SME WORLD Bureau
By and large, the India Inc is upbeat about the budget proposals for the 2017-18. Budget is widely hailed for its initiatives to create infrastructure for a cashless economy. Individual tax payers with income upto Rs 5 lac also feel much relieved on the 5% tax relief.
Well Rounded Budget
Manavjeet Singh, Founder & CEO Rubique
We feel the budget is well rounded, covering important cores of the Indian economy, including SMEs, Rural India, Digitalization and the common, middle class citizens of India.
The budget does include certain good news for the start-ups. The increased period for profit linked deduction for three years out of 7 years as against five years is welcome, as start-ups are not expected to make profits for the first few years. The need was for a 10-year period, but extension to 7 years is nevertheless welcome. The exemption from MAT has however, not been allowed, and an enhanced carry over period will not really help start ups from a cash flow perspective.
National housing bank will refinance loans worth Rs 20,000 cr. This is expected to increase Balance transfers especially in affordable housing segment due to strong focus on PMAY. This will also give in impetus to housing sector overall. Double lending target of banks to Rs 2.44 lakh crore. This is primarily to bridge the existing lending gap & we see more capital available for customers especially for MSMEs."
Pankaj Anand, CEO, Jivi Mobiles
We were hoping to get some relaxation in taxes for low end smart phones in lieu of promoting smart devises to the masses which would have enabled them for digital banking and also some packages to support mobile manufacturing in India, on the contrary increase in duty on PCB will certainly increase the prices of mobile phones.
Sanjay Jalona, MD & CEO, L&T Infotech
One key take away from the Union Budget is that technology will continue to play a pivotal role in governance as well as the ecosystem of the nation. Overall, the budget is well balanced and new initiatives such as SWAYAM, imparting education on foreign languages under Skill India, AADHAR enabled payments, augur well in skill development and digitalisation. On direct tax front, extending period of MAT credit, additional favourable measures for start-ups to foster innovation, concessional tax rate for Small and Medium Enterprises, are all welcome moves.
Big Budget on Cleanup
Ravi Saxena, Managing Director, Wonderchef Home Appliances
The Government has put the money where the mouth is. It has taken a huge step towards cleaning up of political funding, has extended the scope of affordable housing for the poor, given massive tax relief to not only entry-level income individual tax payers but also to small and medium enterprises. There are provisions for massive infrastructure investments targeted at employment generation. I am confident that this budget will boost consumer confidence and kick-start the economy that got sluggish over the last three months due to the bold step of demonetization.
Affordable Housing norms have been eased which would definitely boost construction and real estate industry. Everyone in India deserves a proper roof above the head and it is a significant step in that direction. Railway budgets and Defence allocation pass muster.Agriculture and farm sector get the desired support.It is also true that there are no big bang reforms. But after seeing some reckless big bangs over the last one week in a country far west, one feels almost relieved that the way to reforms in India is more sure and steady yet relentless. This is what makes India a stable economy while the world may be crumbling around us. We saw that in the 2008 crisis. We would see that again.
IBF hails Budget 2017 while stressing for extending Infrastructure Status to the Industry
The Indian Broadcasting Foundation (IBF) commends the efforts put by the Finance Minister in presenting a reform oriented budget mainly focused on Rural, Social and Infrastructure sectors and it was certain that it will help in further strengthening the foundations of the Indian economy.
IBF is upbeat and expects that the massive thrust on Infrastructure sector in general, and on the social and rural sector in particular, will go a long way in generating additional income and employment and the same will in-turn provide direct and indirect impetus on the growth of the Broadcasting sector through enhanced spends on advertisement. It also feels that the 5% tax relief provided to the MSME companies is also a step in the right direction.
India is on the threshold of scripting a successful growth story. It is already the world's fastest growing economy. The Union Budget presented by Finance Minister will help in consolidating the benefits of this unfolding economic regime,” said IBF President Punit Goenka, while hailing the Budget proposals and describing it as a transparent instrument for prudent fiscal management. He was also hopeful that some of the specific proposals and concerns raised by the broadcasters in its pre-budget memorandum are addressed soon by FM.
Geetika Dayal, Executive Director, TiE Delhi-NCR
The Budget is in sync with the overall perspective of transforming and energizing India by enabling the startup ecosystem. The various measures proposed for ease of business will deliver the ecosystem a much needed push. The relaxation of continuous holding of 51% of voting rights which will enable startups to carry forward their loses as well as Profit (linked deduction) exemption will draw actual benefits for entrepreneurs against earlier standards that in a way punished startups for being successful. The revised bracket of exemption of 3 out of 7 yrs will draw benefits for entrepreneurs. Corporate Tax rates for companies with turnover less than 50cr. brought down from 30% to 25% is also beneficial. Emphasis on infrastructure, technology and digitization are steps in the right direction. Budget 2017 came amidst much expectation and may not have lived up to all the expectations but it shows positive sentiment to encourage entrepreneurship.
Ajay Kolla, Founder & CEO, Wisdomjobs.com.
It is really encouraging to see a budget that is focused on driving benefits for the country's workforce in the long-term. I feel the focus on developing a skill-ready workforce will be key to generating more job opportunities in the future.
The allocation of funds for skill development and extension of the Skill India mission to 600 districts and 100 India International Skills Centres will ensure that talent is tapped from Tier 2, 3 and 4 cities as well. Also, the abolishing of FIPB and easing of FDI is likely to bring in more investments into the country, and lead to an increase in jobs.
Gautam Sinha,CEO of Times Internet
Post the demonetization move in November 2016, the Union Government has laid emphasis on building up infrastructure to foster sustainable digital economy in India. The Union Budget of 2017 is yet another step towards cashless economy in the country. It highlighted the need of concrete steps to boost digital economy in India and announced the government's plan to promote adoption of cashless methods with proper security measures in financial transactions and an effective grievance handling system for consumers.
This is a great move by the government towards transforming India and would be a significant opportunity for entrepreneurs & startups focusing in the FinTech sector. With the government's support, better infrastructure and security measures in online transactions, 2017 would definitely be a remarkable year for FinTech ventures both in Tier I as well as semi-urban/rural areas
Santosh Naik, M.D & C.E.O, Disha Direct
Overall the budget is a good budget in general but mixed for real estate industry which was looking for more from this budget. The Government's initiatives like- Infrastructure status for Affordable Housing, 1 crore rural houses to be built by 2019, Carpet area will be considered Instead of Built up area of 30 and 60 sq meters for affordable housing will give a huge boost to the affordable housing sector.
Schemes like- Holding period for capital gains tax for immovable property reduced from 3 years to 2 years will get investment from retail investors further adding to the development of this sector. Few policies undertaken by the government will give required boost in terms of sales and development. Some of these policies include- New FDI policy under consideration, Rs 2.41 lakh crore has been allocated to boosting infrastructure for transportation, Total allocation for the infrastructure sector is Rs 3,96,135 crore and Allocation for National Highways to be at Rs 64,000 Crore.Vinamra Pandiya, CEO and Founder, Qtrove.comThe overall budget seems to be another big step towards a digital India and it is rightly so! A strong weightage for digital payments is principally good in the long run for the e-commerce sector. Tax reliefs to SMEs and revised tax slabs for individuals will surely promote more investment thus helping the economy grow. Policy changes with regards to ease of FDI are extremely encouraging and we are now looking forward to the suggestion made by the expert panel for the implementation of GST.
Mahesh Gupta, Chairman, KENT RO Systems Ltd. & Former President, PHD Chambers of Commerce,
The overall budget is very encouraging for the industry. The steps announced by Finance Minister would help the industry to remain on growth track especially the MSME and SME sector.
?We earnestly encourage the announcement ?of slashing down the custom duty on membrane which ?is an ?essential part of a water purifier ?. This move would definitely help domestic manufacturer?s like us?, However, ?it will not only revive sagging customer demand, it will also uplift business sentiments.
Arjuun Bajaj, CEO and Founder, Daiwa
We thank the Indian government for including such incentives in the Union Budget. The announcement of INR 745 Cr for electronic manufacturing in the country is further going to attract global innovators to make India as a hub for manufacturing tech and electronic products. The same, in addition to the GST Bill, meant at streamlining taxes and costs, is surely going to boost up the morale of the electronic manufacturing industries.
However, the problem still does not get solved as we continue to import the material used in the manufacturing from neighboring countries, such as China. The government must focus on bringing in the manufacturers of raw materials i.e. different types of components, parts, open cell etc. in order to truly achieve the dream of MAKE in INDIA.
Rajesh Aggarwal, MD, Insecticides (India) Limited
The union budget 2017 has put substantial focus on agriculture sector which is a really welcome move. The total allocation for rural, agricultural and allied sectors is set at Rs 187223 crore, which is 24% higher than last year's. This is heartening. The government said it is committed to double farmers' incomes in 5 years. The Finance Minister has announced certain measures to incentivize farming for instance reducing the interest rate on farm loans. This was much needed to make up for the losses the agriculture sector has suffered in the wake of demonetization.
The government has increased the Fasal Bima Yojana from 30 to 40 per cent and has also promised to issue soil health cards and setup a mini lab in Krishi Vigyan Kendras. These are welcome moves. But implementation will be more important than announcement. The decision to set up a dedicated micro-irrigation fund with an initial corpus of Rs 5000 crore could make a difference in a country where much of agriculture depends on the vagaries of the seasonal monsoon rain.
Vivek Khandelwal, Vice President, Delta ID
We welcome the duty exemptions on iris enabled PoS devices, and are truly excited about the strong emphasis the government has placed on Aadhaar enabled payment initiatives. With all the foundations with respect to standards, certifications, and availability of devices, already in place, this impetus will further accelerate the adoption and integration of Aadhaar in programs and processes that touch the everyday lives of the people of India.
Atul Rai, CEO and Co-founder, Staqu
The Union Budget 2017 doesn't provide any direct benefits to startups this year. Besides, the tax exemptions from capital gain are rather difficult to meet, at least in the early stage of 3-5 years for a startup. However, the newly announced exemptions for income tax of common people and well-rounded push towards digital payments will ultimately increase the buying capacity, along with mobile phone utility. These institutional changes, I believe, will push towards the growth of new age digital startups, albeit indirectly
Vijay Shekhar Sharma, Founder & CEO – Paytm
It is a digital economy budget. Government has pushed the digital theme in every area of the budget. Every person from a small shops to consumers are pushed towards the digital economy. Tax benefits, incentives to use digital payments and extending loans based on a digital footprint will create a larger merchant ecosystem for digital payments. Incentives for labour intensive sectors including housing, farming and dairy will help SMEs to create new jobs. Focus and attention to bank NPAs, as well as increasing bank capitalisation is great step towards strengthening the financial system of the country. Finally, the income tax rate changes will encourage more people to report their incomes and create a larger tax net for the country. Overall, it is a great budget that will encourage people to move to the formal economy and derive benefits.
Sudarshan Motwani, CEO, BookMyForex
The only one thing that will impact fx market is the clarity by Finance Minister that there will be no tax on long term capital gains. This will stop the flows by FIIs and hence will cool the USD-INR rates. However, there can be capital outflows due to debt market with interest rates coming down in India and the expectation that those will firm up in US
USD - INR pair that is tat is trading at 67.61 down from highs of 68.25 just a few days back should stabilize between 67.7 to 68.2 range.
Rajeev Dimri, Leader, Indirect Tax, BMR & Associates LLP
No major indirect tax related announcements are in line with the general expectation as the nation is on the verge of transitioning to GST. Keeping the service tax rate unchanged and withdrawal of R&D cess are welcome and pragmatic decisions at this juncture for boosting economic growth of the country. R&D cess withdrawal in particular will encourage import of technology and compliments the Make-in-India campaign.
Reassurance that the government is up to speed on GST implementation work (including IT preparedness) is good news. Also, commitment to initiate GST awareness / orientation for businesses starting next fiscal, reaffirms the collaborative and inclusive approach of the Government to effectively implement GST.
Alok Mittal, An active angel investor & Co-founder, Indifi Technologies:
The enhancement in PM Mudra Yojna and the rebate on corporate tax for MSMEs are welcome measures, which will help drive growth in the segment. Announcements of schemes on cash-back for merchants to promote digital transactions and Aadhar based POS will help MSMEs create a transaction trail that starts to improve their creditworthiness.
Vidushi Daga, Founder and Director of Clone Futura Education
Although the focus on skill development and implementation of quality education parameters by introducing the practise of measuring annual learning outcome in schools is a very good move by the government, but the main concern is that the entire focus was only on higher education. The base of having a systematic and future oriented education system can only be implemented by building a good platform for teachers to learn. Next is if the primary education system is not moulded, then eventually it is going to affect the higher education sector as well. There should have been focus on how digital education can be provided to the primary school students and teachers by providing some special counselling/awareness about cyber safety, latest trends in technology and education modules etc. All in all the budget does look promising when it comes to rural development, higher education and tax benefits but there could have been a better focus on the overall education sector.
Varun Rathi, COO & CO-founder of Happay
This budget is meritorious & stands to benefit all. The government is working more like a startup & is quick to introduce incentives & continual iterations to ensure mass adoption, much needed for the large population sitting on the fence. On one hand, 5% tax rebate for SMEs is a great incentive, limiting cash transactions to 3 lacs is a strategic move. It will not affect the regular transactions.
Priti Shah, CEO of Paynear Solutions
According to the budget, 20 Lakh POS machines will be deployed this year. This is a great move and encouragement to fintech companies to play a big role in the eco system to digitise India. Paynear is keen in having decent market share and plans to deploy more than 1.5 lac devices this financial year.
Sameer Grover, Founder and CEO Crownit
Overall the budget is pro-entrepreneurs which will help create jobs in India, hire skilled talent at low cost and also improve industry output. Two specific highlights of the budget which particularly enthuse me are i) easing of tax for India based funds and FDI/FIPB changes- this will give a big boost to early stage start-ups and ii) tax exemption for startups, now that's a big support to the Indian start-ups.
Siddharth Chaturvedi, Director, AISECT
I hail the Government's decision of opening 100 international skill centres. Work is already in progress to map India skills sector to international skills sector. For example, there is already equivalence in skills in India and the UK. These 100 international skills centres will go a long way towards providing skilled manpower for the international skills market. Most candidates who go overseas do so without a skills certificate. The launch of these centres will be a good step to make sure that all the labour going out of the country will be certified labour.
As far as the provisions that the Government has made for rural India are concerned, I think it is high time for the Government to focus on rural India as most of our country's population lives there. The fundamental infrastructural changes related to road, housing and electricity in rural areas proposed in the Union Budget, will go a long way to improve the quality of life in rural India. Moreover, the Government's focus on quality skills in rural India will help rural areas break away the employability barrier that currently exists because of lack of quality skills-based education in those areas.
To read more, please subscribe our Printed Magazine