Budget 2020: What Indian startups are expecting from Nirmala Sitharaman

Mr Amit Gupta, CEO & Co founder at Rapyder
We are optimistic about the country’s economic growth as he foresees better days compared to the current slow down. He said, “India, no doubt continues to remain the software development hub for the world. More hurdles in the path of MSME growth would be removed as I foresee a significant relaxation in the lending aspects for MSMEs to survive the current economic changes. Government could relax some of the compliances, which were  mandatory earlier. It will also address the issue of delayed payments to MSMEs. The ecosystem of MSME lending is set to see significant transformation. Thanks to better access to authentic data from various credible sources that provide a better understanding of the nature of the specific business, its growth potential and profits.
Government will become even more citizen friendly, by providing a boost in consumer confidence with lowering personal income tax in the coming budget. This is inturn is expected to fuel demand of goods and services, leading to consumer-spending more  for buying and consumption.

 

Mr Shailesh Shah, Co founder at Strata Consulting
India needs to garner over $10 trillion to get its urban infrastructure going in the correct direction.  We need relevant, innovative and bold policy interventions to help make this happen. In the short term, we need to foster exports and domestic consumption while we start thinking beyond taxes the way we currently are to balance budgets. The Insolvency and Bankruptcy Code is a step in the right direction but is  in its infancy in comparison to the depth and width the nation needs to resolve thousands of cases and trillions of rupees. As a nation, we need to commit to monetary policy that helps align inflation and interest rates to massive growth.

 

Dr Vaibhav Kapoor, MBBS, MS & Co founder at Pristyn Care
As a startup trying to increase the accessibility and affordability of minimally invasive surgical technologies beyond the confines of corporate hospitals in Tier-1 cities to Tier-2 and Tier-3 cities, we could benefit a lot from partnerships with the government. Existing infrastructure of government hospitals, coupled with experienced surgeons and latest technology from the private sector can go to great lengths in ensuring that the vast majority of the population, that was previously bereft of the benefits of quality secondary care, can now be guided on the path to health. As the largest and sole provider of Laser General Surgery treatments in India through Ayushman Bharat, Pristyn Care has already taken steps in this regard to extend the benefit of Government schemes through a hassle free patient experience, but now the Government must also include provisions for such partnerships in the upcoming Union Budget.

 

Mr. K. G. Prabhu, Group Chief Financial Officer, Smartlink Holdings Ltd
“As India is gradually moving forward on the path of digitization, for Union Budget 2020, government should focus on giving a strong push to the initiatives that will drive the process of digital adoption across various sectors. We are expecting that the upcoming budget will have measures to encourage domestic manufacturing by introducing polices that will allow global companies to collaborate with Indian companies and manufacture in India.”
Mr. Rachit Chawla, Founder & CEO, Finway
Better liquidity and sector-specific incentives to MSMEs should be the top priorities of the Finance Minister in the Union Budget 2020-21. 6.5 percent GDP growth in the coming fiscal is not a formidable task once liquidity resurges and conditions of MSMEs get improved. There is a strong connection between the health of NBFCs and the health of MSMEs. The financial goals of the latter depend a lot on the financial stability of the former, and their collective growth is an index to economic growth. IL&FS and DHFL crises bring drastic repercussions on India’s financial markets and MSMEs, the back-bone of the Indian Economy are still bearing the brunt of reduced liquidity in the market. A large number of MSMEs are struggling with financial challenges, and without special subsidies, their sustenance is difficult. It is very much shocking that out of 6.33 crore MSMEs in India, only 0.05 lakh are medium enterprises, and they usually deprive of Public Procurement Policy which mandates 25 per cent procurement from MSEs. They are also barred from availing delayed payment reliefs through facilitation councils. So, to revamp the economy, the Finance Minister should take adequate measures which may empower the NBFCs and consequently ensure better prospects for the MSMEs.

 

Mr. Manish Lunia, Co Founder of FlexiLoans.com
“MSME sector has been the backbone of the Indian economy with over ~30-40% contribution to GDP despite social, logistical and, resource-based challenges. The Indian businessman has battled the woes of Demonetization, GST implementation, Banking Crisis and Credit crunch, etc. in the past 5 years and pessimism around the system is under-represented, if at all. The Budget 2020 should make efforts to empower the growth of MSMEs by providing them access to required credit with the help of supporting financial institutions with encouragement on data, credit guarantee, and easy documentation for availing finance along with expanding prospects of business across Sectors. Incentivization on using digital adoption by MSMEs will also be a stronger requirement while easing compliance around the same.”
Mr. Kausshal Dugarr – Founder and CEO of Teabox
“This year’s budget is being eagerly awaited by all stakeholders as the need of the hour is to revive consumer demand which in turn will spur economic growth. To tackle this, a reduction in personal income tax rates through concessions in tax slabs and an increase in welfare spends will boost spending. With the dip in foreign investment currently impacting businesses, steps towards a healthy economy will improve foreign investor confidence and attract more international investments. To reduce the burden on business owners, the government should initiate the simplification of various tax-related compliances and faster processing of tax refunds.”

 

Malini Agarwal – Founder and Creative Director MissMalini Entertainment
This year I suspect the overarching sentiment from all quarters will be for the government to take steps to immediately stimulate the economy and reverse the current morass that hangs over the industry.
We often think of large, independent unicorn stories when we think of startups, but the reality is many small and medium-sized enterprises operate downstream as suppliers to larger corporates. Therefore, I’d like to see policies that reinvigorate widespread consumer demand and spending, which in turn trickles down to the startup economy.
The most anticipated proposal would be the introduction of new progressive income tax rates that puts money back into the wallets of everyday consumers, following the recently implemented corporate tax cuts that have yet to bear fruit. Without confidence in sustained, robust demand, corporations are unlikely to reinvest their tax savings and therefore the two must go hand-in-hand for the benefits to be felt.
Aside from the demand for their services, startups need capital to build their enterprises. While VC activity has certainly grown in India, broader access to funds continues tightening as banks and NBFCs become more risk-averse. Many promising startups are unable to get off the ground due to simple working capital constraints. The government should introduce more financial sector safety nets to mitigate the crippling fear of bad loans, which would help loosen the purse strings.
Lastly, the tax and regulatory environment need further reforms targeted specifically at startups. We have certainly seen some progress, perhaps most visibly on the angel tax issue. And yet too much of an entrepreneur’s time and focus is still spent ensuring they do not run afoul of regulatory compliances, which can be obscure and subject to frequent change. Entrepreneurs have enough to worry about building and scaling a business, and doubly-so in a softer economic climate.  Therefore, any steps that would streamline compliances would free up a significant amount of entrepreneurial drive, talent, and energy which is exactly what we need right now.

 

Karishmma V Mangal Director and Trutee Thakur International School Cambridge
“The education sector featured prominently in Honourable Finance Minister, Nirmala Sitharaman’s, maiden budget in 2019 which was quite encouraging. I believe that further reforms in the education policies in the 2020 budget, will be favorable for the sector. To support and strengthen Indian education; initiatives, schemes, and policy inform should be implemented that promote India as an emerging global education hub and improve the overall quality of education within the country.
I support the highlight and landmark development of the 2019 budget which was the introduction of the New National Education Policy. However, I hope in 2020, the government will strive to bring about critical changes by addressing certain pain points including research and innovation, global visibility, quality faculty, and technology.
Most education entrepreneurs like me are hoping that the scope of higher education in India will be radically reformed. I believe that the idea should be to focus on better academic outcomes.
Rather than only focussing on imparting knowledge and learning to students, it’s high time we make them industry ready which is only possible by improving facilities in educational institutions by setting up smart classrooms and modern research facilities and making artificial intelligence, robotics, augmented reality, virtual reality, and Internet of Things (IoT) a part of student learning programs.
Besides reforms in the overall quality of education for students, faculty training should be made mandatory too. The country has roughly 8.5 million teachers and only 19,000 teacher training institutions. Teacher counseling programs should aim at training teachers to address the current learning needs of the students.
Lastly, subsidizing education loans is also the need of the hour as the funds given by banks for students looking to study abroad is too low considering the cost of education.”
Yagnesh Sanghrajka, Chief Financial Officer, 100X.VC
“Few initiatives are key to startup ecosystem’s growth in India viz. Scrapping of Sec 56 of ITA, Single window clearance in banks for overseas transactions, Easing the taxation of ESOPs and Scrapping of Valuation report requirements on investment in startups upto 25Crs by various regulatory agencies like ROC, Income tax dept.
In addition, setting up a Special VC fund by the Govt to promote and invest in early stage startups will go a long way in boosting our economy and reach the $5 tn. milestone before 2025.”
Mr. Tabby Bhatia, Founder & Director of Voganow.com
“We believe that allowing standard operating procedures for MSMEs will involve easy steps to access credit and boost the Indian market. This time we are having huge expectations from the government to bring business-friendly policies and tax reformations to boost this sector and economy since MSMEs are contributing the most in creating millions of jobs and accounting for a major portion of the country’s manufacturing outfit and exports. Also, we are also hoping that government will make some good and big announcements towards the success of ‘Make in India’ initiative.”

 

Mr. Rohan Sharma, Managing Director of RK Jewellers South Extension
In past 12 months, after the government has raised the tariff on gold, since then the price of gold is escalated. We are expecting government to come up with good policies to bring stability and better phase in the jewellery industry. We feel that there is an immediate requirement to cut down custom duty to 5% and import duty charges to 2.5% from existing 7.5 %. The industry is going through the roughest time now, so all industry players are keeping very high hope from our respected finance minister.