Industry captains present their Wish lists for Nirmala Sitharaman
Umesh Revankar, Executive Vice Chairman at Shriram Finance Limited: We are very confident that the government will continue to focus on infrastructure, as they aim to make manufacturing in India more affordable and globally competitive. Logistics play a crucial role in this, and improvements in logistics are likely to provide India with a significant advantage on the international stage. Consequently, the government is expected to continue investing in infrastructure.
Additionally, this time, the government will likely focus on rural infrastructure, as it enhances the rural market’s access to urban areas, leading to better economic realization for the rural economy. The combined focus on both urban and rural infrastructure is expected to drive better growth. A rapidly growing rural market will offer better economies of scale for rural manufacturing and agriculture, while the urban industrial and manufacturing sectors will gain greater opportunities in the international market. Hence, we anticipate that the government will maintain its focus on these two areas.
Shachindra Nath, Founder & MD, UGRO Capital Limited: The MSME sector is a cornerstone of India’s economic growth, marked by increased contributions and high optimism for progress. The surge in registrations on the UDYAM portal for credit and policy benefits underscores this momentum. However, the evolving business dynamics necessitate close monitoring of emerging risks. The sector’s low risk and falling delinquency rates are enhancing borrowing prospects, with NBFCs showing consistent credit growth, especially post-Covid.
We urge the Union Budget to address specific challenges faced by NBFCs to foster a more inclusive and resilient financial ecosystem for MSMEs. One key recommendation is the creation of a new category of NBFCs dedicated to Priority Sector Lending (PSL), termed NBFC-PSL, focusing 85% of their AUM on the priority sector. Additionally, loans from banks to NBFCs for onward lending to MSMEs should be considered PSL loans, removing the current cap limits.
We also recommend reintroducing the Partial Credit Guarantee Scheme (PCGS) for NBFC-MSMEs, providing a portfolio guarantee for the purchase of Bonds or Commercial Papers with a rating of AA or below issued by NBFC-MSMEs, by public sector banks. This will facilitate greater funding to small and medium NBFCs. Expanding this scheme to include term loans from banks and financial institutions will further support the sector. Moreover, harmonizing the SARFAESI Act limit by reducing the cap for loans eligible under this act from INR 20 Lakhs to INR 1 Lakh for NBFCs, similar to banks, will enhance recovery processes for smaller loan defaults. This will improve financial health and boost confidence among lenders and investors.”
Nirav Choksi, CEO and Co-Founder of CredAble: We believe India’s forthcoming Union Budget will prioritise sustaining growth over the medium term, encouraging capital investments, and achieving fiscal consolidation.
India’s journey to become a US$5 trillion economy will be marked by digital advancements, a resilient MSME sector, and a thriving trade ecosystem.
Proactive trade agreements coupled with extensions of the concessional corporate tax rate for new manufacturing units are expected to attract investments, unlock new market opportunities, and empower businesses to navigate global challenges.
Strategic reforms to address tax challenges, ensure the ease of paying taxes, and improve the overall compliance framework are essential for fostering a conducive business environment for startups in the country.
We look forward to measures that support responsible innovation in financial services, foster partnerships, enhance the digital lending ecosystem, and catalyze innovation in the FinTech sector to deepen last-mile financial inclusion.
Overall, we are optimistic about transformative reforms like improved credit access, clarity regarding the 45-day payment rule for MSMEs, and lower interest rates, which will in turn enhance the competitiveness of MSMEs on a global scale and significantly contribute to India’s trajectory towards becoming an economic superpower.”
Vineet Agrawal, co-founder of Jiraaf: A robust capital debt market is indispensable to realize India’s ambitious goal of achieving a $5 trillion economy, with retail investors playing a pivotal role in its realization. Currently, their participation stands below 4%, making it imperative to increase this figure fivefold over the next five years. Several measures can bolster this objective. First, eliminating TDS at source on bond repayments would encourage investment by reducing procedural hurdles. Second, extending taxation benefits akin to equity investments—such as inclusion in the 80C deduction limit, tax-free interest income up to a specified threshold, and lower LTCG taxation rates—would incentivize greater participation. Third, facilitating easier digital access to corporate and government securities would democratize investment opportunities, attracting a broader base of retail investors. Lastly, fostering a vibrant buy-and-sell market to enhance liquidity will further bolster confidence and attractiveness in debt instruments. Together, these initiatives can pave the way for a more inclusive and dynamic debt market, crucial for India’s economic growth aspirations.”
Vikas Singh – Chief Collection Officer, Propelld: Our focus remains steadfast on advancing co-lending partnerships, harnessing fintech innovations, and promoting inclusive access to education loans. These pillars are pivotal in fostering a resilient and digitally empowered financial ecosystem. Hence our expectation from the Union Budget 2024 is for a strategic roadmap and implementation plan that fosters collaborative efforts from all players within the fintech segment.
Rohit Pateria, Co-Founder & Ceo, Lark Finserv: As a strong believer in India’s economic growth potential, I urge the government to consider the following measures:
Easing of Angel Tax Provisions: The current Angel Tax regulations create unnecessary hurdles for startups seeking early-stage funding. I propose a revision of these provisions to encourage more angel investment and foster a vibrant startup ecosystem.
Increased Capital Allocation for Fintech with a Fund-of-Funds Structure: The Fintech sector holds immense promise for financial inclusion and innovation. A dedicated fund-of-funds structure within the budget, specifically for Fintech, would provide crucial capital for promising startups and accelerate their growth.
Tax Holidays and Incentives for Startups: Startups face significant financial challenges in their initial stages. Introducing tax holidays and targeted incentives would alleviate this burden and allow them to focus on core business development and innovation.
By implementing these measures, the government can create a more supportive environment for startups and Fintech companies. This will ultimately lead to job creation, economic growth, and a more robust and innovative Indian economy.
Rishi Agarwal, Co-founder and CEO of TeamLease RegTech: The 2024 Union Budget will shape the next 5 years and lay down the groundwork for our $10 trillion GDP goal. Taking things forward from 2023, we can expect ease of compliance to stay on top of the finance minister’s priorities. Emerging areas, including the gig workers and AI will be on the agenda. In her previous budget speech, the Finance Minister alluded to leveraging PAN as a common business identifier and the introduction of Entity DigiLocker, propelling EoDB. I expect to see more announcements about its implementation. These reforms will lay down the plumbing for Digital Public Infrastructure (DPI) for corporates in the long run. We also saw the successful passage of the Jan Vishwas Act through the legislative process last year. This points towards the positive intent of the government to remove the entrenched hostility and deep-rooted criminality within the business regulatory framework. Now, I expect further action at the union and state levels toward decriminalising India’s employer compliance ecosystem. There also needs to be an enhanced focus on renewable energy infrastructure, infrastructure development, and domestic manufacturing. In the first year of its third term, the government has an incredible opportunity to lay the agenda by signaling regulatory reform for economic development and job creation.
Winny Patro, CEO and Co-Founder, Recordent India: In the age of data and technology solving many problems for businesses, MSMEs are still struggling with delayed payments and are caught up in a vicious cycle of cash flow problems. An SME entrepreneur spends more time dealing with late payments than growing his business. Introduction of section 43B(H) had an impact around the end of financial year 2024 closing and will again only impact late payers during FY closings. Access to working capital and MSMEs samadhan filing, addresses the cash flow at the fag end of the problem. There is a need to address the problem holistically like how the banking industry got better with timely payments due to credit bureaus. MSME data stack could be one of the solutions to reduce credit risk and avoid late payments. In addition to this, benchmarking payment terms based on sectors and nature of products/services could be another solution. Hoping that the upcoming budget gives importance to solve this massive problem of ₹10 lakh+ crore late payments stuck in the MSME sector in India”.
Vinod Sood, MD, Hughes Systique Corporation : The upcoming Budget 2024 holds immense promise for companies specializing in full-cycle engineering for products and R&D services, encompassing programming, testing, verification, technical support, design, and technology consultancy. The industry anticipates increased funding for R&D projects through larger grants and tax breaks, which could spur significant technical innovation. A reduction in the corporation tax rate would also be highly beneficial, fostering a more favorable environment for investment and expansion, particularly for startups and IT enterprises.
Industry leaders are enthusiastic about advancements in digital infrastructure, such as the introduction of 5G and enhanced internet connectivity. These improvements are expected to boost productivity and enable companies to offer cutting-edge solutions to their clients. Policies supporting collaboration between businesses and academia could further accelerate the development of new products and technologies.
In summary, the Budget for 2024 can significantly impact the product design and R&D sectors by providing financial incentives, enhancing infrastructure, and encouraging innovation. These measures will not only benefit tech businesses but also drive the overall growth of the Indian IT sector. Notably, the government has reiterated its commitment to launching the Rs 10,000 crore IndiaAI Mission within the next two to three months, laying a solid foundation for future technological advancements. The government’s active efforts to establish this mission underscore its dedication to positioning India as a global leader in AI and technology.
Anindith Reddy, Managing Director, Enliva: India’s examination and disposable gloves market, poised to reach $760 million by 2025 vis-a-vis the global market size of $15 billion, presents a substantial opportunity to bolster the nation’s manufacturing prowess. Realizing the potential of the ‘Make-in-India’ initiative demands a paradigm shift in policy. By streamlining regulations, providing targeted incentives, and implementing a robust quality control framework, India can not only meet domestic demand but also emerge as a global leader in disposable glove production. There is a need for a Quality Control Order, introduction of minimum import price to counter dumping, reduction on utility costs to optimise production costs and introduction of performance linked incentives for the sector’s growth and competitiveness”
Ishaan Dodhiwala, Co-founder, MediJourn: “India’s medical tourism sector, a burgeoning industry valued at $9 billion, possesses immense potential to emerge as a global leader. While our world-class healthcare infrastructure and reputation for affordable, high-quality treatments provide a strong foundation, strategic interventions are crucial to fully harness this opportunity.
To propel India to the forefront of medical tourism, we advocate for a comprehensive approach. The upcoming budget should prioritize targeted financial incentives to stimulate growth. Additionally, streamlining visa processes and enhancing flight connectivity through attracting international airlines and incentivizing them with reduced fees will significantly boost patient influx. A global campaign on the lines of ‘Incredible India’ focused on ‘Heal in India’ is imperative to cultivate a strong international brand image.
Furthermore, organizing Indian Expos in key global markets will create platforms to showcase our medical capabilities. By fostering public-private partnerships and integrating alternative healthcare systems, we can elevate patient experiences and solidify India’s position as a holistic wellness destination.
Dr. Miniya Chatterji, Founding Director, Anant School for Climate Action, and CEO, Sustain Labs Paris: In the Union Budget 2024, it would be important to prioritize initiatives that drive sustainable growth. Investments should focus on renewable energy projects, green infrastructure, and sustainable agriculture. Another good move could be a reduction in the GST levied on renewable energy components. Additionally, provisions should be made to promote skilling and innovation in the field of sustainability”.
Sanjay Borkar, CEO & Co Founder, FarmERP: In the upcoming Union Budget, the Agritech industry holds high expectations for significant advancements in new-age technologies and the integration of sustainability within agriculture. Enhanced funding for technology adoption is critical, with increased investments in AI, machine learning, and blockchain needed to revolutionize farming practices, enhance productivity, and ensure sustainable growth. Tax incentives and subsidies for Agritech startups will accelerate innovation and attract young entrepreneurs to the sector.
Establishing additional research and development centers focused on agricultural technology will foster innovations and provide practical solutions for farmers and agribusinesses.
The industry also urges the government to enhance digital infrastructure in rural areas, recognizing reliable internet connectivity as crucial for farmers to access modern agricultural tools and platforms. Introducing policies that promote sustainable farming practices and climate-resilient technologies is imperative for achieving long-term environmental and economic benefits.
These measures will not only support the Agritech industry’s growth but also contribute to a more sustainable and resilient agricultural sector, benefiting both the agriculture industry and the broader economy.
Sachin Sharma, Founder and Director – GEM Enviro Management Limited: Building on the momentum of last year’s budget, which prioritized green growth, the upcoming Union Budget presents a significant opportunity to further strengthen India’s waste management infrastructure. However, significant challenges remain. Inadequate waste collection infrastructure and inefficient sorting and recycling systems continue to hinder progress. Valuable materials are still being discarded in landfills instead of being diverted for reuse.
To truly advance India’s circular economy goals, the government must encourage and support waste management agencies that are diligently working in this field. Additionally, streamlining the supply chain for e-waste and plastic waste is essential. This will foster a robust ecosystem where manufacturers, industry players, and recyclers can collaborate more effectively. While Extended Producer Responsibility (EPR) and the Waste Management Rules of 2016 have had a positive impact, more impactful compliance is needed to achieve truly meaningful results.
