from Budget 2022 will be to make it easy to list Startups outside India; it will be huge.”

Srividya Kannan Founder, Director-Avaali Solutions Pvt Ltd.


The tech sector is still reeling under the effects of the ‘great resignation’, and coupled with increased customer demand, talent attraction is a key priority. Budget 2022 should give a significant boost to the startup ecosystem. Tax on ESOP’s should be levied only against the sale of shares for all DPIIT recognized startups. There should also be incentives for employee training and development skills to ensure a well-equipped workforce to meet the growing tech skill demand. The budget should announce reduced GST rates for the MSME sector, providing the much-needed impetus for further growth. Also, credit terms for billings from this sector should be brought down to 30 days from the current mandate of 45 days”.

By Lexship Founder and CEO, Padmanabhan Babu

To give momentum to India’s focus on exports and create an Atmanirbhar Bharat, it is important to understand our exports in granularity. Out of the $526 bn of exports, Retail export is estimated to be between 76Bn to 100 Bn$, a segment that is growing around 25-30% CAGR.  This segment primarily comprises of Direct to Customers (D2C brands) and retail sales fulfilled by Small entrepreneurs (over a few 100 thousand) comprising of artisans, small traders and BFH (Business from Home) driving this. The paradigm shift in international trade globally is now driven by MSME’s, worldwide economies are trying to regularize and ease these trade flows by making it compliant, competitive, and easy to use. Government of India over the last couple of years has been focusing on this and has taken many steps that brings in ease of doing business, they are Digitisation of Customs, Faceless evaluation, Simplified KYC etc. 

Recommendation 

Existing export trade representative bodies, rules and regulations have been conceived and setup for the traditional Production / B2B oriented business. Current budget might be a good opportunity to 

  1. Create – A trade body focused on small and retail exporters comprising of Market places, Payments and Logistic service providers, which can help the government in policy formulation to ease retail exports, is able to address the skill gap in technology, product promotion and compliance. 
  2. Adopt / regulate – Use technology to automate processes related to exports, to name a few
    1.  eBRC (Bank realization Certificate) process can be automated for retail exports, to minimize exporters physical intervention
    2.  Returns: “Returned products” contribute to a considerable volume in ecommerce, formulating rules that factors returns in retail ecommerce business is key. Managing returns is important to reduce cost of doing business and keep this segment competitive”.

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