The Union Budget 2019 Focuses on SMEs, MSMEs and Startups
Nirmala Sitharaman with her team members at North Block, New Delhi
The Union Budget 2019 is finally here. Mrs. Nirmala Sitharaman the Minister of Finance & Corporate Affairs, who also happened to be a corporate professional and an economist during her previous stint, presented the union budget of NaMo 2.0, today, 5th July 2019. The main highlight of this focuses on infrastructure development, tax relief, foreign investment, farm distress, women empowerment, transportation (EVs), and housing amongst other areas. By and large, it has met the expectations of entrepreneurs and business professionals. The Union Budget turned a lot in favour for them, as she announced pension programme for 30 million retail traders, electronic fund raising platform for listing social enterprises, scalable variation in GST, investment benefits & tax measures, and video platform for startups, MSMEs & SMEs.
The budget is expected to set tone for next five years and offer insights to focused areas of interest where the country is set to enter a new phase of economic growth.
Let’s see what the business professionals have to say regarding the New Union Budget 2019.
Atul Rai, CEO and Co-Founder of Staqu, says “The new Government's first Union Budget has perfectly balanced all essential parameters of our economic dynamics including infrastructure enhancement, skill development, job creation, and technological advancement. This has been done while also creating favorable environment for businesses and especially, tech-centric startup. We would specifically like to highlight the Government's strong focus on the indigenous Research and Development with establishment of National Research Foundation will promote indigenous technological development, particularly around globally scalable technologies such as Artificial Intelligence, Big Data, and Robotics. We believe that this will pave the way for cutting-edge indigenous solutions and make India a technological epicenter in the international grandstand."
“Eagerly awaited budget post the overwhelming majority. We see this as a right step towards Realizing the dream of Startup India and other such initiatives. We are particularly excited and eagerly awaiting to see the details of the much needed and talked about Modern Tenancy Law proposed, which we envisage to be a cornerstone in this new found co-living space. Push towards Study in India has the potential to augment the existing market and help gain better focus in future. Consolidation and modernization of labour laws which shall help in ease of business is a welcome step. Push towards Digital payments helps reduce costs while being a part in the govt initiative to move toward Digital India. Ease on angel tax laws was a much awaited policy and a welcome step in this budget”, says Nikhil Sikri CEO & Founder, Zolo Stays.
Kartik Walia, Head of Operations (India) at Amplify.ai exclaims "We see multiple positive takeaways from this year's budget. The government, while adding greater impetus on digital adoption and infrastructure enhancement, has a positive outlook towards promising technologies including Artificial Intelligence and Big Data. It has recently announced the launch of National Artificial Intelligence Center and National AI Portal and now, in the Union Budget, has promised to build skillsets in ultramodern technologies such as AI, Big Data, and Robotics. The Government's technology-centric strategy is highly appreciable and we believe that favourable results will be visible in the near future.'
“The Union Budget has ticked some of the right boxes for creating a supportive ecosystem for start-ups and entrepreneurs. The creation of payment platform for MSMEs for filing of bills and payments is a step in the right direction. The credit boost to MSMEs through 350 crore interest subvention and 2 % interest subvention for GST-registered MSME on the fresh or incremental loan will help businesses and spur the waning economy,” says Akshay Hegde, Co-founder & MD, ShakeDeal.
He further adds “Also, start-up channel on Doordarshan will help budding entrepreneurs to shape their ideas and guide them about complex issues of compliance and taxation. The proposal to discourage business payments in cash and levy 2% TDS on cash withdrawal exceeding 1 crore in a year from a bank account will bring in tax compliance and also increase revenues for the government. Filing of single monthly GST return will provide a big relief for MSMEs on the compliance front. Start-ups and investors who file declarations will not be subjected to scrutiny in valuation - this is a positive development that will encourage angel and private equity investments.”
Harshil Mathur, CEO and Co-Founder, Razorpay, says "This budget brought in some good news for Startups and FinTech. It solved one of the industry's major concerns that going forward, the startups do not have the trouble of angel taxes. Next, the announcement about launching an e-verification portal for investors will help startups worry less about the verification of their investors. On the digital payments front, the government has demonstrated their interest in promoting digital payments in a great way - a) any business will be charged a TDS of 2% on cash withdrawal of above 1 crore in a year, b) any business which has an annual turnover of Rs 50 crore and above must opt for certain modes of payments, with no charges or merchant discount rates. I believe this will discourage businesses from making cash transactions and encourage them to make payments through digital channels.”
He further states “I think the budget meets expectations from the industry and seems fairly positive for FinTech and startups. I see these as welcome moves for the digital payments ecosystem, which will also certainly increase adoption of B2B digital payments."
Rohit Manglik, CEO, EduGorilla avers “A series of incentives accorded to startups in the Union Budget is a testimony to the government’s intent of fostering an enabling ecosystem to promote entrepreneurship in India. The move to set-up around 80 ‘livelihood business incubators’ and 20 tech business incubators is commendable as it will boost entrepreneurship besides upskilling the workforce to meet demands of industry 4.0. Furthermore, the easing of Angel Tax on Start-ups and the proposal to revamp the Labour Laws will improve the Ease of Doing Business in the Indian economy. The extension of Women SHG Interest Subvention Programme will boost women entrepreneurship.”
“I along with many startups had urged FM to simplify the angel tax issue. And here comes the move which we all would like. Provision of e-verification of such investment and declaration from startup/angel is good enough to stay away from angel tax scrutiny," says Bhavin Patel, Co-Founder & CEO, LenDenClub
Abhishek Ray, Head - Legal and Compliance, ePayLater says, "We are glad to note that at the very outset there were specific references to boosting Digital India and Startups in the 10 point vision of Hon'ble Finance Minister. The multiple initiatives announced for improving transport, in terms of road corridor, port connectivity and UDAN scheme will boost domestic trade. The MSME centric steps are also very encouraging in terms of allocation of more resources for loans and the creation of a platform for filings bills. All this will go a long way in helping small businesses.”
He adds on, “The increase of the turnover limit for the lesser corporate tax bracket is a measure which will massively benefit the industry. In terms of startups, the angel tax related steps and clarifications are welcome, along with the steps to reduce tax scrutiny. We are very enthused to note that the Hon'ble Minister emphasised on the need for a cash free economy. Initial steps have been initiated for encouraging digital payments. However, the thresholds mentioned are quite high. This is a good start and we are certain to expect more incentives later on. Innovation is the backbone of the startup sector and for boosting industry in general. We are also very glad to note the boost being given to centers of higher learning to encourage research. Overall we think this was a well balanced budget which has balanced the aspirations of both urban and rural India."
“The Union Budget announcement on scaling up the Indian economy from USD 2.7 trillion to USD 3 trillion in FY20 and further targeting USD 5 trillion by 2024-25 is a strong roadmap for economic growth which will boost business activities in country. Our customers i.e MSMEs are facing a consumption economy. With the encouraging measures for boosting GDP driven by consumptions and investments, it ushers in positivity for our line of business. Overall Govt. measures announced for road, port connectivity, foreign flows into debt instruments and construction of 9.5 Crore houses in next 3 years and other tax measures will boost the Indian economy. Moreover, the Govt. has acknowledged NBFCs as a major contributor to GDP growth with adequate measures for supporting their liquidity requirements, lowered tax rates and Guarantee facilities for raising competitive funds,” says Piyush Khaitan, Founder & MD, NeoGrowth
Abhishek Chakraborty, Executive Director, DTDC Express Ltd says, “The logistics sectors plays a very crucial role in propelling India to become a trillion dollar economy. With some key measures like Ease of Doing Business, simplification of e-way bills, UDAN, Bharatmala, Jal Marg Vikas etc., it will only improve the overall logistics sector and also reduce the cost of transportation. The budget also specifically mentioned on the Government’s vision to focus on rivers for cargo transportation which help in increasing the freight movement whilst making it cost effective. The proposals made in the budget look very conducive to improve the sector’s competencies. The budget announcement has made special emphasis on the ‘Ease of Living’ thus making it very citizen friendly. The only thing now is execution which remains key and be watched for.”