JOIN USReaction from India Inc and industry watchers
Alok Dubey, CFO, Acer India
The Union Budget announced today showcased the government's initiative towards Digital Transformation. From announcing a Digital University, for online learning to high-quality e-content across languages will enable the youth to skill, upskill and reskill themselves. These programs under digital learning and the connectivity expansion will further strengthen the availability and accessibility of the internet in rural areas. With the government infrastructure spending push, we are likely to see more employment and growth opportunities and enhanced private sector investment in manufacturing. We are confident that the exemption of duty on parts of select electronic items will further boost the domestic manufacturing of electronics goods under the PLI scheme. Overall, the Union Budget 2022-23 is a promising budget and a step forward towards ‘Aatmanirbhar Bharat’.
Ramesh Nair, CEO, India & Managing Director, Market Development, Asia, Colliers:
The Union Budget 2022-23 is forward-looking and focuses on a long-term plan for the country with digitization, urban development, and sustainability at its core. For the real estate sector, the budget placed an outlay of INR48,000 crores under the Pradhan Mantri Awas Yojana, and the construction of 80 lakh homes will facilitate affordable housing. This, yet again, showcases the government’s commitment on building affordable housing stock. However, we would have liked if there was more push on the demand side, such as extension & expansion of the credit linked subsidy scheme. The Budget made several announcements to spur the growth of the logistics sector in the country. The government repealed about 1,490 union laws in recent years, paving the way for improving ease of doing business. The government also plans to launch ‘Ease of Doing Business 2.0.’ This should include more dynamic aspects and make India a more investment-friendly destination. The budget announced a few laudable incentives for startups. The time extension provided to claim tax benefits will provide a breather for start-ups and encourage more start-ups in India. We look forward to the announcement on the replacement of the Special Economic Zone Act with new legislation. This has the potential to make export-led parks attractive for investments. The new benefits will also trickle down to technology companies who export services and have a positive bearing on commercial office real estate.
Om Malviya, President, Tezos India
We are happy to note that the FM has announced crypto tax provisions in this budget, legitimising crypto transactions in some way. However, it is disappointing to see that the Government has decided that the income from the transfer of digital assets will be taxed at 30 per cent -- which seems to be too high, given that the NFTs, cryptocurrencies and digital assets space is already booming and has immense potential for the economy in the near future. I am hopeful and certain that once the full potential of crypto is realised it will be lowered further.
PS Viswanath, MD&CEO, Randstad India
Budget 2022 is a futuristic and inclusive move to accelerate growth across a complete spectrum - digital economy, infrastructure, agriculture, digital health ecosystem, transportation and logistics, skill development and women-led development. The decision to maintain the fiscal deficit target at 6.4% for FY23 will certainly improve India’s overall credit standing in global markets. What excites us is the much-needed boost and purposeful focus that has been given for employment generation and skilling. Specifically, the productivity-linked incentive schemes in 14 sectors with the potential to create 60 lakh new jobs will be a definite game-changer. The setting up of a world-class Digital University and the DESH-Stack e-portal for upskilling, reskilling and cross-skilling will place India as a global hub for talent. The emphasis on sunrise opportunities in deep tech areas will make the Indian industry more competitive in global markets and open up significant job opportunities, especially for the youth in the country in these specialized areas. The government’s continued focus on enabling a more transparent system of governance, incentivizing companies to grow through initiatives like 'One Nation, One Registration' augurs well in the country’s quest to improve its ease of doing business and ease of living credentials, implementation being the key. In all, Budget 2022 is a bold step into the future to pilot India’s economy on an upward growth trajectory. Large HR Services organizations like us have a huge role to play, and we look forward to partnering with the government to conquer higher summits of inclusive growth for the country. The onus is now on the Government to ensure seamless execution of these key initiatives announced to understand how they will impact in the short term, but this budget can be considered as a winning booster shot for India's employment, skilling and digital narratives.
Mohamad Faraz, Founding Partner, Upsparks, an early-stage venture capital firm
The startup ecosystem in India is the third-largest in the global market and Budget 2022 has brought in some positive moves to help drive growth in the start-up sector in India. Extension of capital gains exemption for investments in start-ups by a year comes as a relief and will boost investor sentiment towards start-ups in India. The inclusion of a 30% tax would help to regulate the cryptocurrency sector in India however it could also result in a decline in retail investor interest and further clarity on the same could help boost investor confidence. Bringing digital assets into the tax regime is a welcome move from the government and it is important to see how the implementation will be done. The government should also instruct other stakeholders such as financial institutions to support cryptocurrency players to operate with ease. Currently, several roadblocks from banks make it difficult for cryptocurrency players to function smoothly. The move of bringing digital records, one portal for logistics movement across the country will also boost health-tech, logistics start-up sectors. Enabling the digital interoperability in banking and payments will further boost fintech innovation and opportunities and boost penetration beyond Tier 1 cities to small towns and cities. Interoperability through post-office and scheduled banking will enable fintech adoption in smaller towns.
Rana Mehta, Partner and Leader Healthcare, PwC India
The pandemic has caused a silent global mental health epidemic. The use of telemedicine to diagnose and treat such patients has proved to be highly effective given the unobtrusive nature of the interaction which also ensures patient privacy. Given the shortage of mental health professionals, especially in rural areas, telemedicine will greatly enhance accessibility for patients requiring psychiatric help.
Vikram Subburaj, CEO, Giottus Crypto Exchange
We are delighted by the announcements today. It gives relief to a lot of investors that the Government is recognizing the crypto-asset ecosystem and has taken efforts to give clarity on its taxation. This legitimizes the crypto asset in the country and paves way for a formal umbrella of regulations going forward. A standardized 30% tax treatment is welcome though we await the details on what is a taxable event and is the threshold for a 1% TDS deduction. We do hope that the Government will give exchanges and other businesses a certain time period to enable the tech behind TDS deduction and bookkeeping. Offsetting and carrying forward losses have worked well in other countries but we are happy to see a consideration given to all such instances. The issuance of a central bank digital currency (CBDC) by the RBI will enable an efficient transfer of the digital rupee much like UPI, IMPS or NEFT. This can make transfers cheaper and enable 24x7 serviceability. Overall, we believe that the ecosystem along with its businesses and investors are primed for growth in the upcoming future. The Government, we believe, has already laid the foundation for a future thriving and sustaining industry.
Sambit Chakraborty, Board of Adviser, Indigrid Technology, a company which helps with EV Battery-Swapping
Yezdi Nagporewalla, CEO Designate, KPMG in India
This is a pro-growth budget. It has taken a holistic and integrated perspective to all key issues including green transition requirements. Effective implementation should now be the aim to aid growth. With a continued focus on infrastructure development, the current union budget also aims to boost the renewable energy sector, offer much-needed support to the MSME sector, and make new headways into digital currency regulations. This will aid the growth of the economy and drive it out of the headwinds faced during COVID-19. Focus on and support for forward-looking technologies such as digital currency, 5G, EVs and use of drone technologies as laid out in the budget will help the country in its progress during the “Amrith Kaal”.
Peeyush Vaish, Partner and Telecom Sector Leader, Deloitte India:
The Honorable Finance Minister has again announced that the auctions for 5G spectrum and roll out will happen in the fiscal year 2022-23. The roll-out across the country will also happen much faster than other previous generation roll-outs considering the fact that the FM, in her speech, has also talked about the liberalisation of all villages by 2025. Focus on digital education including digital universities will further push the need for high-speed broadband across the country.
While the details of the PLI for design-led manufacturing in the 5G space are awaited, it could be broadened beyond manufacturers to the TSPs and telecom infrastructure players.
Also, the USO funds have historically been used for the rural infrastructure roll-out. A 5% allocation towards R&D and commercialization of the technology could help some of the indigenous niche players build up technologies around O-RAN and Private networks.
Deepto Roy, Partner, Shardul Amarchand Mangaldas & Co:
Sovereign green bonds would be an important source for funding carbon-neutral projects. Availability of funds would be a key driver to help India achieve its stated policy goal of deep carbonization
George Rajkumar, Country President, Grundfos India:
Budget 2022 has laid the foundation for India@100 with the Government showing its commitment towards a sustainable and greener future for Indians. With India expected to grow at 9.27%, the much-needed impetus towards climate action has been observed in this year’s budget. The allocation of INR 60,000 crores towards the ‘Har Ghar Nal Se Jal’ initiative to connect 3.8 crore households with tap water connection is commendable and will also boost the country’s water infrastructure. While nearly half of our population is residing in urban areas, the focus on sustainable measures for megacities must also include sustainable management of water and wastewater to prevent loss of water, improve recycling and also reduce the destruction from natural calamities such as floods and droughts. The roadmap of transitioning towards a circular economy across sectors is also a welcoming move and will have a direct impact on our fight against climate change. The introduction of sovereign green bonds for funding of green infrastructure and the energy audit mechanisms for large commercial buildings will be a game-changer for infrastructure projects, enabling further carbon reduction while we grow our economy by leaps and bounds.
Akash Gupta, Co-founder & CEO, Zypp Electric:
"The formulation of battery swapping standards and interoperability is a much-needed step in the right direction. There's been a lot of confusion in the swapping companies, which has dampened EV adoption. Seamless and widespread charging infrastructure is the need of the hour to accelerate the EV revolution in the country. The focus and thought towards the EV sector by the honourable finance minister reflects the government's poise towards accelerating EV adoption. This will also help us achieve our vision of expanding our battery-swapping network across 100 cities in the next three years I would have loved if GST in battery and spare parts had also been reduced to 5% like it's there for E-vehicles purchases; this would also help the entire electric vehicle ecosystem."
Rajeev Sharma, Chief Strategy Officer, Mitsubishi Electric India:
"This is a growth-oriented Budget, I am sure that stepping up the capital expenditure sharply by 35.4% will have an incremental effect on the overall growth of the economy. It is good that the policymakers understand that nearly half of our population is likely to be living in urban areas by 2047 when India is at 100. The announcement for an urban capacity building like mass transit, planning help, etc. would act as a good principle for the development of the country. The budget has demonstrated a good balance between today’s needs and the future’s demand.
Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles (SMEV):
We welcome the measures announced by the honourable Finance Minister, today. The budget for 2022–23 gives a huge impetus to the electric vehicle (EV) industry. Introducing the battery swapping policy and recognizing battery or energy as a service will help to develop EV infrastructure and increase the use of EVs in public transportation. It would motivate businesses engaged in delivery and ride aggregation businesses to incorporate EVs into their fleet. It will create new avenues for companies to venture into the business of battery swapping. Additionally, creating special clean zones will further accelerate the adoption of EVs and spread awareness amongst the citizens. The move will benefit the whole segment, i.e E2W, E3W, E-cars, and buses. The budget also provides attention to the need for skilled resources in the industry. Introducing new skill programs in ITI will bridge the skill gap that currently exists in the industry. The industry would be happy to work with the government to devise customized courses to meet the demands of the EV industry. Overall, the budget aims at strengthening the whole ecosystem of the EV industry, which will spur the demand for green vehicles.
Kiran Mazumdar Shaw, Chairperson, Biocon & Biocon Biologics:
"This budget was great because it spoke the language of new India and looks to the future. Plenty of buzzwords - Drones, blockchain, crypto, green energy, startups. But it was more than just lip service as the FM’s speech relays the government's willingness to work with emerging sectors. Moves like addressing crypto uncertainty, digital rupee, investment in green energy, the committee for startups, limiting surcharge on LTCG are all positive not just for the policies themselves but also for the signal the government is giving us. Focus on infrastructure, the LIC IPO, updating the IBC are continuing themes from last year. We hope to see more executions of these this year. Overall, the budget continued to signal intent and direction for the government which was positive. Negative was the lack of tax cuts or relief for consumers and businesses who have suffered greatly in the last two years."
Ramani Sastri - Chairman & MD, Sterling Developers Pvt. Ltd
Despite the fact that the real estate industry was expecting a number of immediate demand-side pushes for the sector, some significant opportunities were missed. However, the push to infrastructure spending and sops for affordable housing has kept the sector hopeful of positive changes. While affordable housing continued to remain a priority area for the government with few additional reforms, the government could have given a further boost to overall real estate which fuels the Indian economy and supports over 250-allied industries. There is a huge opportunity in real estate that would enable faster economic recovery. The real estate sector has started showing signs of recovery after the pandemic disruption. However, it requires careful support from the government in order to sustain the recently-achieved growth momentum. There are currently several grey areas when it comes to schemes, taxation, funding and others where the government should provide a helping hand going forward. It is imperative for the government to pay special attention to the real estate sector and have provisions for its well-being in the near future.
Deepak Chandnani, Executive Chairman Designate, Worldline South Asia & Middle East
We continue to witness the government's mega push towards digitalisation across all key sectors including health, education, fintech, startup, payments among others in this budget announcement. The proposal to launch Central Bank Digital Currency and introduce 75 Digital Banking Units that will be set up in 75 districts of the country by Scheduled Commercial Banks will bring more users under the digital ambit, especially in the rural pockets. The continuation of financial support announced in the previous budget for digital payments is a big positive as it will continue to deepen the adoption of digital payments across the country and promote the use of economical and user-friendly platforms
It is clear that technology will be a force multiplier in the coming months. And this year’s budget reiterates the government’s strong reliance on Digital for economic growth. The announcement of a Digital University, a National Digital Health Ecosystem, 75 Digital Banking Units, e-passports, and the aspiration to ensure all villages have the same access to digital resources as urban areas indicate a blueprint for IT-driven comprehensive development. The tax exemption for start-ups and the introduction of a digital rupee using blockchain technology provide a stimulus for innovation and highlight the country’s appetite for emerging technologies. I’m confident that this budget will pave the way for a digitally transformed India equipped with all the resources for sustainable development at scale
Shanti Lal Jain, MD & CEO of Indian Bank:
It's a growth-oriented Budget on the backdrop of the pandemic. It is laudable that the focus is centred on Clean Energy, Infrastructure, Agriculture, MSME, Education, Digital Economy, Hospitality, transportation & logistics and increasing capital expenditure for the overall development of the economy. The government's thrust has also been to relieve the supply-side bottlenecks.
The reforms namely the issuance of Digital Rupee, Green bonds, Extension of ECLGS up to Mar’23, increase the allocation in ECLGS and CGTMSE, announcement of 75 digital banking units and 1.5 lakh post offices to be connected to Core Banking for ease of financial transactions especially in the rural and semi-urban areas, are the hallmarks for a healthy financial sector that will accelerate the financing and augmenting credit flow to the economy.
Mostly unchanged direct tax regime has led to stability in the tax environment and gives us confidence that the economy is on the path of recovery. The implementation of the proposed steps and also the reforms will help in raising demand, creating jobs and augmenting India’s economic growth.
Raghvendra Nath, Managing Director – Ladderup Wealth Management Private Limited:
The Budget has rightly focused on the broad agenda for Economic growth rather than unnecessarily tinkering with the structures. The fiscal deficit of 6.9 percent in the revised estimate for the current FY is a tad higher than what was expected but considering that the last twelve months have been extremely challenging for the economy, it is not a big negative. The projected fiscal deficit of 6.4 per cent of GDP gives enough headroom to the government to bolster Economic activity. The highlight of the budget was the announcement to increase the Capital Expenditure by the government to Rs 7.5 lakh crores, a growth of 35% over the previous year. This indicates the government’s intent to act as the prime-driver to support Economic growth. The announcement of launching the digital rupee by the RBI based on blockchain technology is an extremely forward-looking move which should curb the speculations in the cryptocurrency space. On the taxation front, capping the surcharge on capital gains to 15 percent is a good move, especially for unlisted companies and Start-ups. The government is rightly promoting Production Linked Incentive Schemes (PLI) and continues to expand its scope as this scheme is now becoming the key driver of growth in the manufacturing sector. Overall, the budget has been extremely balanced and should support Economic growth in the next year.
Niraj Kumar, Chief Investment Officer, Future Generali India Life Insurance:
Budget 2022 is a ‘Pro-Growth and Capex oriented Budget‘ yet again exemplifying the government’s unflinching resolve to nurture nascent growth and providing the coveted panacea for reeling sectors bruised due to Covid. While these pro-growth measures have entailed slightly higher than anticipated fiscal deficit and higher market borrowing, the government has clearly given more importance to growth at this juncture and has focussed on holistic infrastructure development as a key catalyst to growth. The budget has touched upon the key chords in terms of infrastructure spend, support for micro, MSMEs and hospitality sector in the form of credit guarantee schemes. However, it has indeed missed on the imperative changes on capital gains tax of FPIs on bonds for bond inclusion in global indices and housing impetus and has under-promised on the divestment front and revenue estimates. Overall, the Budget intent and rhetoric is positive from a growth standpoint and will surely help in creating a multiplier impact to boost the overall economic growth trajectory.
Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance:
“The Union Budget 2022 has certainly been growth-oriented with the Government focusing on infrastructure creation in the economy, clean energy, providing impetus to education, healthcare and promoting Make in India in various ways with a firm eye on sustainability. In order to aid infrastructure development, insurers will be able to provide Surety Bonds to reduce indirect cost for suppliers and work-contractors thereby diversifying their options and acting as a substitute for bank guarantee. IRDAI has recently issued a framework for issuing Surety Bonds by insurers. With these Surety bonds I believe, initial project cost will slightly reduce and the overall project viability will improve. Another positive announcement, which will enable increase in reach of insurance is the intent to bring in all post offices within the core banking system. Lastly and more importantly, an open platform for the National Digital Health Ecosystem will be rolled out consisting of digital registries of health providers and health facilities, unique health identity, consent framework, and universal access to health facilities. Insurers too can become a data source in future in terms of knowledge sharing about various health ailments, successful course of treatments, accident information, etc. Hence, this Union Budget will encourage financial inclusion, enable insurers to reach the last mile and also make a difference to the society and economy by contributing towards infrastructure growth.”
Ravi Pathak, Co-founder & CEO, Tatvic Analytics
This is a fixing the foundation theme budget for India, keeping in mind a long-term horizon. Obviously not a populist budget still it promises a lot for almost all sectors. Government looks quite aggressive in infrastructure and capital expenditure spending. Fiscal deficit target looks reasonably acceptable with an expected growth rate of 9.2% for economy. With focus on Productivity, Climate action, Financing Investments & PM Gati Shakti plan, the Union budget 2022 is eyeing the future. Moreover, after the pandemic, the growth estimate of 9.2% seems very promising. 5G spectrum allocation this year and the government's focus on penetrating rural India with broadband will be a major boost to the consumer internet. As Part of the Marketing Technology community, it will provide us more opportunity to understand the consumer behaviour of Bharat for our clients. EoDB 2.0 and the ease of living are also encouraging along with the e-passport, which will help the Indian IT industry which is still focused on foreign markets. While FM has spoken on skill development, we are particularly excited about initiatives to invite foreign universities to set up centres at GIFT city giving impetus to quality talent. An ease in procedures in taxation and reduction in surcharge in LTCG will be of huge motivation for the startup ecosystem.
Dr. Gayatri Kamineni, COO, Kamineni Hospitals
The Union Budget is a progressive one that holds the potential to tackle the economic challenges faced by the country in the post-COVID period. It is heartening to see Finance Minister Nirmala Sitharaman’s focus on sectors like Health, including Digital Health Ecosystem and Mental Health and Wellbeing. The FM’s announcement of the National Digital Health Ecosystem is laudable. The open platform that will consist of digital registries of health providers, health facilities, unique health identity, and universal access to health facilities, will go a long way in providing quality and on-demand healthcare to the country’s people. Realizing the tremendous pressure piled on the minds of the people of India due to the COVID-19 pandemic, the FM’s announcement of the National Tele Mental Health program couldn’t have come at a more opportune time. We welcome the Union Budget for the financial year 2022-23 and look forward to working with the government and all stakeholders to bring quality healthcare to the people of India.
Further, TDS u/s 194S is provided for at 1% on payment for the transfer of virtual digital assets to a resident > Rs 50,000 with certain conditions.
Pranav Goel, CEO of Porter:
The Union Budget 2022-23 announced today has restored the much-needed confidence in the startups and logistics sector in the country. The focus on the PM Gati Shakti Master Plan to fortify the logistics infrastructure with the help of digitization, will benefit young digital startups under this space. With enhancement of this multimodal national plan, the country hopes to ease bureaucracy and create seamless logistics infrastructure. The proposed unification of data exchange among all-mode operators will enable a positive momentum in efficient movement of goods. Furthermore, by laying focus on accelerating the capacity building of EV infrastructure, the announcement of the Battery Swapping Policy for electrifying urban mobility and clean public transport, comes as a welcome sign for companies hoping to move towards an electrified future. By extending the tax incentives to boost the startup ecosystem by one more year, the Union Budget has once again helped startups by providing the support for sustained growth.
Lincoln Bennet Rodrigues, Chairman & Founder, The Bennet and Bernard Company, known for luxury holiday homes.
While the government has not announced any significant policies pertaining to real estate, its commitment towards boosting affordable housing & infrastructure remains intact. Focus on construction of 80 lakh homes in FY23 under the PM Awas Yojna would definitively enable a huge number of home buyers to go in for property purchase. The increase in infra capex outlay works well with ambitious plans to enhance urban planning and capacity-building across several mega-cities which will boost the real estate sector. The government's strong focus on job creation will also enable the growth of residential real estate across the country. However, we believe that the budget could have provided stronger impetus for recovery and growth in the real estate sector. We are hoping for more in the coming days , with many of the key concerns still having not been addressed in the Budget. We are hopeful that recommendations from the real estate sector will be addressed as soon as possible. As the sector is one of the biggest contributors to the nation’s GDP, strengthening the sector will also boost the allied economic activities, thereby bringing a positive turnout to the economy as a whole. To sustain the positive outlook of the real estate sector, we are hopeful that the government will usher in various tax benefits and policies in the near future.
Paavan Nanda, Co-founder, WinZO
We welcome the Finance Minister’s announcement during Budget 2022 to set up an Animation, Visual Effects, Gaming, and Comics (AVGC) task force with the objective of building domestic capacity to serve our markets and global demand. Gaming is a soon-to-be trillion-dollar industry, and it is heartening to see that the Government of India has acknowledged the exponential potential that this sector holds. As a giant step towards contributing to the same, WinZO launched the country’s first-ever national-level scholarship program called B.O.S.S (Battle of Super Scholars) and unveiled a $26M Game Developer's fund with an aim to provide a platform to the best minds to disrupt this emerging global gaming industry. WinZO, as a leading game tech company, will be willing to work with public stakeholders to attract the best talent to this growing industry.
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