The Union Budget 2015 that was announced on Saturday by Finance Minister Arun Jaitley has largely been mooted as a positive one by the entrepreneur community in India (with few misses). The government’s support to boost the IT and ITeS sectors in the country, along with a massive fund of SMEs and laying the groundwork for GST do paint a good picture of what’s to be expected.
Further, the highlights of Budget2015 have got to be the government’s initiative to restrict flow of black money in the realty sector, push for cash-less payments and increase in funding towards healthcare.
While it is still to be seen how well the government can implement its new schemes, there is a great deal of positivity when it comes to the agenda of ‘funding the unfunded’ and promoting ease of doing business in India.
Here are a few thoughts from members of India’s entrepreneur community over the latest Budget:
“This has truly been a break-through budget for the PE / VC industry. Tax pass-through for all Category I and Category II funds, and the ability to blend foreign capital in AIFs, will provide significantly greater access to funds for Indian PE / VC industry. This could propel the Indian PE / VC industry from making annual deployment of USD 8-9 Bn to a trajectory of making 3x the current annual deployment (USD 25 – 30 Bn) in the next 3 years. Unlisted companies, who face the most scarcity of Capital, are the primary recipients of VC/PE equity.
Two budget measures that will greatly accelerate the availability of debt capital to unlisted mid-sized companies are: (1) enabling NBFCs (mid-sized) with SARFAESI Act and (2) MSME refinancing mechanism through the Mudra Bank. The first measure gives greater protection to the lending NBFCS, and hence enhances their ability to lend particularly at the growth stages of companies.
These changes come at a time, when India is superbly poised for sustained, high GDP growth. These measure will create a very enabling environment for entrepreneurship and growth, providing ubiquitous equity and debt capital for all capable entrepreneurs – from a push-cart to Flipkart!” – Gopal Srinivasan, Member of Chennai Angels
“Some of good initiatives include abolition of the wealth tax and increase of domestic transfer price from 5 to 20 crore. Additionally, the government’s proposal to decrease corporate tax from 30% to 25% and removing the various exemptions which contribute to multiple tax disputes are some good steps in the direction of making tax administration simple. Increase in service tax is a step towards GST and serves as an indicator of the possible rate of GST which could be a 100 basis points. Creating extensive awareness on social security schemes and making citizens to participate actively is a great initiative. Setting up exchange of trade receivables for MSMEs is remarkable.” – M P Vijay Kumar, Chief Financial Officer, Sify Technologies
“In continuation of the PM Jan Dhan Yojana, we believe that this is an additional positive push to promote cash-less transactions and usage of digital money. The digitization of money at lower level and the JAM trinity (Jandhan, AADHAR and Mobile Access) will redefine and transform the economy to cashless. This will help in further alignment of the mobile wallets, cash in and cash outs and overall the mobile technology.” – Pramod Saxena, Founder & MD, Oxigen Services
“Allocation of INR 70,000 crores to Infrastructure sector, tax-free bonds for projects in rail road and irrigation, revitalising the PPP model for infrastructure development – are just some of the inclusions which will help growth of infrastructure and thereby the realty industry in the country. As seen in the past infrastructure projects have proven to be seeds for the growing realty industry in India as they direct housing and commercial developments towards them.
Another highlight was the government’s commitment towards controlling flow of black money in the country especially in property dealings and promoting cashless transactions. The flow of funds via electronic transactions will have a high impact on the realty industry and would bring the much needed transparency in our industry.
We believe that an increase in the buying capacity of home buyers will help recover the realty industry in India. Even though the industry was expecting some additional tax exemptions for common man, saving of up to INR 4,44,200 in a financial year will definitely motive property buyers.” – Ganesh Vasudevan, CEO Indiaproperty.com
“This welcome move by the FM will provide a boost to electronic payment transactions, Online and also at POS. A similar approach helped Korea to move to almost 60% cashless transactions in retail. This will help the GDP by almost 0.5%-1% over the next few years.” – Amrish Rau, MD, Citrus Pay
“Recognizing the lack of credit facilities as dominant challenge in the sector, allocation of Rs. 20,000 crore for Mudra Bank For SMEs will play a vital role by enabling the SMEs to gain access to basic things such as raw materials and other necessary resources important to run their business. Also, the allocation of Rs. 1,000 crore for technology startups showcases government’s trust in young technology businesses.
Various other measures like GST, Public Procurement Policy, Investment in infrastructure, introduction of internationally competitive Direct Taxes, sharp slash on few indirect taxes, and simplification of tax regime and few more measure announced will certainly result in ease of doing business. With government’s focus on making the youth of India job creators and not job seekers, skill development of youth and special focus on self-employment will have very positive impact on our socio-economic scenario and if implemented in right manner this will have a long term impact.” – R. Narayan, Founder and CEO, Power2SME
The setting up of a 1000 cr start up fund created through SETU entrepreneurial innovative fund is a welcome initiative. While the initiative is commendable, the effective implementation of the same needs to be ensured to make the fund a success. Consolidating startup approvals through ebiz portal by including state approvals would certainly bring down the complexities in setting up business. With more and more states participating in this initiative, this portal would eventually act as a single place window for obtaining regulatory approvals and licenses. If implemented, this would be the single most important development to improve the ease of doing business in India. – Divakar Vijayasarthy, Founder, MeetUrPro
“This is a very bold and forward looking budget. I am glad finance minister has attempted to help country’s SME’s and bring unbanked on banking platform. Schemes like funding unfunded, special fund for startup are good initiatives. I hope this government implements these great initiatives and bring double-digit growth dream back to reality.” – Vijay Shekhar Sharma, Founder – Paytm
“The financial allocation of Rs 1000 cr under the SETU – Self Employment & Talent Utilization program will drastically help boost the start-up ecosystem in India. The additional focus towards the strengthening of the IT infrastructure, the backbone of the Indian start up industry will accelerate the industry growth.” – Shashank ND, Founder & CEO, Practo
“While overall it seems to be pro-development but a lot more could have been done specially to boost the already booming start-up environment in the country. What will be interesting to see over the next couple of years is how well are initiatives like the incubation cell and nayi manzil executed. We have seen in the past that governments have been good at announcing schemes but have hardly been able to execute them well.” – Rohit Chadda, MD and Co-Founder – foodpanda
“A brilliant, well thought budget for all sections of society and businesses. Measures targeted on black money are very bold and long due. My top picks from the budget – electrification of 20,000 villages, digital India initiative to connect villages with technology, introduction of new IITs, IIMs and other premier institutes of higher learning, ensuring a senior secondary school within 5 KMs reach for every child, 1000 Crores budget for promoting technology startups, reduction of tax for royalty fees on technology services, initiatives like Nayi Manzil & Pradhanmantri Vidya Laxmi Scheme to promote education & skill development in India, Reduction of corporate tax by 5% over 4 years.
However, execution and enforcement plan for influx of larger funds in schemes like MNREGA will be interesting to read. As expected, increase in service tax to make way for GST will be hard of Indian pockets. We were expecting a reduction in ROI for Education loans, however, some of it is taken care of with Pradhanmatri Vidya Laxmi Scheme.” – Ashutosh Modi, Executive Director, EntrancePrime.com
“It is good to see a big step from Modi government towards boosting startups. IT indicates very clearly Indian government wants to build healthy environment for startups while is prevailing in US and Singapore.
If we are look at this allocation in details there is lack of clarity how these funds will be allocated, what is the duration for this will be available , what is the procedure to get the funds and what kind of startups are eligible and what is the slab of funding.” – Diwakar Chittora, CEO, Intellipaat.com
“The budget allocation for startups should be used to promote startups in Tier 2 cities and beyond. This can lead to significant generation of quality employment at par with city counterparts for youngsters in these regions. Areas to be focused should be technology, commerce and education/training.” – Sanjoe Jose, CEO, Talview.com
“The increased healthcare budget allocation is step in the right direction but the amount is still far too less to build an effective and credible public healthcare system in India. The good news is that healthcare has started to get the due attention.
The increase in tax exemption limit for health insurance will have significant impact on the penetration of health insurance in the country. This would help corporates to offer a wider range of health packages, and would go further to reduce out-of-pocket health spending.” – Amit Bansal, CEO, HealpingDoc.com
“This time, the Finance Minister has given special attention to the IT and ITes sector. The announcement of Rs 1000 crore for promotion of start-ups is a highly positive move. We feel that the new government has presented a progressive budget, which will help in creating an investor-friendly environment and attract more foreign and domestic investment in the IT sector.” – Raju Vanapala, Founder and CEO, LearnSocial.com
“It is an overall mixed feeling, my expectation on service tax waiver for product startups has not been met, I am tad disappointed here, but the budget looks promising though because there are takeaways for every section of the society, right from super rich to poor.
Corporate tax deduction has revived the positive sentiments in the industry, efforts to cut down red tapism for growing the ease of doing business will create lot of job opportunities. Hike on service tax was a little shocker, which was balanced with introduction of GST from April 2016.” – Sangeeta Banerjee, Director, ApartmentADDA[Image credits: Shutterstock]