Finance Minister Nirmala Sitharaman is set to present her fourth Union Budget on February 1, 2022. With just a few days left for the very important day in the financial calendar, we take a look at what India Inc. and various experts expect from the Union Budget.
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The Experts Speak on Union Budget
Mr. Juzar Khorakiwala President, IMC Chamber of Commerce and Industry & Chairman & Mg. Director, Biostadt India Ltd
Expecting Union budget to focus heavily on infrastructure development. Capex measures to boost exports, a roadmap for more disinvestment, larger allocation on education and health. Some sort of relief and support for high-touch industries would go a long way in overall growth of economy and employment generation. The budget could see several measures for creating robust ecosystem for strong semiconductor fabrication ecosystem as follow up to rupees 76000 crore scheme approved by Union Cabinet in December 2021 to boost semiconductor and display manufacturing in the country. This would also create advanced manufacturing jobs. On electronic side, hoping import duty rationalization to make local manufacturing more competitive in the global market.
Mr. Ajit Mangrulkar, Director General, IMC Chamber of Commerce and Industry
“As we continue to fight the pandemic, expecting the upcoming union budget to be a continuity in terms of focus on Atmanirbhar Bharat and on Health and well-being, physical and capital infrastructure, inclusive development, human capital and innovation and R&D. Keeping in mind importance of generating regional employment opportunities for inclusive development, there could be renewed thrust for 11 industrial corridors being developed in the budget announcement to boost industrialization of these corridors, including schemes for incentivized special economic enclaves, funding of dedicated freight corridors and port connectivities for faster movements of goods. With India showing promise in startup entrepreneurship, more support likely to be announced. On personal tax, some sort of relief, either hike in standard deduction or hike in 80C limit is a likely relief for middle class.”
Dr Mukesh Batra, Chairman, IMC Health & Fitness Committee, Founder & Chairman Emeritus Dr Batra’s Positive Health Clinic Pvt Ltd
India needs to increase its spending on healthcare from 2.5 percent of GDP to 3.5 percent to build a sustainable and affordable healthcare system for its people. It needs to urgently escalate its healthcare infrastructure and increase its number of trained professionals- doctors of all medical systems and paramedical staff. The budget needs to move its focus from sickness to wellness by providing its citizens healthy living conditions- basic housing, sanitation, and clean drinking water. Equally important is to invest in infrastructure for dealing with mental health issues – 24 x7 helplines manned by trained counselors. Spending on health education and creating awareness about healthy eating and exercise amongst its citizens will go a long way towards creating a Bimaari Mukt Bharat.
Mr. Farhat Jamal, Chairman, IMC Travel, Tourism & Hospitality Committee & Group Advisor – Hospitality, Hiranandani Group
The third wave has rendered hospitality establishment ruined. The estimated losses would be around Rs. 200 crores. The industry will be permanently debilitated if urgent relief measures are not forthcoming. The impact of lockdown measures and restrictions amounts to the loss of business to the tune of 70-80 percent. There has been a lot of effort put in to bring back workers. Repayment of loans taken to restart operations after the lockdowns is another major area of concern. Establishments should be allowed to operate at least till 11.00 pm. State Govt. will have to support this time around, which may soften the blow to some extent. State Government should immediately come out with a direct salary transfer scheme for hospitality employees besides waiving off all statutory fees, taxes, and utility bills. It is also imperative upon the Govt. to come up with a credit extension scheme or some kind of moratorium to protect the owners and operators from credit defaults owing to the third wave.
Mr. Atul Joshi, Chairman, IMC Economic Policy & Government Representation &Founder & CEO, Oyster Capital Management & Advisory
The Union budget 2022 is expected to focus on fiscal deficit, as pandemic-driven stress is behind us. The fiscal deficit may be reduced by 20 to 30 bps compared to FY2022. The disinvestment drive will be stronger. Defense allocation will go up substantially. No substantive reliefs are envisaged on the personal or corporate tax front. A large part of net borrowings will go to service interest expenses. Subsidies and MNREGA will remain at elevated levels. Infrastructure expense may remain constant in the percentage of expenditure terms.
Mr. Arijit Basu, Chairman, IMC Banking and Finance Committee Senior Consultant AZB & Partners
India is just coming out of the throes of the pandemic and is currently in the midst of the third wave that has thankfully been less painful and disruptive. It is extremely important that the coming budget is supportive of the nascent recovery that is taking place.
Both the demand and supply side of the economy needs to be boosted. To support savings and personal consumption expenditure, it is necessary to have tax measures that augment individual income. Simultaneously, the Government must continue to itself invest in valuable projects and support private capital expenditure by sufficiently allocating for schemes like the Production Linked Incentive.
Health has come to the forefront and additional incentives to the insurance sector would be welcome.
Mr. Hareesh Tibrewala Chairman – IMC Digital Technology Committee Joint CEO Mirum Digital Pvt. Ltd.
Announcement regarding SEIS scheme is pending from the government for 2020-21 and 2021-22. This incentive helps small businesses, providing various digital and technology services in promoting exports. The government needs to make this announcement at the earliest.
Digital technology can play an important role in enabling healthcare services to reach rural India. Not only does this take care of the welfare of Indians living in rural India, but will also provide employment generation opportunities. The Government should consider promoting and incentivising health-tech solutions for rural India.
Mr. Dinesh Joshi, Chairman – IMC International Business Committee Chairman & Managing Director, SatyaGiri Ventures Pvt. Ltd.
Apart from investments in infrastructure, health sector, green energy, and ramping up the exports, the union budget should address:
- Middle Class: Offer higher tax rebates with regard to home loans and education loans. Increase the PPF limit to Rs 2.5 lacs from the current level. Allow loan for service sector on GST upto 70-75% on last 3 years basis.
- Startups: Government should make a Mega Fund of USD 1 bn to encourage the creation of more unicorns from which the government can reap the benefits too.
- MSME: Delay in payments to MSMEs by PSUs and the private sector must be dealt seriously. Easy access to capital and cheaper debt are needed along with favorable labour laws.
Ms. Sunita Ramnathkar, Chairperson, IMC Start-Ups & Innovation Committee & Designated Partner, Eudora Enterprise LLP
Macroeconomic stability, along with transparency in ease of doing business, is a must. There is a dire need for free trade in the cosmetics segment. We must also cease regulatory bodies like CDSCO, FDA, Legal Metrology etc. into cosmetics. Cosmetics enhance the beauty and confidence of a person through research and presentation and, besides studying its authenticity, nothing else is required. Drug laws cannot be applied here.
Mr. Niraj Johri, Founder, Casa Decor
“An exponential rise in the number of time individuals spend at home and ensuing newly regimented practices of hygiene and cleanliness, has led consumers to invest more in their home furnishings and décor. As a D2C for home decor purchases, our primary responsibility is to give a world class shopping experience to our users across the country/globe. Faster delivery ensures better customer satisfaction. In India, metros this is not a big challenge, however, when it comes to tier 2 & 3 cities and International shipments, which contribute to 40% amount of our orders, we face many roadblocks in terms of speed of delivery and reliability of services. We expect this budget to implement measures that would give a boost to infrastructure and logistics. As per industry reports, home furnishings and decor trade in India is expected to clock 20-25 percent growth with healthy margins in FY22 – setting expectations for large trading volumes in the coming months.”
Ms. Heena Sehrawat, CEO, Geetanjali Miracle Makers
“The Indian real estate sector would want the government to increase the tax rebate on home loans to Rs 5 lakh from Rs 2 lakh, grant it ‘industry status and revisit the affordable housing criteria. The cap on the affordable housing projects of Rs 45 lakh is very minimal, therefore, we urge the government to increase the limit to up to Rs 80 lakh in metro cities and Rs 50 lakh for non-metro cities.”
Parag Agarwal, Founder & CEO, JanaJal
“A decentralised system of safe water supply, treatment and distribution supported by optimised management of water resources can be extremely helpful in improving the health of common people while facilitating the country’s economic growth. India has realised the importance of safe water and its conservation and launched Jal Jeevan Mission in 2019 with the aim to provide safe water to every household by 2024. The execution of this mission requires a two-pronged approach that includes piped water inside households and delivery of safe water to the doorstep of households through use of innovative technologies. With 30 million homes already receiving access to safe water so far, the hopes and expectations of people from the upcoming budget have spiked manifold. Besides, it is equally important to make provisions to attract investment in the sector from interested players. Government push on the adoption of innovative technology in the sector would be extremely efficacious. Technology is the only way to harness spare capacity of existing water treatment plants and thereby mitigate the water woes faced by people across urban, semi-urban and rural areas. So, the industry expects greater allocation to the water sector from this budget along with an emphasis on rapid adoption of approved technologies that can speed up the prescribed targets under Jal Jeevan Mission.”