Budget 2021 Expectation: What industry wants from Nirmala Sitharaman this year
As it is going to be the first budget during the pandemic, various sectors in the industry are hoping the forthcoming budget will considerate the impact the coronavirus pandemic had on different businesses. Let's take a look at some voices from the industry and their expectations from the upcoming budget.
Union Budget 2021-2022, which will be the first budget of this new decade, will be presented in the Parliament on February 1 by Finance Minister Nirmala Sitharaman. As it is going to be the first budget during the pandemic, various sectors in the industry are hoping the forthcoming budget will considerate the impact the coronavirus pandemic had on different businesses. Let's take a look at some voices from the industry and their expectations from the upcoming budget.
Prasanna Manogaran, Founder of Aqgromalin | An agri-tech startup
With the government’s target year of doubling farm income approaching we believe there will be significant allocation in categories helping to increase farmers revenue streams, especially in farm diversification into the sectors of aquaculture and animal husbandry. A stimulus for the export of aquaculture products will help the entire ecosystem and will also ensure that we are able to effectively compete with China and other South East Asian countries in this sector. The government also need to empower the existing Krishi Vigyan Kendras to increase penetration to the rural hinterlands and help farmers utilise the technologies developed by premier national research institutions like ICAR. The number of startups has also dramatically increased in the Agri Tech space, a focussed approach from the government to device policies to support them will go a long way.
Deepak Kumar Mohanty, Senior Vice President, IMFA (Indian Metals & Ferro Alloys Limited)
"In the current scenario, we expect, the Union Budget 2021 is going to be a path breaking Budget. With the disruption due to the pandemic & geopolitics and now with the roll out of vaccines, in the coming months, the world is looking at India as an alternate manufacturing destination. It is expected that all efforts will be made by the government to boost demand by instilling confidence in consumers and address the concerns of fiscal deficit as well. The budget expectations, particularly from the Ferro Alloys manufacturing sector’s point of view, are the measures which strengthen & promote value addition of minerals rather than export of the same auguring well with "Make in India" policy of Govt. of India with prudent & stringent policy thrust on disincentivising export of strategic minerals through export tax & also, measures which ensure level playing field to Indian Industry for competing in global market.
In this context, the cost of doing business including capital, logistic bottlenecks and availability of power at a competitive rate to power intensive sectors are also some of the key areas that needs to be addressed in the Budget to make Indian Industry competitive. Fiscal stimulus was necessary and union government has done really well with its nuanced policy of saving lives and livelihoods. Now we can expect measures from the forthcoming budget and further stimulus from finance ministry for a sustained recovery”.
Seema Prem, CEO and Co-Founder, FIA Global
We are hopeful that the government focuses on capturing the lost ground on growth in FY21/22. Increased spending, putting money into the hands of people for reviving demand should be the focus rather than fiscal consolidation. With this budget, a lower corporate tax rate for FY 21-22 would be considerate. This will help MSMEs bear the fallout of reduced business sentiment due to covid and help increase liquidity. Speaking from the investment angle, capital gain taxes and taxes on dividends should be removed to attract investments. Government should define policies for encouraging co-origination between banks/NBFCs/MFIs with Business Correspondents to enable burgeoning credit to MSME sector.
Sunil Bohra, Group CFO, UNO Minda Group
2021 will be the year of recovery for the entire economy globally and in India. I believe the Indian automobile industry will play a prominent role in the revival of the Indian economy. Industry-focused plans, policies and support by the government will energize the industry and sustain the momentum. The upcoming 2021-22 Union Budget should focus on strengthening the manufacturing sector, in keeping with the government’s visionary Make-in-India and Atmanirbhar Bharat initiatives. The government has already taken some positive measures in this direction with the introduction of Production-Linked Incentive (PLI) scheme, but there is a need for more clarity.
The automobile sector has experienced a rough phase for over two years now. The industry witnessed some of the major technology upgrades in terms of emissions and safety standards, besides going through the worst slowdown cycle, which was exacerbated by the Covid-19 pandemic. Being optimistic, we believe that the worse is behind us and a united effort all of us in the automobile ecosystem will help recovery.
The government can play a critical role in reviving the industry confidence. It should reduce the GST rate to 18% from 28%, introduce a scrappage policy, along with an incentive or tax rebate. We would also welcome a special allowance or rebate on R&D on green vehicles such as EV, hybrid and other alternate fuel vehicles.
Anuj Kapuria, Founder & CEO, The Hi-Tech Robotics Systemz Ltd.
After a roller-coaster 2020, we expect 2021 to be the year of economic recovery, upbeat sentiments and demand revival, riding on newer technology and innovations. Going forward, industry across sectors need to be more self-reliant, efficient and attuned to technology to survive future adversities. Newer technologies like robotic and automation will be critical in driving the economy to pre-Covid levels and beyond. Budget 2021 should focus on enhancing productivity by incentivizing the use of technology to make India self-reliant and future-ready.
India has, so far, seen very low robot adoption compared to its regional and global peers. Timely policy interventions can accelerate robotic adoption in manufacturing and warehousing. Special focus should be on warehouse automation where we have seen an increase in customer traction.
Interventions are required on multiple fronts – boosting demand, accelerating technology development and building a conducive ecosystem. Reduction of customs duty/IGST and providing tax breaks/incentives to robotics adopters can boost demand. For accelerating technology and R&D, setting up of robotics centres of excellence/incubation centres, continued research grants for robotics R&D and continuation of income tax deduction will be the key drivers. This will boost the confidence of technology-driven industry players and strengthen the government’s Make in India for Global & Atmanirbhar Bharat vision, besides making a remarkable contribution to employment generation and will make Indian industry more efficient and surpass the global standard.