Here's What Business Minds Think About Union Budget 2020-21
The Indian government has lately rolled out the Union Budget for 2020-21. The budget has addressed various problems, creating opportunities to strengthen businesses. While some sectors have received more focus, on the other hand, others have got less assistance from the centre.
The budget was created keeping in mind the calamity that is hampering the business economy. The government has aimed at elevating the overall economy and thus, given much-needed thrust. However, business minds have a mixed reaction towards the budget, which are as follows:
A center sponsored scheme has been proclaimed for the Indian healthcare industry in the latest budget. The government will be launching 'PM Atmanirbhar Swasth Bharat Yojana' with a corpus of INR 64,180 crore in 6 years. The scheme will be concentrating on augmenting the capacities of healthcare systems.
"The most noteworthy aspect of the healthcare outlay this year is a distinct integration of health and wellbeing with causative factors such as nutrition and clean air. This change in approach, driven by the once-in-a-century pandemic, augurs well for the overall healthcare landscape of India. The massive 137 per cent increase in the budgetary outlay with a dedicated corpus of INR 35,000 crore for COVID-19 vaccines was a much-needed step," Kamal Narayan omer, CEO at IHW Council, said.
The government has called innovation and R&D two of the six pillars of the budget 2021. The government has signaled its long-term commitment to the health of Indian citizens.
"There is no doubt that with this enormous jump of 137 per cent in allocation for healthcare, the government has finally decided to put its money where its mouth is. This is a tremendous booster shot for the healthcare sector and the well-being of our people. In addition to the National Health Mission, the allocation of 64,000 crore plus funds under the Atma Nirbhar Health Yojana must also be appreciated given the overwhelming emphasis on making India self-reliant in all spheres including healthcare," Dr Gurpreet Sandhu, President at Council For Healthcare & Pharma, said.
In the budget, Nirmala Sitharaman, the Finance Minister of India, has extended the National Infrastructure Pipeline (NIP) to 7,400 projects. The government is mainly focusing on NIP in the offing. The NIP will receive a surge in infusion from the central government and financial sector. The government will be uplifting the NIP in three manners--the creation of institutional structures, thrusting on monetizing assets, and augmenting share of capital expenditure in central and state.
"The overall focus of the budget has rightly been on revival and generation of more economic activity in the economy. The Finance Minister rightly pointed out at the outset that this budget has been prepared in never before seen circumstances. The government has committed to invest heavily in infrastructure building activities including major upgrades of the public transport system in urban areas, new public bus transport schemes and expansion of metro lines. This infusion of infrastructure funds will help generate much-needed economic activity and create new employment opportunities," Dr Vivek Bindra, Founder and CEO at Bada Business, said.
The startup ecosystem has received some relief from the government as it will get capital gains exemption by 1 more year, that is, up to 31 March 2022. They also have one additional year to claim tax holiday. A proposition is made to stimulate incorporation of one-person companies.
"New Definition of small companies for startups along with restrictions being eased for one-person companies & tax rebate will also help in the establishment of an increased number of startups. This will help revive an economy which suffered the utmost recorded slump due to pandemic," Vivek Tiwari, MD, CIO &CEO of SATYA MicroCapital Ltd, told BusinessEx.
The centre has pushed digitalisation, thereby, establishing National Digital Educational Architecture that will the groundwork for a more digitally-enlightened citizenry.
"The critical role of startups including health tech startups during the pandemic has been well recognised. In the backdrop of the accelerated push to digitalization, the setting up of National Digital Educational Architecture. However, the government could have spoken a few words on the National Digital health Mission. And as for building infrastructure in general, the sharp increase in capital budget at INR 44,000 is also noteworthy and signals the government's long-term intent," Sunil Thakur, Partner, Quadria Capital, an Asian healthcare-focused private equity fund.
Under the umbrella of Skill India, startups expect skill involvement from the Indian government that will enhance digitalisation.
"If pandemic would not have hit the nation, infusions would be more in digitalisation and other sectors. Every country has got confined cash and there is a limitation about that. So, the country has to follow and rotate in terms of expenses. The recent budget is more focused on creating opportunities internally and infusing renewable sources which will ultimately strengthen the economy. Other moves such as auto scrappage policy and a surge in railway budget are good actions," Shantanu Sharma, Co-founder and COO at BuildPan, told in an interview with BusinessEx
The government has decided to lower the threshold on NBFCs to increase recovery proceedings under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The step will usher credit discipline and in the long-term will increase penetration of credit to small businesses.
"The government has reduced the threshold for NBFCs to initiate recovery under the SARFAESI Act, 2002. The government has also doubled its allocation towards MSMEs, which would greatly support their revival and eventual growth. Holistically, the Union Budget 2021 is an encouraging event, yet we optimistically look forward to distinctive support for NBFCs, with a framework to provide them sufficient liquidity, while also furthering the credit guarantee scheme support to the MSMEs," Shachindra Nath, Executive Chairman and Managing Director, U GRO Capital, told BusinessEx.
Business veterans have embraced the budget but held high hopes, considering the adversity that they have faced for a prolonged time. It is yet to see how moves proclaimed in the budget will affect the market this year.
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