Ketan Gaikwad, MD and CEO of Receivable Exchange of India
The government should encourage CPSEs, state PSUs and corporations to participate on TReDS.
In 2017, the government mandated that all CPSEs register on the TReDS because late payments by public and private organizations result in a lack of working capital for MSMEs in their regular business operations. Despite the government’s mandate, there is very little participation on the TReDS platform by CPSEs and PSUs. PSUs should begin transacting on the TReDS platform in order to clear their payments to MSMEs on time, which will help TReDS realize its full potential. At 12.47 percent, the share of CPSEs in total transactions on RXIL is pitifully low.
Suggestive measures to address the issue of Delayed payments to MSMEs.
According to the GAME report, 5.9% of the gross value added in the Indian economy is locked up in delayed payments from buyers to MSME suppliers. Delayed payments from buyers to suppliers is a major contributor to the low resilience of MSMEs in India. Delayed payments occur when buyers delay payables to their Micro & Small Enterprise (MSE) suppliers by 45 days which leads to a working capital crunch.
Reasons for delayed payments
- India’s Goods and Services Tax (GST) and non-performing (NPA classification) regime fail to account for delayed payments, further impacting MSMEs
- Delay in payments by Government Organizations/Public Sector Undertakings (PSUs) to MSMEs.
- One of the fundamental causes is the power of asymmetry between small suppliers and large buyers.
Build a public conversation on delayed payments.
- Leverage platforms such as ‘Mann Ki Baat’ to discuss Delayed Payments which have proven to drive large scale behavioral change campaigns so that we may begin the process of breaking through the normalization of delayed payments.
- Add delayed payments as an indicator within the EoDB 2.0 framework under development by the Department of Promotion of Industry and Internal Trade.
- Mandate that all Miniratnas, Maharatnas, and Navratnas transact on TReDS.
Alok Dubey, Chief Finance Officer, Acer India
“Budget 2023-24 would probably be the most challenging one that Finance Minister Nirmala Sitharaman would be tabling on February 1, 2023. I think that this year’s budget should give digital infrastructure and skills a high priority. Although India may have a positive view of “digital” and technology, more needs to be done to support the country’s digital-first strategy as it aspires to become a USD 5 trillion economy. The government’s commitment to digital skill development and its alignment with the IT Tech sector, and the PLI scheme targeted at helping manufacturers of IT hardware and computer servers need to receive equal weight in this year’s budget. Government policy could be changed to promote the development of talent and skills. The tech industry requires a talented and skilled workforce. The government may provide funding for programmes to modernise educational buildings with state-of-the-art R&D capabilities.”
Shams Tabrej Founder and CEO of Ezeepay
‘The fintech market sector is anticipated to grow at a CAGR of 24.96 per cent to reach Rs 9.2 billion in the next five years. The consistently evolving technology and trends have led to exponential growth in the digitization of payments.
The higher interest rates and the RBI’s raised repo report by 225 basis points, with a probability of further hikes with the intention to control inflation, need immediate fixation in the upcoming budget to ease the financial burden on the lender and debtor.
Substantial tax relief must be offered by addressing the dual taxation issue and providing depreciation on the fixed assets used by fintech companies to save on taxes. Besides, reducing the financial burden that the Employee Stock Ownership Plans (ESOPs) are imposed on start-up employees is the need of the hour for us to contribute significantly to the nation’s economy, and we look forward to it this budget session.’
Rashid Ali MD of Ezeepay
“The fintech sector anticipates more involment and assistance from the government for better partnerships with the banks to support its growth trajectory.
The government should implement policies that would promote collaboration between online and offline lenders to assist customers in getting loans in an accessible manner, whether for personal, business or educational purposes.
We expect the government to implement appropriate regulations to control the fintech sector, eventually providing transparency for digital businesses. And this will subsequently aid fintech entities in regulating finances in future.
With the new-age innovative approach, the fintech financing solutions are also helping students fulfil their educational dreams by enhancing affordability and gradually democratizing education across the country. We hope the government recognizes this increases the 80C exemption on loans, especially for student benefits from tax savings using the entire deduction allowed (Rs 1,50,000) by Section 80C.’
Rajarshi Bhattacharyya, Co-Founder, Chairman and Managing Director, ProcessIT Global
Sekar Udayamurthy, CEO and Co founder, Jidoka Technologies
Globally India has the third highest number of startups after the US and China and for the startup ecosystem to thrive Government should further incentivize employment through the standardization of ESOP treatment.
Kalyan Sivasailam – Co-founder and CEO of 5C Network Pvt. Ltd.
“While the healthcare ecosystem is evolving with multiple players, advanced technologies, and increasing access to information, the Govt of India can become more proactive on the diagnosis front, simply because early diagnosis could prevent serious disease, and therefore avoid the cost of disease which ultimately is borne by the government and the people. Towards this, the government could legislate and regulate the diagnostic ecosystem to optimize the availability of diagnostic intelligence. A central database of all diagnostic centers, modalities, and studies performed in the country is important. The government could enlist the community of vendors and health-tech players to contribute to this data-sharing program. The OPD (or outpatient) insurance, most diagnosis today in India is paid out-of-pocket by patients. This leads to less number of diagnoses than what might be an opportunity to detect illness earlier. It also ensures that the radiodiagnosis market (such as X-ray, CT, or MRI scans) opens up by as much as a factor of ten! In turn, it is good for the healthcare industry. To build a robust and resilient healthcare system, India will need to see increased investment (both public and private) as well as the use of its healthcare system. The health of the nation lies in promoting preventive care. Though diagnosis can significantly lower medical costs by detecting life-threatening health conditions early, the opportunity itself is undervalued.”
Muzammil Riyaz, Founder, EVeium Smart Mobility
“The Indian government has launched policies and measures to incentivise the EV industry, but the same can only be leveraged when a parallel charging infrastructure is developed. While we are encouraging people to opt for EVs through subsidies and incentivization, in the end, only a hassle-free experience can sustain the trust of the consumers. We expect the government to accelerate the same by allocating budgets to ramp up EV architecture that is competent, connected, and sustainable. Moreover, there is an immediate requirement to spread awareness about the auto scrappage policy in order to spur the phasing out of end-of-life vehicles, which can assist steer EV purchases even further.”
Mukesh Taneja, Co founder & CEO, GT Force
“While multiple regulations for the auto industry are anticipated in the upcoming Budget, the central emphasis should however remain on the evolving electric vehicle space, given its potential to decarbonize India’s transportation industry. As the EV sector may witness yet another volatile supply chain disruption if the key markets experience a downturn, so we highly await calculated EV-friendly policies in Budget 2023 that can aid in maintaining the industry’s ongoing solid growth momentum”
Rajesh Saitya, Co founder & COO, GT Force
“A crucial necessity for EV penetration is to facilitate a vast system of charging points; thus, there is also a massive need to mandate the installation of EV charging points in all existing and upcoming housing estates and commercial properties. Moreover, we are optimistic that the FAME II subsidy will be extended well beyond 2024 in order to maintain consumer demand and accelerate EV implementation beyond metro cities.”
Anmol Bohre, Co-founder & Managing Director of Enigma
The proliferation of electric vehicles exemplifies their growing popularity, as indicated by previous sales figures and the visibility of the number of EV vehicles on the roads. What’s more encouraging is that electric two-wheelers are paving the way for the greater adoption of electric vehicles in India. Despite being a large market, the government must prioritise research over sales if India is to become a world leader in this technology. Incentives should be allocated for collaborations with universities to advance the R&D of EV technology.
Recent controversies involving the alleged misappropriation of funds under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) subsidy program, highlight the need for careful consideration of the long-term consequences of such incentives. Therefore it would be beneficial to allocate the FAME subsidies directly to customers’ accounts. As the growth of the EV industry depends on charging infrastructure, designated funds for the development of charging stations along major roads, both national and state is required. In this regard financial provisions to establish solar-powered charging stations in collaboration with the government to achieve zero-emission capabilities for electric vehicles is highly desirable
Abhishek Aggarwal, Co-founder and CEO, Trinity Gaming India
The end of 2022 saw major decisions in the industry, recognition of esports as a core sport, appointment of MeiTY as a nodal ministry for online gaming and policies by the AVGC. These decisions will be vital in the growth of the creator economy and influencers. With the budget right around the corner, we look forward to seeing developments around taxation and regulation of the esports industry. The coming budget and year will be an important one for the industry.
With India being on the cusp of a digital revolution, the AVGC sector is considered to be a powerhouse and contribute to the country’s growth. Due to its immense potential, the previous year’s budget witnessed our Hon’ble finance minister addressing the AVGC as a sector with huge employment opportunities for the youth. With the recent developments regarding the policies and appointment of a nodal ministry we look forward to another annual budget with a positive outcome for the AVGC sector.
Bharat Patel, Chairman and Director, Yudiz Solutions Ltd.
With the speeding technological innovations, the first priority for the center should be establishing a taskforce for cybersecurity and increasing spending in that area. Recognizing the growth of lucrative sectors such as Metaverse, Gaming, and Blockchain we also need to focus on skill development, start with basics, institute infrastructures, and keep exploring the sectors broadly. The AVGC (Animation,Visual Effects, Gaming, Comics) sector should get a tremendous boost as there is huge scope. Our country has the expertise and talent to become proficient with the game development category and publish those games on a global level. The concepts and ideas should be inspired by our mythological stories like Amar chitra katha, Mahabharata, Ramayana, etc. We have talent, concepts, and capability to utilize advanced technologies, just needs a little push from the government bodies to acknowledge it and take necessary decisions.
Since the rise of technologies like Metaverse, Gaming, and Blockchain, people have learned and started investing in associated areas to those technologies interestingly. The AVGC policy introduced by our respected Financial Minister will lay a path for organizations like us to synergize such technologies for providing scalable solutions in Animation, Gaming, AR/VR, and much more. There are around 250 million gamers across the globe, the size of the global animation market has crossed 400 million US dollars, and there are more than 50 million VR and 90 million VR users. All these numbers evidently direct towards the growth of respected sectors and I am delighted to hear our next budget is going to focus on those areas. Establishing a task force clearly hints at how important it is for us to move ahead, utilizing these modern technologies.
Suman Bannerjee, CIO, Hedonova
- India’s domestic consumption story is faltering because of high inflation. I expect tax breaks in terms of higher rebates to stimulate domestic consumption.
- Asset monetization is going to be key. The 5G auction is going to be key to raise cash. The 3700-4200 MHz and 4700-4800 MHz spectrums are available for auction.
- Energy autonomy will mostly be an important theme. India has reduced import duties on heavy-scale batteries and I’m predicting 25000 crores allocated to strengthening the energy grid.
- The PLI (Productivity Linked Incentive) Scheme which promotes manufacturing within India will be extended to MSMEs. Currently it’s for large firms only.
Rahul Misra, Founder Vesta Elder Care.
“If we talk about the GDP in relation to health care, India’s public spending on the sector was 2.1% of GDP in 2021–2022, up from 1.8% in 2020–2021. As a result, the stagnant figure must increase to at least 1.5% this year in order to meet the 2.5% GDP commitment made in the National Health Policy for 2017. Also, in respect of the Union Budget 2022–23, Rs. 86,200.65 crores was allocated to the Ministry of Health and Family Welfare (MoHFW), so the budget allocation to the healthcare sector should be increased by at least 20% this year. This additional fund could be used to upgrade and expand the infrastructure of existing healthcare facilities. Therefore, it will further increase the availability of essential medical equipment and medications and provide better training for doctors and nurses.
India’s healthcare sector has seen rapid growth in terms of both employment and revenue in the last couple of years. Moreover, we do see that the need of the hour is to increase funds towards senior citizen medical aid as older individuals are struggling greatly with the growing ambiguity of old age. There is an urgent need to recognise the need for policies and actions that ensure elderly-friendly living standards. Hence, the Indian government should implement a credit incentive programme and make budgetary provisions to strengthen the home healthcare system for the elderly.”
Gaurav Arora, Co-Founder, Social Panga
“Global markets like Europe have already started showing signs of a recession. The IMF forecasts global growth to slow from 3.2% in 2022 to 2.7% in 2023. This comes after a 6.0% forecast in 2021, making this a cause of concern. However, despite global markets facing substantial challenges, South Asian and Indian markets, in particular, look like they will continue to boom. India overtook the UK to become the fifth-largest economy in the world in 2022 and shows favourable conditions as it strengthens its focus on hyper-local businesses, e-commerce and technology, to lead the way into 2023.
I believe that the government’s financial investment in Indian businesses will extend into 2023 with the Union Budget 2023. This will allow growth to happen locally and expand globally. Regulations in the startup ecosystem will also help this steadily developing sector take a step in the right direction. 2022 was a good year for startups, with companies like XpressBees, LivSpace, Tata 1mg and Darwinbox achieving unicorn status. To take our startups to the next level, a sustainable growth model from the government will be required well into this financial year too.
In my opinion, the fiscal policies this year must also focus on India’s booming growth in the digital infrastructure space. The biggest example of our digital adoption can be found in the form of UPI even in the smallest kirana stores. More financial backing can be expected in the e-commerce and D2C markets in India to ensure its expansion into the rural economy. This, I believe, will be led by the government-driven Open Network for Digital Commerce. Regulations in the way businesses are run, as well as an increase in capital infrastructure in the digital ecosystem, should be a big topic of discussion in the Union Budget 2023.”
Shammi Agarwal, Director, Pansari Group,
“The fast-moving consumer goods (FMCG) sector in India has quite a few expectations. The FMCG sector, currently the fourth-largest in the Indian economy, is expected to increase to $220 billion by 2025. It would be beneficial for the economy and business if we receive more funding allocations and tax incentives from the Indian government, especially since the FMCG category is currently on the road to recovery and saw a 7% increase in FMCG sales last year.
We also anticipate that the government may reduce the cost of packaging supplies, given the packaging contributes roughly 10% of the price of the goods inside. In the meanwhile, I would also urge the government to take action by establishing guidelines and standards for food hygiene and safety in the upcoming budget. Additionally, given that the United Nations has declared 2023 as the “International Year of the Millet,” we expect additional benefits from the government for the export of millet-based goods. We know that export markets are always volatile and the scenario keeps changing due to dollar rates and government policies. In the Union Budget 2023, we hope that the steps taken will ensure that businesses won’t be adversely affected by rapid changes and may conduct their workflow without inconvenience.”
Rajat Jain, co-founder of Pataa Navigations
“Finally, the government should extend the timelines of tax holidays and subsidies for startups, recognizing that it typically takes 5-7 years for a startup to mature. By providing these resources, the government can help startups succeed, creating a positive impact on the economy and society.”
Gaurav VK Singhvi, Co-Founder, We Founder Circle
“In the upcoming Union Budget 2023, I expect to see a reduction in Capital Gain Tax for unlisted investments to help encourage angel investors and VCs to hold on to their investments for longer, providing more stability for the startup ecosystem.
I also hope the government takes the correct measures to promote entrepreneurship and startup growth and support innovation and technology development. Additionally, I hope to see efforts to improve the ease of doing business in India, such as simplifying regulations and providing access to funding for small businesses. Overall, I believe that a budget that prioritizes these areas would benefit the Indian economy and society.”
Sanat Jain, co-founder, Lavna Locks
“we would like the Indian government to make taxation exemptions to ensure the product delivery is cost-effective. This will leverage the expansion of the market for security solutions and also promote them on the global market. Additionally, in order to boost product innovation, strengthen our competitive edge, and expand our global reach, the government should allocate adequate funding for research and development (R&D). This way, the industry will be able to gain a strong foothold in the global market and promote its innovative smart security solutions while retaining a firm concentration on cost-efficiency.
Shalin Gandhi, Managing Director, SUBMARINE PENS
“Even in the high-tech era of computers, smartphones, and e-mails that we live in today, writing instruments continue to retain their value as a crucial communication tool. The writing instrument market is expanding steadily month over month, propelled by aggressive pricing and cutting-edge products.
A GST of 12% would be a good move because manufacturers of pens particularly metal pens are also generating a significant amount of employment prospects as the product is entirely labour-intensive since it is handmade.
Significantly, the tax on pens should be cut from 18% to 5% because schoolchildren and college students use them.
So the government should look at strengthening the ecosystem for writing instrument players with a focus on reduction of taxes. It should emphasize on the measure of ease of doing business and contribute to the long term growth. Supportive policies, simplified regulations, simple GST norms can aid in the development of the sector”.
Tejas Goenka, Managing Director, Tally Solutions Pvt. Ltd.
With majority of the pandemic restrictions lifted and life getting back to normal, all eyes are the forthcoming union budget. Various sectors have high hopes from the budget to an extent that certain frameworks and inclusions will help them in recovering from the impact of the pandemic. Below mentioned sectors are the ones that should be given a considerable importance in the upcoming budget.
- Need of the hour for MSME ecosystem: Accessibility to funding, encouraging adoption of digital payments and incentivizing investments in the MSME sector
MSMEs have and will continue to be an important driver of the growth of our economy, playing an important role in the “Atmanirbhar Bharat” initiative. The budget must focus on improving accessibility to funding, encouraging adoption of digital payments and incentivizing investments in the MSME sector. The main challenge for this sector continues to be accessibility to funding at a reasonable cost as the sector continues to be significantly dependent on informal sources where the interest rates are exorbitant. The Government’s emphasis should be to bring the MSME sector into the formal lending process. On the backdrop of the steady increase in interest rates, an interest subvention scheme would be encouraging for MSMEs. It is also recommended that the threshold for collateral free loans be increased to from Rs 1 Crore to Rs 2 Crores. The act of incentivizing the investments that go into the MSME sector will further drive more investment towards these businesses. Together with schemes focused on employment generation the budget must provide support in the form of grants for skill development. To promote a system of greater trust and ease operations for MSMEs, compliances should be liberalized and simplified.
- Need of the hour for the Software Product Industry: R&D subsidies and clarity about HSN or SAC code in the software business
The Indian software industry has proven its ability to grow, transform and remain resilient even during challenging times. The sectors agility has enabled companies globally to work pretty much seamlessly during the pandemic and recover quickly. The pandemic created an irreversible shift where digital technologies have become an imperative across organizations and governments globally. This represents a unique opportunity for India to further accelerate growth and become the digital talent hub for the world.
In support of this, the Government should consider increasing the threshold of total emoluments for additional employees from Rs 25,000 to Rs 40,000 under Section 80JJAA. This will provide practical significance as majority of entry-level employees in software companies are being hired for monthly emoluments more than the threshold.
Previously an additional deduction was available under income tax for research and development spends but this was subsequently removed. The government should consider either re-introduction of additional deduction under income tax or to provide subsidies to software companies for encouraging new research and development activities. In addition, since software products are treated as goods, it is recommended that withholding tax rates are kept on par with sale of physical goods i.e., 0.1% to avoid blockage of working capital in the form of TDS and for overall development of the industry.
The big dilemma that still exists in the industry about using HSN or SAC code for software products must be addressed as most software products are being delivered virtually. It is imperative that the Government brings in clarity for software products delivered through various forms of virtual delivery.
Anil Somani, Chairman of FOSTIIMA Business School
Siddharth Raman, Deputy CEO of Sportz Interactive
Pradeep Misra, CMD-REPL – Infrastructure
In the Union Budget 2023, the infrastructure sector expects the spending on infrastructure development to go up to 10% of GDP. Increased spending will help in building assets for the future, generate employment, and circulate capital in the economy. Government spending especially in sectors like PMAY needs more aggression, which will benefit the lowest strata of society. Even after the available budget due to red tapism disbursal of the fund needs special focus. The sector also expects the government to ease the norms for raising funds and ensure that loan repayment terms have easier norms.
High GST on raw materials has been the Achilles heel of the sector for a very long time. In this budget, the government should consider the rationalization of GST for the infrastructure sector. All items required for infrastructure building should be charged at 12% only. Traditionally, the government has been the primary source of funds for infrastructure projects. It is high time to change it. Introducing norms to attract private capital in the infrastructure sector would be a welcome step.
Rohit Gajbhiye, CEO and Founder, Financepeer – Education
The fintech financing options assist students in achieving their educational goals by increasing affordability with the new-age inventive approach. As a result, education is increasingly becoming more participatory nationwide. We hope the government acknowledges this and aids fintech companies in financing the aspirations of millions of students. The educational loan threshold for studies overseas should be increased from the present INR 25 lakh to 50 lakhs and for studies in India, it should be increased from the present INR 15 lakh to INR 25 lakh.
If educational institutions meet the requirements of the MSMED Act 2006, we suggest that loans given to educational institutions be eligible to be classified as priority sector advances under micro, small, and medium (services) enterprises. India ranks significantly low among other countries in terms of scientists/researchers per million population. While enrollment in public higher education institutions increased, the budget allocation has remained static. The government needs to allocate more resources in terms of percentage of GDP towards R&D, with at least 3% of GDP. The budget may also consider mandating industry R&D funding to academic institutions so that there is more collaboration between industry and academia and the unutilized potential of academia too is employed for mass benefit.
Manish Gupta, Co-Founder, and CEO, of Rezo.Ai – Startup
The story of India’s emergence as one of the most preferred destinations for start-ups is no less than a fairytale. Start-ups are not only contributing fairly to the national GDP but also employing thousands. The union budget 2023 can help start-ups realize their full potential and push them on the path of exponential growth. The start-up sector expects the budget to ease the norms for starting a business and lessen the compliance burden. Budget 2023 should introduce a single window clearance mechanism for licensing and registration for start-ups. Pushing the GST exemption slot from the current INR 40 lakh to INR 10 crores could act as a booster shot for the start-up sector. A skilled workforce is a prerequisite for an economy aspiring to be a world leader. The budget 2023 should announce sops and incentives for organizations investing in skill development. Tax reform on ESOPs is another area where the government can provide relief to start-ups. It will help start-ups attract and retain the right talent from the market. Most of the most important impact of the start-ups has been serving the underserved. Services like healthcare, hygiene, education, and finance have reached millions of people only due to the efforts of start-ups. In the budget 2023, the government must incentivize the start-ups serving the underserved. This will help them continue with the missions of social entrepreneurship.
Ravi Saxena, Managing Director, Wonderchef – Retail
An earnest prayer would be that the Union Budget proactively supports the unorganized sector through deeper penetration of the skill India program and incentives to unorganized entities, which make up a major part of the value chain of the retail sector. The government also needs to ensure that both digital and physical infrastructure in Tier-2 & tier-3 cities is enhanced similarly so that both conventional and e-commerce businesses find a stronger foundation. India’s consumption story is playing out better than the rest of the world. The retail sector needs a boost to give wings to this story. Increased social infrastructure and overall income growth generation need to be given the top priority. The retail industry is also eagerly looking forward to the fast-tracked actualization of the National Retail Trade Policy.
Anurag Khosla, MD & CEO, Aetna India -Healthcare industry
Making quality healthcare easily accessible and affordable continue to be the Government’s policy and budgetary focus in 2023. The forthcoming Union Budget should reinforce this focus by supporting innovation in healthcare that stimulates the pace of tech-driven growth in the sector. A major priority for this budget is Healthcare delivery to ensure last mile access to quality yet affordable services. In addition to increasing the share of healthcare spend in the overall budget, the Government should incentivize telemedicine adoption at a PHC level to reduce the growingurban-rural divide in accessing quality healthcare. This requires building a harmonious ecosystem that intertwines strengths of both public and the private sectors to ensure affordability & quality of healthcare for EWS as well as the growing middle class in Tier 3 or below cities. An important aspect of improving access to quality care is expanding scope of healthcare financing to cover preventive & primary care services. This will encourage users to adopt healthier lifestyle under professional supervision with the objective of preventing themselves from getting ill or managing a chronic illness, without creating a financial burden. This, in the long run can lead to a healthier population, thus reducing burden on the overall healthcare infra. I firmly believe that India has the potential of becoming the Healthcare Capital of the World by building a robust, well connected phygital healthcare ecosystem that combines the benefit of both physical & digital delivery channels, that is accessible & affordable by every section of the society, anywhere in the country.
Aurko Bhattacharya, Co Founder, ePayLater
With a rapidly growing start-up economy, India is becoming a global leader in digital finance and fintech innovation. In the Union Budget2023, the fintech sector is expected to witness UPI expansion to foreign regions, opening the doors for NRIs by providing them withtransaction facilities. While financial inclusion through digital transformation will be on cards, NBFCs and businesses in small-tier cities will get prioritized. The budget is also expected to ease the burden for start-ups. Liberalization of tax regimes and relaxation inthe ESOP segment would be considered crucial to boost the sector. Lastbut not the least, we hope, regulations will be set up to bring transparency and accountability into the system.
Abhishek Goel, Co-founder and CEO of CACTUS
“As we’ve loosened the pandemic-related constraints, the focus on science and technology to solve the world’s problems is very high. While India spends over Rs. 14,000 crores on science and technology, it is not nearly enough for our scientific aspirations and needs.
We need to see increased allocations to R&D in academia, as well as a clear pathway to the disbursement of grants. We also need to look at a lot more investment in fundamental science – science that may not have application for decades. But it needs to be done today, so that there is a body of research in place for tomorrow’s needs. However, it can’t be all on the government and the taxpayer. There has to be private funding – endowments, grants, scholarships and more. India spends about 0.7% of its GDP on R&D, and that is almost all government spending. In contrast, the US spends 4% and China spends 2.4% – and only 25% of this spending is by the government. The rest of it is from the private sector.
One of the things I would like to see is how we can enable more private investment in R&D – be it fundamental or applied. Can there be a fund for future tech, which we as citizens can contribute towards? How do we innovate in the funding of science and technology? One of the key things I would like to see in the budget is how the government can incentivise business and individuals to invest in tomorrow, today.”
Sabarish Chandrasekaran, Co Founder and CEO, MediSim VR -Healthcare Sector
On the back of the Union Budget 2023. The domestic pharma industry is currently around USD 50 billion in size and aspires to grow to around USD 130 billion by 2030. From simplifying regulations to bringing innovations in the R&D segment, the budget is expected to enhance policy-level changes and introduce measures to promote medical tourism in the country. Higher fund allocation to improve the primary public healthcare facilities and introduction of the digital health ecosystem, we hope, would be the key focus areas in the budget this year. We hope more impetus on technology for expansion of medical care in smaller towns will be given a significant boost.”
Sanket Mehta, Co-founder, Nutrifresh Farm Tech India Pvt Ltd. – Agritech Startup
Since the Hydroponics market in India is flourishing and contributing to shaping the agriculture industry’s future, in the Union Budget 2023, there is a request for the Hydroponics sector to be part of the Horticulture sector and the exceptional Agricultural Infrastructure Fund (AIF) Ministry of Agriculture and Farmers’ Welfare, and consideration on GST Returns. Farm operations require the use of solar motors and electric tractors, which is an expensive affair. The budget we hope can provide subsidies to the soilless farming sector for the use of these machines and motors and promote eco-friendly agriculture operations. MSME Companies are allowed to take credit on Input GST for operational expenses and machinery. These can be set off by goods and services that are later sold in the market. Apart from relaxing taxes and encouraging investments in agri-tech, the agriculture sector is looking forward to having significant allocation in the budget 2023. It will improve crop production and the efficiency of the supply chain, which is likely to benefit farmers in a big way.
Krishna Veer Singh Co-Founder and CEO, Lissun.
Vivek Nath, Head of India, WTW
“The risk and insurance sector in India is now moving from a phase of evolution, since privatization, to a phase of revolution as it aims for ‘Insurance for all’ by 2047’. The industry expects the budget to outline policy measures that move the country in that direction while increasing insurance penetration and safeguarding consumer interest. Some of these measures include the relaxation of the minimum entry capital requirement in order to bring in FDI, cutting edge technology and best practices in a way that safeguards policyholder interest. Considering the medical inflation, the budget should consider reduction of the GST applicable on retail insurance to improve insurance coverage. While there is significant focus on solar and renewable energy, industry in general, is prioritising actions towards a low carbon economy and the budget should outline policy measures that will improve assessment, measurement, mitigation and transfer of climate or climate related risks including via insurance”.
Mandeep Arora, MD & Co-founder, UBON
Last year, there was an increase in electronics prices, especially smartphones, owing to the chip shortage and other COVID-19-induced factors. With duty concessions and domestic manufacturing boost, the prices of electronics slowly decreased and eventually helped boost the demand. This year, the government is expected to make significant progress toward making India a center for producing and exporting electrical devices. Incentify the export of consumer electronics products and a low GST percentage will motivate many Indian consumer electronics manufacturers.
MSMEs play a significant role in the Indian economy – whether it is employment generation or revenue contribution. MSMEs or SMBs requires financial support for setting up and upgradation of the industrial areas. Developing or allocating new industrial zones and improving old infrastructure will motivate MSMEs or SMBs to give a greater output. This will create more employment opportunities and empower our nation with a more skilled workforce.
The Indian manufacturing industry has emerged as a significant contributor to the nation’s GDP, and it is imperative that the government should introduce tax parities amongst different sectors. Introducing a corporate tax bracket of approximately 15% could aid the service industry to grow and perform beyond expectations. Investments under Section 80C, with the current limit of Rs. 1,50,000 needs revision. This could allow taxpayers to improve upon their savings while affecting a significant increase in purchasing power. Further, ESOP holders in Indian startups could gain from the tax being levied on the sale of shares rather than on the exercise of ESOP, which is not the liquidity event for employees of unlisted companies. Thus, if these expectations are addressed and adequately tackled through implementation, it could help the country’s economy grow further.
Kishan Tiwari, Co-Founder and CEO, TSAW Drones
As a drone technology and drone development company a more inclusive environment needs to be created for prototyping, testing and making the product market ready. Since drones share similarities with the aerospace domain, testbeds are expensive and limited, and prototyping is costly and limited, and prototyping is costly affair. Government support in this field would give a great boost to the industry. As a drone logistics provider service, linked incentives will be a boost. And more clarity on beyond visual line of sight operation would promote investment in the industry.
Nitya Sharma, CEO & Co-founder, Simpl
The Indian start-up ecosystem has exponentially grown and is now one of the strongest hubs for startups worldwide. This demonstrates the robust entrepreneurial spirit of the country working toward building the $5 trillion economy with ambitions to raise the country’s GDP by 4% to 5% by 2025. Interestingly, apart from metro cities, tier II and III cities are also witnessing a spurt in demands for jobs by various startups, despite the winter funding. With the introduction of many cutting-edge technologies, the need for manpower with the right acumen to meet business needs has also increased across the country. With numerous ground-breaking initiatives to advance India’s digital transformation, this union budget is expected to be a historic ‘digital budget.’
Every pertinent registration, such as the creation of a company, the opening of a shop, the registration for the goods and services tax (GST), and the issuance of an MSME (micro, small, and medium enterprises) certificate, etc. should be handled through a single window. That will enable startups to cut costs, time, and effort significantly.
In India, the retail and e-commerce segment has gained renewed prominence post-pandemic and has witnessed an accelerated pace of sales and profits in the last year, may it be online businesses or offline stores. The Indian retail market is expected to surge to USD 1.4 trillion by 2030. This would account for a whopping 57% increase as compared to the USD 0.80 trillion in 2020. Much of this expansion can be attributed to government initiatives focused on technology and digitisation, new payment models, and improvements to local logistics infrastructure.
With the upcoming budget, there are certain expectations in terms of changes in policies as well. The retail sector expects the government to implement the National Retail policy, which focuses on ensuring easy and quick access to affordable credit. It would also facilitate modernization and digitization of retail trade by promoting modern technology and superior infrastructural support. Additionally, the retail space would benefit greatly from the implementation of the National e-commerce policy that aims to foster inclusive growth in the digital space and in the e-commerce sector, along with Make in India and Digital India programs.
As the retail market is still in the process of coping with the setback caused by the COVID-19 pandemic, it expects the government to restructure the GST policy so as to incorporate certain relaxations for the retail and e-commerce sector.
Pranav Maheshwari, Co-Founder, StayVista
“Staycations have become one of the biggest holiday trends post-pandemic. Private villa rentals are now the go-to choice for large friends and family groups, looking to take a quick break and with more affluent Indians buying second homes, the category is poised to hit revenues of $1.8 billion in 2023.
Following the two brutal pandemic years, the hospitality and travel industries need support and attention. Therefore this year, in particular, we anticipate provisions and initiatives focusing on homestay villa regulations and tax procedures.”
Ashish Tandon, Founder & CEO, Indusface
Businesses and governments across the world have made a paradigm shift in the way they interact with their customers as well as citizens using digital strategies, aided by cloud infrastructure and AI/ML tools. However, along with the benefits of ‘digitalisation’ i.e. speed, agility, accuracy and convenience also comes the risk of cyber-attacks given that the hackers too have access to these technologies and tools at their disposal. Some recent data breaches, phishing and cyber-attacks include those endured by Twitter, WhatsApp, SHEIN and AIIMS.
According to a recent study released by Indusface, India is one of the most cyber-attack prone countries in the world. Out of the 829 million cyber-attacks detected and blocked by our platform globally in the fourth quarter of 2022, close to 59% were Indian websites.
As a fundamental change takes place in the way software is delivered – from perpetual on-premise licenses to ‘Software as a Service’ (SaaS) from the ‘Cloud’, it is important to leverage these solutions for effective, automated, and AI-powered cybersecurity benefits.
With the Indian government betting big on digitalization and using SaaS as a platform to deliver its services to citizens, there is a need for them to also allocate adequate budgets to integrate these solutions into their own operations. Collaborating with private cybersecurity SaaS companies that have built the required agility and innovative AI-powered solutions can help them yield greater results compared to the conventional approach of procuring and maintaining obsolete infrastructure. The Union Budget is the ideal financial plan that must focus on this urgent need for a cybersecurity revamp in government departments to prevent the recurrence of attacks like the one AIIMS had to endure recently.
Vikas Jain, CIO and Co-founder of Multipl
“We hope the FM offers incentives and tax exemptions to institutional funds and individuals investing in fintech startups that are helping to build positive financial habits of savings and investment. This will incentivize investment in the space. The FM can also think of offering grants/funding to such startups even at the growth stage.
Regulation and more:
We hope the government can universalize the KYC requirements so that an investor has to undergo only one KYC, (possibly CKYC), and multiple KYCs for different financial instruments can be eliminated. This will help reduce the cost burden significantly for fintechs that are working to take good quality investment advice to everyone. We also request the Finance Minister to ease regulations and make investing in mutual funds as simple as investing in Digital Gold. Financial literacy in India is low and so is access to good quality advice. The government can correct this situation by encouraging greater use of technology and reducing the regulatory burden on RIAs(investment advisors).
Rohan Rehani, Co-founder of Moonshine Meadery,
For Alco-bev Industry,
“From the alco-bev industry’s side, because alcohol is a state-per-view matter, the Central budget doesn’t really affect directly however, one thing that I would like to see is since the GST regime was introduced, what’s happened is, alcohol companies don’t get an input credit since we are selling under the wine category and we are buying materials with GST. So that means if I’m buying my bottles and I’m paying 18% GST on the bottles, I can’t charge 18% GST to the end consumer. What that means is, effectively, my cost price of everything has gone up by 18% because I can’t claim the input credit. A welcome change would be to see the government actually take steps towards normalizing alcohol with GST so we don’t have to face the loss of input.”
For Hospitality
“We aren’t actually a part of the hospitality industry per say, but we are associated with hospitality. So these are the things that I have seen people in the market talk about. One of the things is that, I believe there’s gonna be some normalizations of GST, some switching of categories. And one thing I have heard is that hospitality wants the change to happen from 18% to bring it down to 12% to make it more affordable, because the hospitality industry was hit extremely badly during COVID. So the government in the budget can provide some options to help the hospitality industry out, maybe by way of lower tax structure. The reduction in GST from 18 % will also make a big difference, because it will make offerings more affordable for consumers, which means more consumers will come out, eventually benefiting the economy because it will stimulate more purchasing.”
Sneh Jain, Co-founder and Managing Director, The Baker’s Dozen
Last year, the budget was predominantly inclined towards the masses and promoted a lot of serious aspects starting from prioritising mental health to encouraging the start-up ecosystem. One of the initiatives that we sincerely applaud is the National Education Policy, introduction to new courses & online learning. This year, we hope the new policies drive the Government’s agenda on Ease of Doing Business across the country and encouraging new startup brands. We could therefore expect some tax relaxations for start-up brands by simplifying the tax laws. This is also for lower income individuals so that they have more cash in hand if the standard deduction limit is increased.
Akshay Verma, Co-founder, FITPASS
Despite India being the world’s youngest population with an average age of 28 years, 1 in 3 Indians is classified as medically unfit, suffering from a lifestyle disease that could have been easily prevented. We must take action to prevent our young population from becoming unfit as an unhealthy population can pose a great threat to our economy. The awareness and demand for fitness and wellness amongst people are rapidly emerging as a basic necessity. To complement the demands of our young nation and to make fitness affordable and accessible to millions of Indians, we recommend 2 simple initiatives that will not burden the Government exchequer:
1. Admissibility of expenses on fitness by an individual to be allowed as deduction from Income Tax Act, 1961:- It is requested that necessary amendment be made to section 80D of Income Tax Act, 1961 to include expenses on fitness as eligible expenses under this head along with medical and health-related expenses. For salaried employees, a deduction from salary income may be provided on reimbursement of expenses on fitness services, similar to what is allowed for medical expenses.
2. Inclusion of Fitness Centre services in services eligible for composition scheme: – It is requested to now also include fitness center services in the eligibility list of the composition scheme, as has been done for restaurant services. The whole GST is adding to the cost of services of the fitness centers thereby working as a hindrance to the growth of the industry.
Vicky Dodani, founder of Agrizy
“The agriculture industry contributes significantly to the Indian economy; the Indian government is aggressively encouraging as many people as possible involved in this area to incorporate digitalization. The approach to lessen farming’s impact on the environment and the impending economic recession in some areas is to digitize the agricultural sector. Because of this, we anticipate businesses and governments all over the world to increase their technology investments in agriculture, leveraging developments in cloud computing, earth observation, remote sensing, data, and AI/ML models, to help the industry unlock new possibilities and address current agricultural issues. This can greatly increase the production of food, increase profitability, and lower operating expenses, all of which are essential for sustainability. In September 2021, the government launched the Digital Agriculture Mission 2021–2025. As part of this mission, five memorandums of understanding (MoUs) were established, all of which intended to advance digital agriculture initiatives in the nation.
In India, there is a major gap between what the market wants and what farmers produce. This gap needs to be solved to achieve the Government’s declared target of doubling farmer profitability. The agrifood processing industry plays a major role in filling this gap by increasing the shelf life and thereby reducing the wastage. India has a long way to go in this regard. For e.g. only 3% of the total F&V output is actually processed in the country which is much lesser than some of the developed economies. Recent market research assessments predict that the worldwide agritech market will expand between 2020 and 27 at a compound annual growth rate (CAGR) of 12%. Along with the US and China, India is a competitor in this market.”
Nishant Behl, Founder and CEO of Expand My Business
India is poised to become a $25-trillion economy in the next 25 years, and startups will be significant contributors to this growth. However, this will certainly require greater support from the government through newer provisions and policies in the upcoming budget.
Reducing the current 18% GST slab to 5% will increase the ease of doing business and transparency amongst startups, leading to an even robust startup ecosystem in the country. Also, there should be a special incentive for e-commerce businesses to establish warehouses and infrastructure in Tier-2 and Tier-3 identified locations, in a bid to enable seamless operations.
Startups in IT and ITeS sector require greater support, and therefore the government must pertain to the per diem allowance threshold, safe harbour rules, and advance pricing agreements, thereby increasing the ease of doing business. In case of public market cap, startups need equalization of long-term capital gains tax for unlisted shares and public stock investments, which is a long-standing demand.
In addition to this, we are also looking forward to the minimum alternative tax (MAT) for eligible startups be reduced to 9% from 15%. If the minimum alternative tax rate (MAT) for qualified companies is lowered, it can help startups meet their daily working capital needs, especially during nascent stages.
Sandipan Chattopadhyay, CEO & MD – Xelpmoc
India has observed a phenomenal digital transformation over the past few years. Digitisation across sectors has to lead to the innovation of popular concepts such as Metaverse & Web3. The Industrial Metaverse is expected to take the lead because of the widespread digitalisation of big manufacturing centres and the step-by-step enhancing infrastructure, which includes the Industrial Internet of Things and Digital Twin technologies. In reaction to the growth of metaverses and the developing sophistication of virtual simulations used to generate products, the virtual dual era will enhance broader deployment and deeper operations. And, looks like the time is near when production corporations will immerse themselves within the metaverse`s massive potential. Additionally, because it allows for the transferability of digital assets and verifiable claims of ownership, blockchain technology is now anticipated to play a significant part in the development of the metaverse.
Umesh Singh, Director, Tara Candles
Mrinaal Mittal, Director, Blackteak Realty
Pratik Vaidya, MD & CVO, Karma Global, a tech enabled HR & Compliance Organisation
We are expecting that the budget 2023 will shed light on the stakes for foreign businesses in India in terms of the new wages front, incentives for Indian businesses on the international front, and provisions for employers if 50% wages will be required to be given on inclusive elements. The definition of wage and wage code needs detailed clarification. Another important provision that we are anticipating is the budget for foreign investors on locating land, and generating employment and SOPs provided for these foreign employers. We are looking forward to how the budget will balance the minimum wage discrepancy between the highest and lowest states with national floor minimum wages. Provision for employers especially SMEs in the new Gratuity law and provisions in the budget that will tackle the penalty issue will be another area to look forward to. Incentive measures for employers in the budget both with the global economic slowdown as well as the onset of the new labour codes in the future will be among the major focus areas in the budget.
Sandip Chhettri, CEO, TradeIndia.com
India aims to have a $5 trillion economy, be a developed nation by 2047, and be the third-largest economy in the world (currently we are the 5th largest). To achieve all this, India would need its MSME sector to be globally competitive. For this reason, we believe that easy credit and technological adoption should be the keys to making MSME robust. The government of India is striving hard to boost the MSME sector in India with the various schemes and policies it has announced in the recent past. It’s now important for the industry and its players to effectively implement these schemes and leverage their benefits.
There are various emerging loan models like anchor-based supply chain finance, the adoption of PoS terminals, the NBFC segment, and embedded finance, and the entry of FinTechs catering to small businesses will truly assist the MSME in managing their departmental operational finance and ensuring that their daily work flows smoothly. The government should this coming union budget should definitely focus on increased spending on technology infrastructure for the MSME sector so that it makes access to technology easier for MSMEs, making it easier for small businesses to adopt. For MSMEs, digitalisation can act as a catalyst for generating new opportunities for growth. It can help with capturing and retaining a skilled workforce. If India wants to compete globally and become the world’s manufacturer, it needs to help its MSME expedite digitisation to unlock its true potential by leveraging technology in hiring.
Khadim Batti, CEO and Co-founder, Whatfix
“India, as the world’s third largest start-up hub, is poised to see significant shifts in the tech sector with the implementation of AI/ML, widespread use of AR/VR, and improved communication via 5G networks. This is driven by new talent strategies, the evolution of AI tools, and tech companies gaining insights into consumer data usage. We stand at a critical juncture with digital transformation and disruptive technologies enabling individuals as organizations everywhere accelerate their digital transformation and adoption strategies. 2022 saw the start-up industry growing and a total of $24 billion was raised through funding by start-ups across the nation. Currently there are over 88,500 DPIIT recognized start-ups in the country and start-ups in the seed-stage raised $2 Bn, accounting for 41% of total $5 Bn seed funding raised between 2014-2022, according to a PwC India Report. Entrepreneurs across SaaS, fintech, robotics, and deep-tech are betting on budget 2023 to create new industries and find solutions to many challenging problems of today. Specific verticals such as security landscape and HR tech, are expected to grow and could remain the focus areas for the upcoming 2023 budget session as well to tackle the ever evolving threat landscape and also bridge the industry skills gap and talent crunch faced by different industries and verticals.
In light of the recent government allocation of Rs 515 crores for cybersecurity programs for 2022-23, it is expected that investment and spending in enterprise tech and innovation will continue to grow in the coming years as more and more businesses in the country adopt digital technologies and move towards digitization. Organizations expect policies helping/favouring start-ups whose products and services are used by global companies. Furthermore, the expectations from this budget would be to simplify regulations and incentive schemes to aid the start-ups and their stakeholders.”
Ms. Liberatha Peter Kallat, Chairperson and Managing Director, DreamFolks
The global aviation industry has made a remarkable recovery, and the Union Budget 2023 holds the potential to further propel the travel and tourism sector in India. Currently, India ranks at the top among South Asian countries on the Global Travel Development Index and is experiencing a drastic increase in travellers; relaxation of visa rules would further boost inbound tourism. With travellers seeking new and unique destinations, an allocation for the Ministry of Tourism to promote domestic destinations in the country would not only boost the Indian economy but also provide a much-needed boost to the local economy through job creation and reduced pressure from overcrowding. More travellers now seek new experiences, for instance around 21% of the travellers utilize their bank cards to enjoy complimentary Lounge benefits at the airport, which contributes to enhancing their travel experience. Government should align the budget & to keep up with the rising demand for enhanced travel experiences amongst travellers they should allocate budget to establish new airports across the country, the government could support the adoption of sustainable tourism infrastructure and green technologies by providing financial incentives to airport operators and developers to invest in solar power, electric ground transportation, and energy-efficient buildings. They can also introduce measures to reduce airfare and taxes on aviation fuel. While the government has brought many reforms for tourism and the aviation sector, we expect that the air travel tax reductions and exemptions will also help accelerate the industry’s growth thereby further enhancing domestic and international travel
Ms. Midhula Devabhaktuni, Co-founder and CMO of Mivi
“Government has been introducing schemes and reforms that are in favour of Indian manufacturing brands, in the upcoming Union budget government should focus on supporting and further elevating the ‘Made in India’ consumer durable brands that are making innovative technology more accessible. I also feel that during the last fiscal year, the Indian economy has come on the road to recovery and every industry in the country is bracing for changes that will support its growth trajectory. The Union Budget 2023–2024 will be crucial for the consumer electronics sector as it can facilitate the industry’s effective revival. This year, the government is expected to make significant strides toward turning India into a hub for the manufacture and export of electronic devices. With consumer electronics product export incentives and a low GST, we also expect budget reforms to accelerate growth channelled through consumer demand. Hearable technology is expected to receive incentives under consumer device categories as well, given its widespread use, while also encouraging R&D and design in India, and promoting new supply methods. I think it’s time that the budget focused more on value creation, including special incentives and subsidies for consumer electronics and component manufacturing.”
