Union Budget 2021: Post budget reactions from India Inc.

Union Finance Minister Nirmala Sitharaman presented her first paperless Union Budget 2021 on Monday announced a slew of measures on healthcare and infrastructure to give an impetus to the COVID-hit economy. This was the first budget after the pandemic where everyone had some expectations from the finance minister. Dubbed as the most crucial Budget of India in recent years, the Budget has come in the backdrop of the largest gross domestic product (GDP) contraction India has suffered post-Independence due to COVID-19 pandemic. India has been among the worst-hit major economies due to the virus-induced lockdown, with the economic growth contracting by a massive 23.9 per cent year-on-year (YoY) in the June 2020 quarter, the first GDP contraction in over 40 years. There are only four occasions in India’s history when GDP growth has suffered a contraction: 1957-58 (1.2%), 1965-66 (3.7%), 1972-73 (0.3%) and 1979-80 (5.2%). The FM’s budget focused on higher spending, healthcare expenditure, infrastructure development and public sector bank privatisation, while no major income tax relief has been provided to the common man. Markets have surged nearly 4 per cent particularly led by the private sector banks. Here are few post-budget reactions from India Inc on the union budget 2021:

Mr. Sam Cherian, Founder & Managing Director, Schevaran Laboratories Pvt. Ltd.

 “The Union Budget announced today comes as a structural reset for the Indian economy post the pandemic aftermath. The focus on key pillars- from agriculture to infrastructure to healthcare and digital & financial inclusion is overwhelming. In her budget 3.0, the Hon’ble Finance Minister pointed out that the manufacturing sector has to grow in double digits on a sustained basis for India to touch 5 trillion economy. This demonstrates positive vibes for the sector to further accelerate towards Aatmanirbhar Bharat, thereby, promoting investment and employment opportunities. The provision to launch Urban Swachh Bharat 2.0 Mission of Rs 1.41 lakh crore over 5 years is laudable. It enhances India’s readiness for a healthy nation as well as broadens the business roadmap for various industries, including hygiene and cleaning. Overall, we believe that today’s budget is certain to impetus the country’s GDP in the coming days.”  

Mr. Rhitiman Majumder, Co-founder, Pickrr Technologies

“The infusion of money for road development in four states is a welcome move for smooth/faster logistics transport. This move will further ensure greater connectivity in tier -2 /tier-3 cities in these states. This is a very welcome move from the respected Finance Minister. Further, the highest financial package for railways will add to the smooth connectivity between different points of the country and easy and faster freight movement.”

Ms. Ambika Sharma, Founder & MD, Pulp Strategy

“Doubling of MSME allocation, setting aside Rs 15,700 crore for medium and small enterprises in FY22, comes as a welcome move. Increased inclusion of women in the workforce is a good move, and will have a long term positive impact on household income. The services sector has a negligible focus in the budget.”

Mr. Rajesh Goenka, Director, Sales & Marketing, RP Tech India

“Overall it is a very pleasant budget without any surprises which is good because in the current scenario consistency and continuity is more important rather than having mere aspirations. This is overall a balanced budget and only enhances the momentum set by our prime minister and finance minister in the last two years. In terms of the IT hardware industry, there is no major change, however, with the government investment, the overall market demand is likely to grow up. IMF has also forecasted the industry growth 11 to 11.5 per cent, which is good for the industry. So overall we are optimistic about the budget”

Rajat Jadhav, Co-founder, Bold Care

“The budget has rightfully taken into account the health of the scathed startup ecosystem in India and has simultaneously acknowledged its potential to change the face of the Indian economy. The extension of the tax holiday by a year is a welcome move that will provide relief and have a positive effect on the start-up sector. The increased focus on capital infusion and ‘Make in India’ initiatives will encourage start-ups to innovate and expand their folds in a non-strenuous and nurturing environment. Paid-up capital for enterprises with a turnover of up to Rs. 2.5 crores will inspire newer investors in the start-up space while the focus on FDI will help existing players to transform themselves into global case studies. Also, the increased impetus given to skill development and R&D will enhance the investment climate and spur growth leading the path for start up’s of today to emerge as MNCs of tomorrow. Additionally, the technology-driven measures along with simplification of the GST structure will add a new dimension to the long term development of this sector. With a connectivity focussed approach and a digital transaction inclined culture, the union budget has made it easier for startups to deepen their hold over the geographies of the country. Also, ease of business will help startups manoeuvre the marketplace and flourish in a competitive economy.”

Pallav Bihani, Founder & CEO at Boldfit

“In a pandemic impacted year, significant allocation in the Union Budget 2021 for the healthcare and wellness industry is commendable. The outlay for the healthcare industry is – 137 per cent higher at Rs 2,23,846 crore – a whopping high compared to the industry’s previous budget allocations. This allocation also includes the much needed Rs 35,000 crore for Covid-19 vaccines to ensure the swift rollout of mass vaccination and restoring economy sooner than expected.

Ensuring wellness and nutrition for all, the Union Budget 2021 merged the supplementary nutrition programme with the Poshan Abhiyaan to launch Mission Poshan 2.0. The new programme aims to reinforce nutritional content, delivery, outreach, and outcome. This way the government has targeted well in both preventive & corrective health care.

Government has allowed opening company with a single owner, encouraging solopreneurship and rebuild start-ups. No doubt that this will soon to become the most lauded government initiative. Amid pandemic, government strikes balance. Meanwhile, (One Person Company) OPC would encourage entrepreneurs to grow as OPCs without any restrictions on paid-up capital and turnover. With this, OPCs have the flexibility to convert into any other type of company at any point in time.

Startup ecosystem emerged during 2018-2020. This timeframe played a catalytic role for startups with policy and tax reforms. Extending the eligibility for tax holidays to startups for one more year is a positive step. Additionally, extending capital gain tax exemption for investment in start-up by one more year is conducive for investors to invest and for startups to keep going. These two extensions will take down the burden and pressure off from the investors and startups as well, attracting more investments.

In short, this is a progressive budget and addresses the aspirations of new India. The much-feared imposition of Covid cess has been aptly missed by the Finance Minister which brings cheer across the industries.”