Archive: February 1, 2021

A very futuristic budget from the economy point of view – Mr. Ashok Mohanani President – NAREDCO Maharashtra

The Government has put their best efforts to put the economy back on track after the adverse effects of Covid-19 pandemic that the entire country went through. It has focussed a lot on infrastructure in this budget. This will indirectly help boost the housing demand especially in the Tier II & Tier III cities.

The Government’s decision to further infuse Rs. 20000 crore for public sector banks will help address liquidity issues to a large extent. The proposal to extend the Rs 1.5 lakh benefit on interest paid on affordable housing loans by one year to March 31, 2022 is an exceptional move which will boost the affordable housing segment and help to achieve the Prime Minister’s vision of Housing for All. It will also ensure that more and more homebuyers get to avail this benefit. The reduction in tax burden on senior citizens above 75 years will give a push to the senior-living projects.

Also, the Government’s continuous efforts to promote ease of doing business and digitization will help the real estate sector business in a long way going forward.

As anticipated, it’s a very futuristic budget from the economy point of view.

The budget 2021 supports startup ecosystem – Seema Prem, CEO and Co-Founder, FIA Global

The budget this year has given a significant support to startup ecosystem that will help turbocharge their growth. The concept of  OPCs with an option to convert into any other type of company at any time, reducing residency limit for an Indian citizen to set up an OPC from 182 days to 120 days, and allow also non-resident Indians to incorporate OPCs in India will certainly boost innovation.  Collateral free loans and fund of funds for MSMEs will stimulate growth and provide solace to MSMEs hit by the pandemic.

The portability of One nation, one ration card will be a boon for migrant workers and speedy implementation will ensure that migrants can move across boundaries without worrying about access to ration. The additional allocation to MNREGS will provide substantial relief to workers whose livelihood has been impacted by the pandemic.

Budget 2021- Digitalization of interaction with Government authorities will reduce corruption -Arun Firodia, Chairman, Kinetic

There are some welcome features announced by the government like faceless assessment. I would like this to be extended to all permissions/returns required to start a new business and run the business. Digitalization of interaction with Government authorities will reduce corruption and improve the ease of doing business.

Another welcome announcement is the correction of inverted duty structure. Government has announced its intention to support the electric vehicle industry. Our request would be:

a) Motor and controller are being imported at nil import duty. Domestically manufactured motor and controller should also be charged the same at nil duty.
b) Similarly, lithium battery cells are charged 5% import duty. The same rate should be allowed for domestically manufactured batteries
c) Instead of scrappage policy, which would be unwelcome, it may be a better idea to levy green tax on vehicles that are more than 15 years old
d) With the high cost of the battery, the electric vehicles are still more expensive than petrol-driven vehicles. My suggestion would be to increase the subsidy from Rs 10000 per kWh to Rs 15000 per. kWh and continue it for the next 5 years
e) In order to induce people to use electric vehicles, a sizeable number of amenity spaces should be reserved for charging stations.

On the whole, the budget is a good compromise given that we need to fund our defence budget given the threat from China.

“This is a budget of hope, a wand of positivity,” Says Ratna Mehta

“This is a budget of hope, a wand of positivity. This was a critical budget in the face of exceptionally difficult circumstances. A lot of hopes were pinned on the budget to pull the economy back to normalcy. FM was walking a tight rope of managing the deficits and boosting the economy. But she seems to have saved the day, increased the spending to boost employment and thereby consumption, which is a great move and need of the hour. Also, healthcare needed support where she has increased the allocation significantly. Startups will benefit from the tax exemptions and focus on digitisation, especially the startups in healthcare, logistics, education who will see increased growth opportunities. The corporate sector was spared cess and tax increases which will let the recovery continue undisturbed. To sum up, the budget of hope seems to be doing the right things, now the devil will be in the details and execution.”

Budget Reaction 2021-22: This Budget doesn’t mention the distress in education and skilling space – Vikram Kumar, CEO, Lrnable Group.

This Budget doesn’t mention the distress in education and skilling space. Hopefully the fine print of Union Budget 2021-22 will give clarity on the outlay in higher education and skilling space.

The FM has allocated over INR 3000 crore funds with a forward looking training plan towards the success of Atmanirbhar Bharat. However, the funds announced are similar the Union Budget 2020-21 for skill development, which was also insufficient. Though the government made a positive move by increasing the number of universities, amendments in the apprenticeship training scheme and training scheme, this may not be enough for the World’s largest young population with 600 million people under the age of 25 years.”

“Many congratulations to the nation, government and citizens for such a forward-looking budget 2021-22. This budget as the FM aptly puts is a digital budget, which endeavors to respond to the contraction in our economy due to the Pandemic, and also, to the year of 8th Census of the Independent India having population with highest demographic dividend across the globe.

Talking specifically about edtech and skill providing sectors, the budget outlay doesn’t give much clarity. The same INR 3000 crore for skilling sector this year too, like last year, will certainly help in the making of Atmanirbhar Bharat, yet an increased fund was required to bridge the gaps.

The steps including, establishment of more Sainik Schools and Eklvya schools, set-up of Higher Education Commission in India, this FY, for accreditation, regulation and funding for higher education institution and a Central University in Leh, are commendable, and will lead to reinvigorating human capital.

Besides, to benchmark skill qualifications and assessment, the country’s collaboration with other countries are expected to advise the country’s institutions/organisations/industries on the global best practices.

Part A of the Budget, a vision for Atmanirbhar Bharat, reflects inclusion of development for all, education for all and opportunities for youth, along with a large focus on developing India as a champion in the manufacturing field in the World.

This can be responded effectively with a central and unified framework to enhance and connect skills of candidates to potential employers with a dual objective – elevate employability and increase the ROI for companies via the hiring of right resources.

The FM requested that the corporate must support the economy to reset the country’s sustainable growth, which in a way, also talks about the talent pool it receives as per the 21st century skill needs apart from the investment it puts in supporting small ventures and entrepreneurs. And for the talented-cum-industry-skill-fit youth, the government’s focus on a unified framework of learning, upskilling and hiring till retiring, will ease the struggles of students, trainers, recruiters as well as corporate, at large, with an assured economic growth.”

Vikram Kumar, CEO, Lrnable Group.

Lrnable Group platforms (Mytat Recruitment and Mytat Classes), allow an individual/ institution/company to assess the skill gap, build the skills as in demand and get connected to organisations/corporates across various industries, while mapping an individual’s career growth.

Budget 2021 – “FDI in insurance from 49% to 74% is a key change”- – Raj Ramachandran, Partner, J. Sagar Associates

““FDI in insurance from 49% to 74% is a key change, and this will help bring in more investments to scale up business in India. Prior to this change, insurance companies had to be Indian owned and controlled, and with the change foreign ownership and control will now be permitted with safeguards. There is also a proposal to have sufficient number of independent directors, given the sensitivity of the sector. Will help boost the sector particularly given the pandemic and the likely inclination for more insurance cover. FDI in insurance intermediaries has already been permitted upto 100%, so this was an expected next step to provide effective stimulus for the sector.”

– Raj Ramachandran, Partner, J. Sagar Associates