For the past two years, the pandemic has gripped the world, brought about a slowing of economies, and also exposed wide gaps in the healthcare sector for many countries including India.But unlike other nations, the Indian government took swift steps to address these issues by introducing multiple policies & reforms that have also aided the economy.It is also ensuring that the goal of being a US$ 5 trillion economy by 2025 is met by introducing many reforms with Aatma Nirbhar Bharat & Production Linked Incentive Scheme (PLI) being the central pillars of these reforms.
While there have been numerous policies & reforms being floated by the government, which will help the Indian economy pace up, there’s still a lot to be addressed to make the dream come true.
Here are my expectations from this budget, not only from a corporate perspective but from an employee’s too.
Production Linked Incentive Scheme
Production Linked Incentive Scheme has spurred growth in the manufacturing segment, with both domestic & international companies setting up industries in India to make the best of the scheme which is not only helping in job creation but also brings in infrastructural changes as well.
Furthermore, the next wave of startups & entrepreneurs will come from this set of the skilled workforce.However, PLI currently covers only a handful of industries and the best way to make the most out of this reform is to cover more industries under PLI’s umbrella, which will provide the necessary push required in the manufacturing segment.
R&D Incentives
The world is currently going through a paradigm shift in the field of automobiles, life sciences, telecommunication & technology and if India has to play a major role during this phase, then investments in R&D are mandatory.While corporates keep aside a budget for R&D, however, if R&D linked Incentives are provided to the corporates, it will result in an increase in spending on R&D, which will result in next-gen technologies coming out of India, which truly goes with the spirit of Make in India, for the World.
Electronic Vehicles are the best example of this theory, the way e-vehicles are disrupting the traditional automotive market and while they are growing in India, R&D incentives will ensure that the next Tesla comes from India.
GST Slabs
Most of the industries have suffered badly over the last couple of years of the pandemic, but the biggest effect was on the semi-luxury and luxury segment, which comes under 12-28 per cent GST rates, and while a lot is being done for the mandatory & basic segment, we need to address the other industries as well.So lowering the GST slabs will give the boost they are in dire need of.
Talking about new media & digital businesses like edtech, adtech, fintech, OTT, crypto currencies, foodtech etc., they played a central role in the lives of everyone during the past couple of years.
They made the lockdown life not only bearable but created numerous jobs, generated billions of dollars which helped the economy during the difficult times and also created multiple unicorns on the way.
These new businesses are going to create the India of the Future, which will be self-dependent, self-resilient and will change the world’s perspective towards India from a back office to a global innovation hub.
Having said that, while the Indian government has taken multiple measures to boost innovation, new-age businesses & startups, there are still a few leakages to be looked at.
Edtech
Edtech business ensured that education reaches the doorstep of the masses especially during the lockdown phase, and is still an important medium of education, but being taxed under 18 per cent GST slab, makes it comparably pricey for the middle class.
To ensure that quality education reaches to the masses including Tier-II and III cities, cutting down the GST slab to 5 per cent is mandatory.
Cryptocurrencies
Over 100 million people have invested more than US$ 10 billion in cryptocurrencies till now, and still, there’s a lack of clarity on the taxation & regulation around it.Globally, countries are understanding the power of cryptocurrencies.So, pushing a blanket ban on them by India will only lead to the creation of a parallel economy which can haunt us in the longer run.
The need of the hour is to regulate them & tax them, which will both save the small investors, and will help push funds into our economy.
Adtech
Advertisement technology has been the central pillar of marketing & advertising over the past few years, with brands spending more money on digital advertising than traditional methods of advertising, as it is more conclusive, effective & measurable.But still, this space is filled with big brands & digital businesses, with traditional businesses not able to utilise their power, owing to the higher initial costs.So tax cuts & incentives will help this industry to cater their services to SMEs & traditional businesses to compete shoulder-to-shoulder with the bigger brands.
Further, when I talked to my employees about their expectations with the upcoming budget, other than the usual tax cuts like pushing the minimum slab from Rs 2.5 lakh to Rs 5 lakh, 20 per cent slab to Rs 20 lakh and higher deductions under Section 80C; many employees are also looking for Work from Home allowances and tax reliefs around that.Working from home has added to the costs like setting up a home office, better internet & inflated telephony costs, so a tax relief of Rs 50,000 is needed.
This year is very important in modern India’s history, not only because the Indian economy is recovering from the pandemic and needs a strong push to restart, but also to set the goals, milestones and pave the way forward for the 5 trillion economy size target.
.
