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Budget proposes major boost for infra sector Featured

Published in General Monday, 01 February 2021 16:17


Expressing commitment to augment the country's infrastructure, Finance Minister Nirmala Sitharaman on Monday proposed to significantly enhance capital expenditure to Rs 5.54 lakh crore in the next fiscal, besides creating institutional structures and giving a big thrust to monetizing assets to achieve the goals of the National Infrastructure Pipeline (NIP).
Sitharaman said NIP, that was launched in December 2019 with 6,835 projects, has now been expanded to 7,400 projects and around 217 projects worth Rs 1.10 lakh crore under some key infrastructure ministries have been completed.

"For 2021-22, I propose a sharp increase in capital expenditure and thus have provided Rs 5.54 lakh crores which is 34.5% more than the BE of 2020-21," the finance minister said.
Presenting the Union Budget 2021-22 in Parliament, Sitharaman announced that NIP is a specific target which the government is committed to achieving over the coming years. It will require a major increase in funding both from the government and the financial sector, she said.
 
"In this Budget, I propose to take concrete steps to do this, in three ways: Firstly, by creating the institutional structures; secondly, by a big thrust on monetizing assets, and thirdly by enhancing the share of capital expenditure in central and state budgets," she said.
The minister announced that a sum of Rs 20,000 crore has been provisioned in the Budget to capitalise a Development Financial Institution (DFI).
"The ambition is to have a lending portfolio of at least Rs 5 lakh crore for this DFI in three years time," she said, adding a Bill will be introduced to set up the DFI which will act as a provider, enabler and catalyst for infrastructure financing.
She also announced the launch of a "National Monetization Pipeline" of potential brownfield infrastructure assets, stating that monetizing operating public infrastructure assets is a very important financing option for new infrastructure construction.
An asset monetization dashboard will also be created for tracking the progress and to provide visibility to investors, she said.
Listing measures in this direction, she said the National Highways Authority of India (NHAI) and Power Grid Corporation of India (PGCIL) each have sponsored one InvIT that will attract international and domestic institutional investors.
Five operational roads with an estimated enterprise value of Rs 5,000 crore are being transferred to the NHAI infrastructure investment trust (InvIT).
Similarly, transmission assets worth Rs 7,000 crore will be transferred to the PGCIL InvIT, she noted.'
Railways will monetize dedicated freight corridor assets for operations and maintenance, after commissioning.
The next lot of airports will be monetised for operations and management concession.
Other core infrastructure assets that will be rolled out under the asset monetization programme are -- NHAI operational toll roads; transmission assets of PGCIL; oil and gas pipelines of GAIL, IOCL and HPCL; AAI airports in tier II and III cities; other railway infrastructure assets; warehousing assets of CPSEs such as Central Warehousing Corporation and NAFED, among others.
Regarding highways, she said more than 13,000 km length of roads, at a cost of Rs 3.3 lakh crore, have already been awarded under the Rs 5.35 lakh crore Bharatmala Pariyojana, of which 3,800 kms have been constructed.
Indian Railways has prepared a 'National Rail Plan for India - 2030' under which a 'future-ready' railway system will be created by 2030, she said.
To strengthen urban infrastructure, a new scheme will be launched at a cost of Rs 18,000 crores to support augmentation of public bus transport services.
On the power front, the minister said a revamped reforms-based result-linked power distribution sector scheme will be launched with an outlay of Rs 3,05,984 crore over five years.

Major ports will be moving from managing their operational services on their own to a model where a private partner will manage it for them, she said.
For the purpose, seven projects worth more than Rs 2,000 crore will be offered by the major ports on public private partnership mode in FY21-22, Sitharaman added.

 

No Tax Return for senior citizens

 

 Senior citizens above 75 years of age with only pension and interest incomes have been exempted from filing tax returns

 

While tabling the Union budget 2021-22 in Parliament, the minister said that the number of income tax return filers has increased to 6.48 crores now from 3.48 crores in 2014.

 

"We shall reduce the compliance burden on our senior citizens who are 75 years of age and above. For senior citizens who have pensions and interest income, I propose exemption from filing their income tax returns. The paying bank will deduct the necessary tax from their income," she said.

 

Sitharaman said serious tax offences of concealment of income of over Rs 50 lakh can be reopened even after 10 years.

 

"Presently an assessment can be reopened up to six years and in serious tax fraud cases up to 10 years, as a result, taxpayers have to remain under uncertainty for a long time. I, therefore, propose to reduce this time limit for reopening of assessments to three years from the present six years. In serious tax evasion cases too, only where there is evidence of concealment of income of Rs 50 lakh or more in a year can the assessment be reopened up to 10 years. Even this reopening can be done only after the approval of the principal chief commissioner, the highest level of the income tax department," she said.

 

The Finance Minister also announced to constitute a dispute resolution for small taxpayers that will be faceless to ensure efficiency, transparency and accountability. Anyone with a taxable income up to Rs 50 lakhs and disputed income up to Rs 10 lakhs shall be eligible to approach the committee, she said.

 

She also proposed to make income tax appellate tribunals faceless and to set up national income tax appellate tribunal centre.

 

"I propose to make Income Tax Appellate Tribunal faceless. We shall establish a national faceless income tax appellate Tribunal centre. All communication between Tribunal and the appellant shall be electronic, where personal hearing is needed, it shall be done through video conferencing," the minister said.

 

Sitharaman said that exemption from tax audit limit doubled to Rs 10 crores turnover for companies doing most of their business through digital modes.

 

"Currently, if your turnover exceeds Rs 1 crores, you have to get your accounts audited. In February 2020 budget, I had increased the limit for taxation audits to Rs 5 crores for those who carry out 95 per cent of their transactions digitally. To further incentivise digital transactions and to reduce compliance burden, I propose to increase this limit for tax audit for such persons from five crores to Rs 10 crores," she said.

 

Reactions

 

Udaya Bhaskar Rao Abburu, CEO & Managing Director, iRam Technologies

 

We expected more from the Union budget 21-22. While the focus has been on infrastructure, FM has allocated Rs. 93,400 Crores for roads only, no allocation has been made for development of Smart Cities. Though FM talked about double digit growth of the manufacturing sector for India to become $5 Trillion economy, no roadmap has been laid out for the same. We also need more clarity on how Rs. 2217 Crores allocated for setting up 42 Urban centres to tackle pollution problem will be used. Change in definition of Small companies may benefit some Small-scale companies, provided more support for Small scale companies are announced.

 

Dr Ajay Data, Founder & CEO, VideoMeet
The announcement by the Finance Minister regarding the startups was much required at the moment and will help the fledgling startups with meager resources to continue with their business operations without worrying about the compliance with complex taxes. The announcement comes soon after Prime Minister announced setting up of Rs 10,000 crore fund for seed funding of startups. These moves by the government make the intent of government clear that it wants to promote entrepreneurship and help the enthusiastic young entrepreneurs in the country.The setting up of separate administration structure to promote ease of doing business is a laudable move by the FM. Also, as predicted startups were given importance under this budget and the industry is poised to be greatly benefited with the Tax holiday extended by another year till 31 March, 2022.
 

Sai Srinivas, Co-founder and CEO, Mobile Premier League(MPL)

“Government’s budget announcement has been extremely encouraging for the start-up ecosystem in India. The extended exemption on capital gains for investments will definitely make more funds available for budding entrepreneurs and growing organizations alike.Digital payments infrastructure has played a very important role in the growth of the mobile gaming industry. It is very encouraging to see the government’s efforts to strengthen digital payments through incentivization.  The Rs 1,500 crore boost will further support migration of more people towards digital payments and will have a positive impact on the mobile skill gaming industry. The incentivizing of one person companies is especially heartening as it promotes the development of more game creators that will help in strengthening the gaming industry in India. The move has also allowed conversion of one-person companies to any other kind, reducing residency limit from 182 days to 120 days. India is at the cusp of creating a wave of mobile gaming unicorns, these measures only support that momentum. With these announcements acting as winds in our sails the Indian Gaming Industry can aspire to be the Global Hub of game development.”

Gaurang Sinha, Director of Go-to-Market Strategy at Flock 

“We welcome the Finance Minister's announcement to introduce the scheme allowing 1-person company(s) for start-ups and innovators to be exempted from paid-up capitals and turnover norms, in the Union Budget today. This will enable India to develop new technologies and boost employment like never before. Additionally, the government’s move towards boosting emerging technologies such as the internet of things (IoT), machine learning (ML), artificial intelligence (AI) and data analytics, will accelerate the growth of our digital economy. Further, the adoption of video conferencing for various tasks by the Government will encourage the use and demand for professional communication and collaboration platforms. We believe that with all of these measures, this new decade looks great for the Indian start-up ecosystem. “

 

Kunal Lakhara, VP of Finance and Operations, Pocket Aces

“The Union Budget 2021-2022's revised fiscal deficit estimate for FY21 which is pegged at 9.5% of GDP seems promising, and has taken on a realistic approach that is focused on spends which are much needed to revive the economy. The tax holiday given to startups for an additional one year brings relief to enabling the sector to sustain and grow, as we recover from the pandemic. Furthermore, the move to encourage one-person companies without any restrictions is a step in the right direction. This will go a long way in encouraging more people to come forward to set up innovative businesses that solve the challenge of the day, and grow the high-potential startup ecosystem within the country.”

 

Dhruvil Sanghvi, Chief Executive Officer, LogiNext

“We welcome the incentives proposed by Honourable Finance Minister Ms. Nirmala Sitharaman. Strengthening global and national supply chains is of paramount importance for economic growth. The proposals to set up freight corridors across the country, as well as the proposal for a future ready rail system, along with development of national highways will bridge the gaps that currently exist, bringing in better connectivity between production and consumption markets. Furthermore, the push towards digitisation along with proposals of the one year tax holiday for startups and extending cap gains tax exemption for investment into start-ups shows the intent towards making it easier to do business in India and push forward on the technology wave.”

 


Mr. Madhusudan Ekambaram, Co-Founder & CEO, KreditBee and Co-Founder, FACE (Fintech Association for Consumer Empowerment). 

 

The Government’s decision to boost entrepreneurship and digital payments in India is a testament to its commitment to realize its vision of an economically self-reliant nation.

 

The COVID-19 pandemic has given a fillip to the adoption of digital payments as more and more consumers realized the benefits and convenience they have to offer. I welcome the Rs 1,500 crore scheme announced by the Hon’ble Finance Minister in the Union Budget 2021 to promote digital payments as it will help create a robust and dynamic payments ecosystem in India's emerging digital economy.

 

The extension of tax holiday by one more year to March 2022, along with capital gains exemption, will boost startups by helping them tide over the economic crisis unleashed by the COVID-19 pandemic. Furthermore, the proposals to incentivize OPC incorporation along with measures like the removal of the restrictions on paid-up capital and turnover or reducing residency limit is in sync with the government vision of encouraging and catalyzing entrepreneurship in India.

 


Mr. Nikhil Barshikar, Founder and Managing Director, Imarticus Learning, India’s leading professional education company that offers training in financial services and analytics:

 

“The Central Government has proposed the implementation of Data Analytics, Data Science, Artificial Intelligence and Machine Learning to upgrade the functioning of the Ministry of Corporate Affairs. Specifically, the Ministry’s database management systems will be overhauled, leading to increased efficiency in e-scrutiny, e-adjudication, e-consultation and compliance management. To accomplish this, highly skilled Indian Data Scientists and Analysts will be required.

We have also been informed that a Trans-Asian partnership between India, Japan and the UAE is in the pipeline, wherein Workforce Upskilling initiatives and Diploma & Skill Certification programs will be jointly supported by the 3 nations. Given that Imarticus Learning has already established a presence in the UAE this year, this development is of particular interest to us, and we will pay close attention as more information comes to light.

Furthermore, INR 3,000 Crore has been allocated to upskilling and training Indian Engineering Graduates and Diploma recipients, in view of modernizing India’s domestic talent pool.”

 

Mr.  Narayan Mahadevan, Founder, BridgeLabz-Platform bridging the talent gap and providing skilled engineers to startups and enterprise:   

 

FM today in the budget speech was on the spot to recognize India will have the World largest working age population by 2030 which needs to be skilled for the Job. And Internship/Apprenticeship is the best way to garner the required Job skills. I wish the Government had definitive plans to accomplish the same and even encourage such platforms that work towards skilling from the perspective of employability and create business models on successful employment. It's welcoming to see Startups get a tax holiday for one more year in Budget 2021. I wish the Government simplified the procedure to get Low TDS. Many startups do not make money and if the money is stuck with the Government as TDS, it creates that much more challenge for survival.    

 

 

 Neha Bagaria, Founder, CEO, JobsForHer:

"The government’s emphasis on creating an Atma Nirbhar Bharat is synonymous with ensuring that our women are also atma nirbhar, which can only come with their financial independence.  It is thus a welcome change that women will be allowed to work in all categories with adequate protection, a move which will open up further job opportunities for women, thus enabling higher financial security.

Additionally, we had highlighted the need to ensure that gig workers, a huge proportion of whom are women, need to be provided with adequate benefits. It is thus heartening to see that Social Security benefits will now be extended to gig and platform workers for the first time".  

 

 

Mr. Anuj Kumar Garg, Vice President-Customer Engagement & Distribution, Viridian RED 

"The Union Budget 2021 highlighted the governments' major thrust on infrastructure and manufacturing besides healthcare being the topmost priority. From the number of steps proposed to support the MSME sector to set up textile parks, the budget stressed strengthening domestic manufacturing. The government’s focus on infrastructural development and dedicated freight corridors would establish seamless connectivity further augmenting the manufacturing setup in the country. With the aim of drawing more investment, the Budget proposed additional tax incentives for the companies relocating foreign funds to the GIFT city which is a laudable decision in the making of GIFT City a global financial hub. Also, the debt financing of InvITs and REITs is an appreciative move as it will enable the real estate and infrastructure sector to attract more investments. From the employment generation to push real estate demand, these initiatives are likely to bring the economic multiplier effect which is a need of the hour."

 
Santosh Agarwal, CFO and Executive Director, AlphaCorp 
Seeing affordable housing as the fastest growing sector, the government has announced the extension of one year till 31st March 2022 on the additional deduction of Rs 1.5 lakhs on the sanctioned loans. This will increase and provide a much-needed impetus to the housing demand and encourage prospective buyers to avail more benefits and invest in real estate. The emphasis given on urban infrastructural development through the expansion of the metro rail network will help in seamless connectivity in Tier-II cities along with other prevailing announcements like RRTS , freight corridors will give thrust to the realty sector. The long-standing ask for single window clearance and industry status are still to see the light of the day. 
 
 
 
Mr. Rajesh Uttamchandani, Director, Syska Group 
Finance Minister Nirmala Sitharaman stated that for a 5-trillion-dollar economy, our manufacturing sector has to grow in double digits on a sustained basis. We welcome the measures exercised by the honorable Prime Minister Shri Modi Ji and his government in the Union Budget towards boosting electronic manufacturing in the country. The government led by Modi Ji has pledged an infusion of Rs 1.97 lakh crore on various PLI schemes over the next 5 years, starting this fiscal. This is in addition to the Rs 40,951 crore towards the PLI scheme to help expand and boost exports. Today, India’s manufacturing industry has tremendous potential to place the country on the global manufacturing map, simultaneously boosting several employment opportunities to India’s youth. Our manufacturing companies need to become an integral part of global supply chains. With a budget of Rs 15,700 crore, which is more than two times that of the previous year, this will help strengthen the MSME sector in terms of productivity development, technology adoption, strengthening of infrastructure and more. As a company, Syska has always been aligned with the vision of Atmanirbhar Bharat promoting sustainability through our products and creating new job opportunities. The budget has a positive, expansionary approach towards the manufacturing sector, which is reflected through the incentives and strengthening of the PLI schemes provided by the government."

 

Mr. Kishan Jain, Director at Goldmedal Electricals

“The Union Budget 2021 has provided massive opportunities for companies looking to set up manufacturing facilities in the country. Given our current economic situation across the globe caused by the pandemic, the Finance Minister’s decision to infuse INR 1.97 lakh crore towards various PLI scheme is laudable in addition to the Rs 40,951 crore towards the PLI scheme to help expand and boost exports. As correctly stated by FM Nirmala Sitharaman, our manufacturing companies need to become an integral part of global supply chain. Further, the provision of INR15,700 cr towards the MSME sector, will provide a further fillip to the Government’s flagship Make in India initiative. As a company, Goldmedal Electricals has always been at the forefront of introducing innovative and sustainable solutions that make our planet not only smarter but also sustainable for generations to come and support government’s vision of Atmanirbhar Bharat.”


Ms. Surabhi Goel, CEO - Aditya Birla World Academy, Aditya Birla Education Academy, The Aditya Birla Integrated School

 

“The measures announced by the finance minister in today’s union budget 2021 focuses on two important aspects – one is the continuous upskilling of India’s youth and also providing education for all. We are in-line with the announcement as Aditya Birla Education Academy is at the forefront of creating various programs that help the educators of the country upskill themselves. Finance minister Niramala Sitharaman has set aside funds worth 3000 crore with an aim to create an opportunity for millenials of India to upskill themselves. The budget also provided an impetus on establishing a National Research Foundation by allocating Rs 50,000 crore thereby qualitatively strengthening the education system through the National Education Policy. At Aditya Birla World Academy and The Aditya Birla Integrated School, the focus has always been on creating a cohesive learning environment for the students even through the online medium over the course of last year. We aim to make the students future ready by imparting practical learning along with theory based sessions. We believe that the measures announced by the government will further boost in augmenting the education sector of the country.”


Mr. Niraj Hutheesing, Founder and Managing Director, Cygnet Infotech

 

 “We welcome the measures announced by the government of India in the Union Budget 2021. Significant capital expenditure in infrastructure and health care sectors will be a big asset for India. Promotion of digitization at large, and digital transactions particularly, is another positive aspect of the budget. There has been political will to take a big deficit for the next year. Simplifying the tax regime is another important aspect of this Budget. To ease compliance, the Finance Minister has increased the tax audit limit from ₹5 crore to ₹10 crores for the companies that conduct most of their business through digital modes. Additionally, the government is also planning to take steps to reduce inverted duty structures in GST and has proposed to review over 400 old exemptions in indirect taxes and will begin extensive consultation from October 2021. The budget also provided impetus on one of the most hard-pressing issues, namely tax evasion cases. The use of digital technologies such as automation solutions and data analytics tools can help in removing anomalies in the GST tax infrastructure and make it transparent to a great extent. All the measures announced today will further enable companies such as Cygnet Infotech to develop technology solutions for businesses to help them adhere to the taxation norms” -


Gaurang Sinha, Director of Go-to-Market Strategy at Flock  

 

“We welcome the Finance Minister's announcement to introduce the scheme allowing 1-person company(s) for start-ups and innovators to be exempted from paid-up capitals and turnover norms, in the Union Budget today. This will enable India to develop new technologies and boost employment like never before. Additionally, the government’s move towards boosting emerging technologies such as the internet of things (IoT), machine learning (ML), artificial intelligence (AI) and data analytics, will accelerate the growth of our digital economy. Further, the adoption of video conferencing for various tasks by the Government will encourage the use and demand for professional communication and collaboration platforms. We believe that with all of these measures, this new decade looks great for the Indian start-up ecosystem". 

 

 Mr V K Mathews, Founder & Executive Chairman of IBS Software, on the Union Budget 2021-22.

 

I feel it was a positive budget under the circumstances and in the right direction. One of the key issues in these times is how to boost demand; and the budget provides the answer with a significant government capex spend on infrastructure.

A more detailed thought seems to have been given on disinvestment this time. Not only is a SPV proposed, but states will also be incentivized if they take up disinvestment.  Given the favourable capital market situation, the target set out has a much better chance of being achieved.  Disinvestment not only brings in more money, but also makes the target company more efficient. Asset monetization by handing over highways and ports to PPP mode is a step in the right direction. The nation gains little if assets lie locked up with little or no yields. The other positive aspects of the budget are agricultural reform, development of human capital and focus on innovation and R&D.

However, the budget does not spell out any tax reforms. More money in the hands of individuals would’ve pushed consumption. The budget is silent about tapping wealthy NRIs for more economic activity. They should be incentivized to spend their wealth in India. Some sectors like travel, tourism and hospitality have been struggling more than others. No sector-specific programmes have been laid to revive them. This could result in a ‘K’ shaped recovery rather than a ‘V’ shaped one.

The budget is good for Kerala. It has set apart Rs65,000 crores for the development of 1,100 kms of the state’s highways. It talks about the Madurai-Kollam Corridor, earmarks Rs 1,957cr for phase two of the 11.5 km stretch of the Kochi Metro. Moreover, Kochi has been named as a harbour hub.
 
 
    Irwin Anand, MD, Udemy India.

 

A welcome change happened with NEP last year and the budget 2021 continues to reinforce that. The implementation of NEP in 15000 schools to create a model is a good move. It will promote coherence among educational institutions and increase the flexibility in education delivery by using face-to-face, online and hybrid models. Collaboration with countries like Japan for sharing of technology and UAE for skill development courses are also welcome moves. These will increase the chances of employability for our youth. The steps to set-up a Higher Education Commission and 750 Ekalavya residential schools in the Tribal Areas are also commendable. These steps will allow students from across the country to have access to quality education.
 
 
 
 
Shridhar Venkat, CEO, The Akshaya Patra Foundation.

 The 2021-22 Union Budget has provisioned to merge the supplementary nutrition programme under the Anganwadi Services Scheme with Poshan Abhiyan. It is indeed a welcome move by the Government. At a time when we are threatened with the massive burden of malnutrition, it’s better to have our efforts aligned under one umbrella. Though the Government has been making several interventions in the past to improve nutrition, allocating additional resources will help broaden the base of people reached. Considering that during the pandemic, school going children were deprived of mid-day meals, it is imperative that nutrition deficit is tackled on a war footing. I look forward to Mission Poshan 2.0 that will create a positive impact on public health & nutrition and rid the nation of hidden classroom hunger. As a foundation we are committed to working with the Government in meeting UN’s SDG goals of Zero Hunger by 2030. 

 

Shachindra Nath, Executive Chairman & Managing Director, U GRO Capital_*..

____
 
Broadly evaluating, the Union Budget 2021 is a significant attempt by the government, to accept a higher fiscal deficit and enhance expenditure towards economic revival. It is appreciative of the government to put a special emphasis towards providing relief to the tax payers and reducing the burden posed by COVID-19. One of the key highlights of the budget is setting-up of the development finance institution (DFI) towards infrastructure financing and institutional framework to purchase corporate bond, which would solve the issue of liquidity for the infrastructure sector and corporate bond market. Also, with the path-breaking initiative of instituting Asset Reconstruction Company (ARC) and asset management company (AMC) for NPA consolidation, banks have been allowed to streamline their focus on the much needed growth.
 
The government has reduced the threshold for NBFCs to initiate recovery under the SARFAESI Act, 2002. This is an effective step towards ushering credit discipline and in the long-term will increase the penetration of credit to small businesses. The government has also doubled its allocation towards MSMEs, which would greatly support their revival and the eventual growth. Holistically, the Union Budget 2021 is an encouraging event, yet we optimistically look forward to a distinctive support for NBFCs, with a framework to provide them sufficient liquidity, while also furthering the credit guarantee scheme support to the MSMEs.
 
 

  Dr  J. Hareendran Nair,Founder and Managing Director. Pankajakasthuri Herbals Pvt Ltd

 

“Overall, the fiscal budget 2021-22 was extremely promising. At Pankajakasthuri, we welcome the monumental increase in allocation of funds towards improving India's healthcare system and making it more robust. Over the years, the healthcare sector has been a key driver for economic growth and it is encouraging to see it listed among the six pillars towards strengthening the Prime Minister’s vision of Atmanirbharta. With the government focussing on establishing integrated public health labs and health information portals, we hope to see a more holistic approach to new drug discovery to overcome pre-existing challenges. In India, while we have, as a nation, accepted Ayurveda as a natural part of our lives and our homes, we are yet to truly explore its full potential – and this has never been more urgent or more necessary than during the current times. This is truly the beginning of India's prowess as a global centre of science-backed traditional medicine and we are hopeful that Ayurveda will be proactively promoted under the Swasth Bharat Yojana and other public health schemes."

 

 

Union Budget 2021 will put India on faster recovery path, says GlobalData

 

Gargi Rao, Economic Research Analyst at GlobalData, a leading data and analytics company, offers her view:

“The huge increase in health expenditure by 137%, support for domestic agri-manufacturers through increase in custom duties and a big push for infrastructure will help revive the economy, which is forecasted to witness a V-shaped recovery with 9.72% growth in 2021.The growth recovery path will facilitate robust revenue collection in medium-term and lead the economy to a sustainable path in the long-term.

“For capital creation, a special purpose vehicle will be launched by the government for asset monetization, which will bring in more revenues. For senior citizens, a compliance burden relief is proposed to raise the purchasing power and drive demand.

“The budget proposed to amend the insurance act to introduce additional FDI to insurance companies from the existing 49% to 74%. The government’s decision of strategic disinvestment in LIC IPO in FY22 along with BPCL, CONCOR and SCI in 2021-22 will lead to the reduction in debt and spur the development of capital market in India. Setting up of bad banks will reduce the burden of NPA for banks and NBFC’s.

“With regards to agriculture and manufacturing sectors, the 1.5 times increase in minimum support price for all commodities comes as a relief to farmers. In addition, increase in import duties for agricultural products will protect domestic industries and give a boost to ‘Make in India’ initiatives.

 

 

 Mr Chocko Valliappa, Vice Chairman, Sona Group of education institutions, Salem

 



“Focus on Innovation and R&D, setting up of a Rs 50,000 crore National Research Foundation will fire up the research activity. I hope the share of allocation to private sector institutions doing worthy R&D grows from the current beyond a few IITs and research focused government institutions,” says Chocko Valliappa, Vice Chairman, Sona College of Technology that runs 36 R&D labs at its Salem campus.

 

 

The provision of an umbrella body to synergise activities of research institutions in major cities will help avoid duplication of research efforts and help breakdown silos most researchers are used to working in.

.

“The Union Finance Minister deserves compliments for focusing on internships for engineering graduates and diploma holders, extension of skill development initiatives along the lines of existing arrangements with Japan to other countries and allocation of funds to set up additional residential schools for SC/ST students as also providing for more scholarships”, says Chocko Valliappa, Vice Chairman, Sona Group of Education institutions.

 

Even though the coming year calls for rapid skill development to improve employability of youth more than ever before, a sharp decline in budget allocation for jobs and skill development is surprising.

 

While opening up of FDI in higher education sector is welcome the government needs to ensure a level playing field for established Indian education players.

 

The education sector could have benefitted by an allocation higher than the Rs 93,224 provided for in the 2021-22 budget. Even though this is higher than revised budget estimates of Rs 85,089 crore, it falls short of what was budgeted in the 2019-20 budget by 6 per cent, adds Mr Valliappa.

 

 

 

 Barnik Chitran Maitra, Managing Partner & CEO of Arthur D. Little India and South Asia.

 

“Finance Minister has done a commendable job in reducing the fiscal deficit of 9.6% of the GDP in 2020-21 to 6.8% of the GDP in 2021-22 in an admirable growth-oriented budget. The government’s strategic plan to invest in infrastructure while monetizing government assets and disinvestments will go a long way to ensure fiscal prudence.

Scrappage policy initiative is a great push in ensuring sustainable and pollution free environment with spill over benefits to the automobile sector and catalyze the Electric Vehicle ecosystem in India. Extending this policy further to government-owned vehicles would enhance true benefits of the policy. 

Increase in infrastructure spending with a capital spending increase of over 25% notably in railways, metro, and roads will serve the dual purpose of job creation and building long-term assets for the country. Instituting successful Public Private Partnership (PPP) models and creation of a Development Financing Institution (DFI) is a bold move to ease mobility, boost automobile sector and create jobs for the youth of India.
The government has taken a bold move by considerably increasing the healthcare spending from 0.5% of the GDP to over 1% of GDP to create necessary primary, secondary and tertiary care infrastructure. This is a 137% increase from the previous year commendably addressing the most pressing issue in the economy and prioritizing the health and well-being of the citizens of the country.  
It's a pro-reforms budget with a bold move to privatize two public sector banks and implement the LIC IPO. However, a funding roadmap for bank recapitalization needs to be detailed out further in an otherwise stellar budget.” 

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Last modified on Wednesday, 03 February 2021 12:41

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