The NDA government is all set to present the Union Budget 2019 on February 1. It’s going to be last budget of the current regime as the Lok Sabha elections are scheduled later this year. Officiating Finance Minister Piyush Goyal is likely to present the budget in the absence of Arun Jaitley, who is undergoing treatment in the US and has been advised rest by his doctors. This being an interim budget before general elections, people are expecting it to be a populist one. While the poor and the middle-class have great expectations from Union Budget 2019, let’s take a look at what the real estate industry, start-ups, the IT sector and others are hoping from the exercise.
CP Gurnani, MD & CEO, Tech Mahindra: “We need to sustain our global competitiveness and ensure continued support to the start-up ecosystem. We need to further improve the ease and cost of doing business in the country by enabling a feasible policy and tax framework. In Budget 2019, we hope to see more initiatives towards the training and skill development of our youth, thus, addressing the employability issues in crucial next generation technologies such as Artificial Intelligence, Blockchain, 5G, Machine Learning, and Cyber security. Additionally, continued thrust to the Digital India program is essential”.
Rahul Garg, CEO & Founder, Moglix: “We are looking forward to the upcoming budget, as it is expected to bring some significant changes in policy and tax system. In the past, making way for the GST, policy reform & implementation around digitisation etc by the government led to rise in India’s ranking in the ease of doing business index. However, the recent policy amendment to the foreign direct investment (FDI) bill is ambiguous and can slow down the speed of start-ups in the country. The government should come up with regulations that simplifies our life as entrepreneurs and makes it easy to run businesses. The Government in the past has introduced several schemes targeted to encourage and boost the start-up ecosystem, however we still have a long way to go and a steady momentum needs to be maintained.”
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Maulik Doshi, Senior Executive Director, Transfer Pricing and Transaction Advisory Services, SKP Business Consulting LLP: “With positive developments like REITs and RERA the budget 2019 should maintain the investor sentiment by introducing the below mentioned amendments:
* Provide an ‘industry status’ to the real estate sector which would enable ease in accessing capital.
* Insert ‘affordable housing’ in the priority sector list for lending by financial institutions and establish a separate department for obtaining the necessary approvals.
* Amend section 80 IB (providing deduction toward expenditure incurred) to increase the qualifying carpet area (30 sq.mt/60sq.mt in metros and other cities) which ensures broader coverage.
* Enhancing the limit of Rs. 2 lakhs for payment of interest on self-occupied properties under Section 24.”
Nakul Himatsingka, Managing Director, Ideal Group: “The sector is currently saddled with three compelling issues of high inventory, low liquidity and high input costs . I hope the Budget addresses these issues by introducing financial reengineering concepts to overcome NBFC crisis , favourable deductions and benefits in the tax structures , rethinking the GST policy and applicable percentages , reduction in thehome loan rates , focus on infrastructure development and growth . Overall , the Budget , through its policies , should create a snowballing positive sentiment that would undoubtedly effect our sector positively.”
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Sachchidanand Rai, Chairman – Eden Realty Group: “The PMAY schemes for Affordable Housing has provided tremendous boost to struggling Real Estates Sector post long pending economic reforms. It has not only helped the sector survive, but also forced it to understand the importance of the huge ‘bottom of the pyramid’ opportunity which has been left dormant.The push is in the right direction. What is needed is continuation of the policy for at least next 5 years.”
Abhishek Bhardwaj, CMO, Shristi Infrastructure Development Corporation Ltd: “Our expectation from this year’s Union Budget will be reduction in house loan rates for home buyers with more tax benefits to the consumers. Also, a GST rate revision (for home buyers) is expected by the realty sector in this year’s budget. A revised and buyer-friendly GST rate would help boost the realty sector, especially in the affordable housing segment.”
Shivam Sinha, Founder and CEO, Indiassetz: “We are hoping that this interim budget will bring some relief to both the developers as well as buyers. Rationalisation of the taxes on real estate and streamlining of taxation norms will make it more attractive and incentivised for people to invest in this sector. We expect the budget to focus on facilitating smart city growth and infrastructure. Real estate holds immense potential and investment opportunities as it addresses the future challenges of the society and also goes a long way in boosting the socio – economic confidence and willingness to invest in the minds of the people.
“We look forward to structural incentives, funding announcements in the upcoming budget and a convincing game plan to ensure that the allocated funds are utilized as specified, within a specified deadline. We expect the government to provide interest rate subvention for first home buyers and generate separate income tax exemption limit for EMIs on housing to make housing affordable for the middle class. We also expect the government to increase the home loan caps eligible for subsidy and abolish angel tax for Government recognized start-ups.”
Sunil Gupta, Exportersindia.com: “Despite making huge contributions to the economy, SMEs often face a multitude of challenges that restrict their growth. Due to numerous issues like lack of sustainability, insufficient funds, limited access to resources, heavy competition from large entities, small enterprises often fail to meet their true potential. Although the ongoing digital revolution has allowed better connectivity while enabling MSMEs and SMEs to gain exposure to the global market, the struggle is constant. However, with the 2019 Union Budget approaching fast, the scenario may change. Though the GST reform has given a huge relief to the SME sector. Easy availability of loans, allocation of money in the digital lending sector and tax breaks would be our prime expectations for SMEs from this budget”.
Mitesh Shah, Head of Finance, BookMyShow: “The past year has seen heightened activity in the Indian startup ecosystem with regard to funding as digital companies have attracted copious amounts of foreign capital. Beyond aiding the massive FDI inflow into the country, digital and tech-enabled startups have also enabled employment opportunities giving a thrust to the economy at large. Facilitating a conducive growth environment for such companies is key and hence, clarity around taxation and the regulatory environment will further help build a strong technology ecosystem. This will be a significant needle mover for the Indian economy.
Global markets offer simpler public market listing norms resulting in massive flights of capital overseas. Stringent capitalisation norms in the country have resulted in startups opting for global markets for a public market listing, despite having a strong Indian market presence. We hope Budget 2019 will enable a better framework encouraging companies to list on the Indian bourses itself which in turn, would provide domestic investors an opportunity to participate in this burgeoning sector. Clarity around these norms will also put Indian stock markets at par with global peers in attracting large consumer focussed Indian businesses to go public.
“On the digital payments front, while the framework for better allocation and more thrust towards digitisation, has helped the fintech landscape grow significantly over the last 2 years, providing more direct incentives for merchants to enable digital payments will further reduce the dependency on cash transactions in non-metro cities. 80% of movie ticketing in India is done offline and incentivising merchants through lower MDR or cashbacks will help build the digital payments and financial services ecosystem that will in turn help grow the scope of entertainment online.
“The GST Council’s move to reduce the Goods and Services Tax (GST) on movie tickets will boost footfalls towards cinema consumption as also help alleviate piracy issues surrounding the industry. We also urge the government to push for incentives to facilitate the growth of such industries. Live entertainment offers huge scope for employment and growth of the Indian economy. We hope that the GST Council along with the government can find solutions to streamline the existing tax structures for this sector as well and bring it below the current rate of 28%, to enable a well-rounded ecosystem.
“Additionally, promotion of schemes for creation of infrastructure for live entertainment avenues in metro and non-metro cities will help build India’s entertainment ecosystem at par with global standards.”
Ashwin Bhandari, CEO, iVOOMi: “We are looking forward to provisions by the GoI in the budget which will be in the interest of making Indian manufacturing facilities at par with global giants, which will tremendously benefit exports and increase exports from India manifold. Increase in exports will lead to India becoming a manufacturing hub of the world.
“Also hoping to see reservation of budgets to provide strategically located infrastructure support to small component manufacturers. This will further support the Make in India initiative, taking manufacturing units to the next level in terms of capabilities and growth. Releasing special funds for this will help Indian factories/manufacturing plants become the global manufacturers and India could be the manufacturing hub of the world in the next 3 years.
“It would be great to see the budget-making provisions for incentives for contract manufacturers (LCD panels, battery cells, mouldings, and the likes of it), to achieve comprehensive growth at a large scale, supporting the Indian factories in reaching the next level and becoming a global manufacturing hub.”
Rajesh Uttamchandani, Director, SYSKA Group: “In the past year, we have seen tremendous growth in the Indian FMEG market as consumers are becoming more aware about environment sustainability. This has also resulted in greater consumer adoption of LED lighting and other energy-efficient products & solutions. In this year’s Interim Budget, the Government of India could look at augmenting the manufacture of such products through a further hike in import duty for this sector while reducing the tax rate for domestic manufacturing. These steps would also support the Government’s ‘Make in India’ initiative further while reducing India’s carbon footprint, in line with the country’s commitment to the Paris Agreement.”
Parag Agarwal, Founder & CMD of Janajal: “Growth of the social sector is critical to the development of India. The Government of India needs to build strong focus on making safe drinking water available to people at an affordable cost. It is imperative that drinking water be priced so that it is valued and thereby made available in a consistent and sustainable manner.
“Decentralised water infrastructure is the order of the day and water ATMs are the ideal alternative that besides safe water, also deliver jobs and social entrepreneurship opportunities to people.
“The Government should issue a national level water ATM policy and allocate funds to every State specifically for such projects so that they can be implemented across urban and rural areas besides smart cities and industrial belts.
“Debt financing should be made available from nationalised banks for installation and operation of water ATMs to encourage individuals to work as social entrepreneurs and serve communities besides earn a respectable livelihood.”
Kushal Nahata, Co-Founder & CEO, FarEye: “The Budget 2019 should include regulations that will drive organizations to digitise key logistics and supply chain processes. For instance, by mandating digitisation of certain key accounting, billing and logistics processes the government can ensure greater levels of compliance (especially with regards to environmental sustainability) and tackle corruption better. Also, this year’s budget should highlight the current state of eWay bill adoption.
“The pace of development of some crucial infrastructure remains slow. There is a need to speed up the development process of projects like the Dedicated Freight Corridor (DFC). We are also expecting announcements with regards to building integrated transportation hubs or Multi-Modal Logistics Parks.
“The government can plan to introduce special windows to help logistics startups compete with large technology providers when it comes to winning government tenders. Also, there is an urgent need to simplify GST, especially with regards to the logistics industry. Once multiple types of businesses are brought under an organized trade structure, supply chain organizations will be able to deliver better value propositions to customers and hence boost revenue collections for the government. Deploying a uniform GST rate across the country is another initiative that the government needs to talk about in this year’s budget.”
Yogesh Bhatia, MD, Detel: “As per the industry report, over 10 crore households are still deprived of TVs. Keeping this in mind, in order to increase the penetration of LED Television in the country, we urge GOI to further reduce GST for up-to 40 inches TVs to 5%. This move will certainly improve the consumer’s sentiments as till 40 inch TVs are a mass product towards Digital India. In luxury television segment, we are expecting the GST for 43 inches to 55 inches TVs to drop to 18% from 28%.”
Sunil Gupta, MD and CEO, Avis India: “India is rapidly growing to be a large market for travel and tourism industry and is expecting international tourist arrivals to reach 30.5 million by 2028, therefore the government should focus more on improving the infrastructure of the country in terms of developing more roads and maintenance of tourist places for increasing the economy from tourism. The government needs to allocate much more towards infrastructure this year as last year government increased infra spend towards roads, air, rail and inland waterways by almost 22% to 5.97 lac crores, wherein we are expecting it to get an increase to 30% this year.”
Surajit Das, Founder and CEO, Routematic: “The startup trend in India is on a spectacular growth path, however despite Government bringing various regulations to promote the emerging business, entrepreneurs continue to face various challenges. This time start-ups, SMEs and entrepreneurs are expecting this budget to abolish angel tax for Government recognized start-ups. This will unleash its own potential and will help Start-ups to grow by leaps and bounds. The early stage start-ups will also be nurtured with more investments.”
Ratna Chadha, Co-Founder and CEO, Tirun: “Cruise tourism, has eventually become popular amongst the traveler which is encouraging more and more cruises to come closer to India. The government has already played its role in recognizing cruising as an economic multiplier and is catching up with the world in terms of policies and infrastructure. In the upcoming budget, cruise liners are expecting the government to develop the infrastructure in a better way so as the number of ports can be increased which will definitely push the top cruise brands to enter the Indian ports.”
Nikhil Mantha, co-founder and COO of Piggy, Mutual Fund Investment App: “Any budget before general elections comes with huge expectations. My macro level focus points are around job creation, industrial infrastructure and Agricultural credit. Also I’m curious to see how the FM plans to balance tax cuts, subsidies if any, with fiscal deficit targets given that we’re missing our Q4 target by 0.2%. For investments space, I expect an increase in 80C limits to 2.5 lakhs from the current 1.5 lakh. Also, Investors are expecting the government to bring parity between the schemes and make these tax savings avenues more attractive for individuals. In the present scenario, any switch within the same scheme from debt to equity in ULIPs and NPS or any fund reallocation between them is not liable to taxation. But shifts between the schemes like in the case of a shift from a dividend option to a growth option or vice -versa, is liable to capital gains tax. Also I expect FM to promote implementations of blockchain technology to boost our public infrastructure and pave way for positive regulations for the same to be incorporated in our financial services infrastructure.”
Soumitra Gupta, CEO, Togofogo.com: “2019 is a promising year in digital sectors with increasing internet consumption. However, we expect from the government of India to add investments in these sectors to increase consumers’ accessibility to digital mediums and enable deeper internet penetration in the country. We expect that with budget 2019, the government will introduce relaxed GST slabs for digital start-ups in order to propel the next level of growth of this thriving sector.
“Besides, the government must focus on e-commerce logistics setup nationally so that refurbished market or online delivery market can track down their audience in tier-4 cities and beyond to provide faster delivery services.
“The government should increase more verticals to digital payment options and should aim to increase its awareness to witness a gradual shift from COD to digital payments.”
Joy Sharma and Sudeep Gupta, Founding Partners, Impactify: “The upcoming budget may introduce measures for stricter enforcement of the CSR laws to ensure that corporates carry out their responsibilities as prescribed in the Companies Act, 2013. While this is important, the government also needs to understand that corporates face genuine problems in complying with the CSR mandate. One of these problems is the inability to find credible NGOs to partner with. Impactify is helping solve this problem through its matching platform. The platform provides a public database for corporates and NGOs to identify partners and projects that best fit their requirements.
“Second, any pooling of CSR funds should be discouraged. Governments have previously tried to support corporates by pooling funds into a kitty to be administered centrally. This is counter to the essence of the CSR Mandate, which encourages corporate and social sectors to interact directly and learn from each other. In our opinion, corporates should continue to be responsible for spending their own CSR funds.
“Third, there should be a strong focus on data-driven need assessment. Companies usually undertake projects in thematic areas they are passionate about. Common themes such as education, sanitation, and Skill Development, may, therefore, get more attention than others such as reducing inequality, and environmental sustainability. The government can play a major role by providing grassroot data more frequently, enabling NGOs and corporates to design outcome-driven projects that address real need gaps.
“Finally, a strong focus is also required for monitoring implementation, over and above the current practice of tracking fund utilization. Impactify platform integrates easily to use monitoring tools, simplifying monitoring and reporting of outcomes, and bringing the corporates and NGOs closer together.”
Sudep Singh, Chief Evangelist and CEO, GoWork: “One major challenge that still remains is the angel tax. Many start-ups face the heat of clearing this outstanding amount from the funds, which keeps them from trying their hands at innovation at a consistent pace. Also, in order to enrich the Indian market, the rate of corporate tax, which is currently at 33 percent, should be reduced significantly. Lower rates of corporate taxes are one of the major factors that attract businesses to overseas markets. (For example, in Singapore, it is charged at 17percent, making it a profitable ecosystem for businesses to sustain).
“Another consideration should be easing the FDI norms for raising funds from private equity players who can strengthen the inflow for our commercial real estate verticals like office spaces, malls, hospitals and hotels. This is quintessential for the consistent growth of India’s realty and construction sector.”
Siddharth Jain, Founder, Brewhouse Ice Teas: “We believe that the Union Budget 2019 will have a positive impact on startups in the FMCG Sector esp. in the Indian tea industry. The past policies formulated by the government have been fruitful, and we expect that the new policies will ensure further growth in tea cultivation, tea export and tea consumption in the country. This will, in turn, help tea startups like us to contribute positively to the nation’s economy.”