Automotive Industry:
Greg Moran, CEO and CoFounder of Zoomcar: “The automobile sector has been through numerous ups and downs in recent years. In this year’s Union Budget, the government must renew its focus on enhancing infrastructure to make the production and usage of EVs and EV-related features, like charging stations, easier. The best alternative and most plausible solution for those seeking eco-friendly and sustainable commute options, apart from EVs, would be to rent cars. The government must encourage people to make sustainable choices when it comes to commuting. Renting an EV would be ideal for a majority of the population that wishes to own a car without the commitment and additional costs. We are hoping for the car rental sector to grow further and this progress is significantly reliant on the budget.”
Health Tech Industry:
Mr Amrit Singh, Co-founder and CRO at Loop: “Covid was a wake-up call for Indian healthcare. India has not yet achieved the goal of spending 2.5% of its GDP on healthcare. 90 percent of healthcare services are privatized making them unaffordable and out of reach for the common man. Providing insurance to all does not solve the access problem. We are anticipating more investment in improving healthcare access to all Indians and making it affordable.”
AgriTech Industry:
Dhruv Sawhney, COO & Business Head, nurture.farm: “More than 50% of the population in India depends on agriculture for their livelihoods. Agriculture is also the 3rd most significant contributor to our GDP and will always attract attention in the union budget.
However, unlike previous years, we are moving into 2023-24 with a cautious & uncertain outlook owing to challenges like a looming recession, the Russia-Ukraine war, threats of climate change, falling export numbers, global inflation in crude, edible oil, and wheat prices. A separate budget allocation to improve crop production efficiency and enhancement of the supply chain can improve benefits to the farmers.
Policies to support Technology Adoption & Digitisation of Agriculture at Scale
Technology interventions, mechanisation, GIS, IoT, AI/ML, Big Data, Blockchain, Drones etc., can act as critical drivers to propel growth, farm efficiency, and improve production efficiency at scale. The government can expand the existing measures like Digital Agriculture Mission (2021-2025) to include these technological interventions that help deliver market & mandi prices, supply chain visibility, food security etc.
Furthermore, the government should support the creation of an open ag ecosystem that acts as a public data library wherein all parties can share & access information & insights around soil wellness, pests & diseases etc to help fasttrack the change. The government can look to promote & open opportunities for PPP (Public Private Partnerships) to improve accessibility and truly bring in digitisation at grassroots level.
Benefits, Incentives & Investments to solve Climate Change
A clear definition of the climate change sector needs to be drafted. Incentives and tax benefits for domestic companies that focus on solving climate change can be offered. Creating a well-regulated voluntary carbon markets framework with policies and incentives that help India meet its Net Zero goals. Policies that encourage farmers to implement sustainable & precision farming practices can be drafted and implemented. Financial benefits & subsidies for the farmers set aside by the government can be routed via agritech companies & organisations promoting sustainability cultivation practices at a grassroot level to propel a shift towards climate smart farming practices at scale.
Solving market linkage challenges
The key objective of introducing the Farmers Produce Trade and Commerce Act 2020 was to facilitate agricultural produce trade outside APMCs. However, measures are yet to be taken to allow trade based on the PAN card outside APMCs. Furthermore, despite the government allocating funds to improve the infrastructure at APMCs for installing testing & drying machines, the availability of these machines could be much higher.
Similarly, increasing the number of APMCs, introducing digital platforms to help farmers sell produce at a fair price, delivering market price information, and regularly offering advisory, financial assistance, and best practices. Setting up marketplaces focused on FPOs can also help drive demand and improve farmers’ price realisations.”
Dr. Deepak Birewar, Chairman & MD, Inventys Research Company – The approaching Budget 2023 marks the arrival of the last full-year budget from the union government, which is expected to usher in favourable legislative policies to help grow the sixth-largest chemical producing country in the world. This year, we expect positive momentum towards formulation of the PLI scheme for the chemical sector to encourage domestic manufacturing. With exports of chemical and petroleum products to more than 175 countries standing at a staggering $8.24 billion, we expect the government to implement export benefits for specialty chemicals to aid the overall economy. Manufacturing business tax exemptions provided by DSIR, under section 35 (2AB) of the IT Act 1961, stands at 100%, compared to the 150% prior to March, 2020. A revision in this tax structure could empower firms to increase R&D expenditure, helping them produce new products and technologies. Additionally, the government can create a Models Specialty Chemical Manufacturing Region in Vidarbha, which could give rise to 3000 MSMEs in the region, with a petrochemical complex acting as a catalyst for industrial growth. Further, the chemical sector is highly capital intensive with long pay back periods. Capital expansion of the chemical sector could be enabled if the government provides subsidies of 10%-20% for investment projects beyond Rs. 100 crore. In the past months, the shift of global supply from China has increased outsourcing opportunities and domestic demand. It has given India more expansion opportunities. By 2025, the Indian chemical industry is expected to reach $300 billion, and focused assistance in export benefits, tax advantages, and capital subsidies will further add thrust to the ongoing growth.
Karthik Jayaraman, Co-Founder and MD, WayCool Foods
1. Tilting the scales on private capital inflows:
The startup ecosystem has grown tremendously in the past few years. However, if one peels the layers, one notices an anomaly. Private capital naturally flows into sectors where big payouts are possible, even if highly risky, or where returns can be captured fast. This has resulted in considerable capital inflows into frothy sectors such as gaming, crypto, stock trading, and the like. Even in relatively deeper sectors such as food, the capital that has flowed into high-speed last-mile delivery is an order of magnitude greater than what has gone into food logistics/supply chain. It has now become critical to ensure that private capital (both domestic and international) flows into sectors of national importance. Private capital needs to be made to work harder and create meaningful assets for the country. Given this, the time has come for the Government to put its thumb on the scale, by incentivising private capital to flow into sectors of national importance such as food and Agri, healthcare, and education, and if required, disincentivising its flow into sin sectors/frothy sectors. There have been requests to rationalise long term capital gains tax by private equity investors. This provides one opportunity for the government to send the right signals – e.g. differentiated LTCG Tax for sectors of national importance vs the others. Direction of India’s infrastructure investment funds to expand their horizons beyond hard infrastructure investments alone, and into technology investments related to the infrastructure sectors e.g. logistics and supply chains, healthtech and edtech, as well as creation of new government vehicles (e.g. sovereign wealth funds, AIFs) directed towards these spaces will be another welcome measure. These, coupled with capital gains tax breaks for such vehicles, will help accelerate equity investments into sectors such as these.
2. Encouraging domestic capital inflows into sectors of national importance:
In addition to the above, it is important to encourage the flow of domestic capital into sectors of national importance. Domestic capital has been relatively risk averse. Given this, incentivising them to place calculated bets on sectors such as these will accelerate development of these sectors, while also providing better returns to investors, and ensuring that the ownership of these assets are more domestic than global. Creative means may be explored for this. For e.g. if the mandatory CSR program for corporates can be modified to treat investments into AIFs focussed on sectors such as food, education and healthcare, as deemed CSR, this will make CSR funds work harder and more efficiently, and also provide the possibility of an upside to company treasuries, rather than being dissolved as a grant.
3. Food as a priority sector:
Food security will become one of the pressing concerns due to the impact of climate. Given this, more investments are needed in the food supply chain, starting from the development of climate resilient seeds, to improving storage and supply chain practices, to reducing food miles to reducing food waste. Today, the Government has declared agriculture as priority sector, and facilitated the enablement of low cost debt finance to this sector. However, given the extent of fragmentation of farms, administering this has proven to be challenging to most lenders. It is time we looked at food, and not just agriculture, as a priority sector. This means that any one involved in the production, trading, processing, storage, transport and retail of food shall be eligible for priority sector lending for the creation of assets as well as for working capital. By enabling the entire value chain, particularly the forward supply chain, access capital at cheaper rates, the government can massively incentivise formalization and introduction of better technology into the sector. This will also be administratively easier for lenders as organised players are easier to work with and secure lending. While considerable subsidies are offered in this space including PLI scheme for food processing, the above decision can enable investments in this sector much more effectively, seamlessly and speedily
4. Making MNREGA work harder:
Today, in many parts of the country, the MNREGA program has created peculiar challenges such as the non-availability of farm labour. Tokenising MNREGA payments and making these tokens available to farmers free or subsidised, and other employers of rural labour (eg. PMGSY) to payout digitally into the jan dhan accounts of labourers based on standard effort units may help acceleration of projects such as rural infrastructure (e.g . water tank cleaning projects by Panchayats), as well as provide agriculture labour at reasonable cost, thus creating deflationary effects.
5. Single window for access to schemes and subsidies:
Today, central and state governments offer a range of schemes and subsidies. However, navigating to these subsidies is non-trivial for companies. A single window portal that enables access to these will help companies take advantage of schemes better, and achieve the objective of these schemes.
Fintech Industry:
Anuj Arora, COO and CoFounder of SahiBandhu:
Virendra Yaduvanshi, Co-Founder & CTO at SahiBandhu: The development of new-age businesses and India’s fast-evolving startup ecosystem are left in great anticipation for the new Budget 2023. Most urgently, we expect the Indian government to introduce tax incentives for the use of new age technology applications like IoT, AI, ML and others to help accelerate the wave of digitalisation prevalent across industries. While we expect direct tax benefits to borrowers of personal loans, indirect tax benefits could be levied for the fintech sector in the form of more ease in doing business. This could help fintech companies transfer these benefits to the end users.
Vijay Malhotra, Co-Founder & Chief Sales Officer at SahiBandhu: The exponential growth of the fintech space in India’s vibrant startup ecosystem comes with a need for revisions, which will be expected from the upcoming Budget 2023. The Indian services 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 grow and perform beyond expectations. Investments under Section 80C, with the current limit of Rs. 1,50,000 needs revision. This could allow taxpayers improve upon their savings, while affecting a significant increase in purchasing power. Further, ESOP holders in Indian startups could gain from 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.
Mr Ashwin Chawwla, Founder & Managing Director, Escrowpay
- Increase in the GST exemption limit for escrow services: The current GST charged @ 18% for escrow services is very high and needs to be removed completely to provide financial relief to small and medium businesses.
- Introduction of tax incentives for businesses relying on escrow services: The government should consider introducing tax incentives for businesses that rely on escrow services. This will encourage more businesses to use escrow services and ensure their transactions are secure.
- Banks and Fintechs alliance: The time taken for escrow services is currently 8-10 weeks by a bank. Fintechs like escrow pay, open digital escrows nearly instantaneously. The government should look into ways to reduce the time taken for escrow services and make them faster and more efficient.
Edutech Industry:
Ms Divya Jain, Co-founder, Seekho: Ed-tech has seen course correction over this past year but has emerged stronger. Especially in higher education and employability, it is the only solution and way forward. We look forward to a lower tax slab for education services to students in particular. Push to implement nep which will allow the youth to learning digitally, work and still earn their degrees
roviding financial assistance (or scholarships) to those who wish to study at the top international universities. The clause should, however, require them to return to India and contribute to its economic development to prevent brain drain.
The recently announced move to set up foreign university campuses in India calls for a rapid expansion of our higher-education infrastructure and enabling an international experiential curriculum. As we try to transform our domestic institutions into world-class institutions, we must build on our research grants, collaboration, and recruitment practices.
Poshak Agrawal, Co-Founder, Athena Education- The government needs to make targeted budgetary allocations and incentivize the sector through existing and new fiscal policies. The government should establish more programs like the National Educational Alliance for Technology (NEAT) initiative, which is explicitly targeted at the K–12 market and allows the tech-education regulator All India Council for Technical Education (AICTE) and dozens of edtech companies to collaborate. The government and education ecosystem may benefit from having EdTech as faithful allies, which will help boost federal spending and expedite learning outcomes.
Moreover, with an increasing pool of Indian students studying abroad, the government can consider providing financial assistance (or scholarships) to those who wish to study at the top international universities. The clause should, however, require them to return to India and contribute to its economic development to prevent brain drain.
The recently announced move to set up foreign university campuses in India calls for a rapid expansion of our higher-education infrastructure and enabling an international experiential curriculum. As we try to transform our domestic institutions into world-class institutions, we must build on our research grants, collaboration, and recruitment practices.
