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Nirmala Sitharaman has presented a holistic budget and it is an extension of ambitious schemes announced by the government for doubling farmers’ income, infra boost, etc. This instills confidence in the industry that the government is serious about its programs and deadlines. If these schemes are successfully executed it will put the economy on a growth path and create demand in the economy. This budget also supports MSME focused Fintechs like FlexiLoans.com by (i) extending provisions of subordinated debt to entrepreneurs focused on MSME’s, (ii) extension of provisions CGTSME scheme, (iii) mechanism to solve for liquidity crunch for NBFC’s and (iv) allowing NBFC’s to participate on Treds.Ritesh Jain – Co-Founder at FlexiLoans.com
Fintechs can take benefit of this growth stimulus and SME focused initiatives.Abhishek Kothari – Co-Founder at FlexiLoans.com on the Budget 2020 Announcements on the importance of Artificial Intelligence, IOT, Machine Learning, and other technological developments. Technology gaining importance in today’s Digital Era:
The Union Budget 2020 has shown a ray of light for the Fintech sector, with FM Nirmala Sitharaman stating that India will embrace a shared economy with aggregators displacing regular business. The importance of Analytics, IoT, and AI has been recognized in this budget, as they are set to change the world. A policy has been announced to set-up data centre parks all through the country.
Furthermore, she went on to add that public institutions, which are at Gram Panchayat level, will be provided with digital connectivity, as Fibre to home will link over 100,000 Gram Panchayats in FY21, through BharatNet. For this, Rs 6,000cr have been allocated to BharatNet. Moreover, Rs 8,000cr is also being allocated to set up for National Mission on Quantum Computing and Technology.
It is good to see technology find a significant mention in the budget. If done correctly, setting up Data Centre Parks, Fibre to home and investments in quantum computing, have the ability to create a digital connected India. The proof is always in the execution.
I welcome the Government’s initiative to open Data Center Parks across the country as the finance minister has rightly said that ‘Data is the New Oil’. This will lead to the digitisation of the rural areas while providing various employment opportunities to the people across the country. Also, I would appreciate the use of AI & ML by the government in Aayushman Bharat Scheme to improve the healthcare services and eradicate tuberculosis in India by 2025.”Kunal Jain, Founder & CEO, Analytics Vidhya
“Tax proposals in line with government agenda of ease of compliance, reduce litigation and simplification. There is something for everyone. While personal income tax regime has been redone with a new optional scheme wherein no income tax payable for income up to Rs. 5 lakhs income, a significant reduction in tax slabs is likely to be appreciated by the public at large. Removal of DDT is a welcome step by the corporate world but it may have a mixed reaction by investors and shareholders who have been used to enjoying tax-free dividends as going forward such dividends will be taxable in their hands. Introduction of Vivaad- se- Vishwaas Scheme to reduce to direct tax litigations and shall reduce the burden on the appellate forums. Robust amendments in compliance regime with the introduction of instant PAN allotment based on Adhar and faceless appeal proceedings are likely to reduce tax harassment and fears. Overall a balanced budget with a key focus in making India a tax-friendly and growth-focused nation”Mr. Taranpreet Singh, TASS Advisors Partner.
“It’s great to see the Union Government’s focus on education. The FDI part was in waiting for a long time, glad to have it come through – it will really help us make a big leap! Online education programs, introduction of new courses that will push students into careers of tomorrow, and of course ‘the Indian SAT’ for promoting #StudyInIndia – all are in the right direction, and I am personally very excited about us at Leverage Edu helping execute some of these parts”Akshay Chaturvedi, Founder & CEO, Leverage Edu
“It was heartening to see FM Sitharaman recognise the importance of Deep Tech is driving the next wave of growth in India. From AI in Ayushman Bharat to Data Centre Parks to allocation of Quantum Tech….there was enough in that Budget for the Technology sector to be enthused about.”Dr. Pulkit Mathur, CEO, queppelin
FM’s first full Budget has something for everyone. She tried to address employment generation issues, providing access to education, emphasized on embracing tech and next-gen concepts like IoT, AI and ML. We are happy to see that the FM has kindly agreed to long pending demand from industry on ESOP, the new guidelines will certainly help startups attract good talent and reward suitably through ESOP, the ESOP guidelines will help in structuring the benefit to deserving employees. The increase in the turnover limits from Rs 25 cr to Rs 100 cr for claiming off-set on profits is a welcome announcement. It will boost cash flow situation at early-stage startups who sometimes fail before take off because of liquidity crunch. Also, by exempting companies with turnover upto Rs 5 crore, from audit, reduces compliance burden on them.Anil Joshi, Managing Partner, Unicorn India Ventures,
The Govt has also proposed a policy on early life and seed stage funding for startups to validate their business idea and run POCs, we believe, this would help grass root development and will encourage more university led IPs would good boost for innovators. However, the fine print will tell us what kind of financial support would early stage startups get in the coming months. We hope the procedure to avail these services are less complicated. Also, our industry’s demand on tax parity still remains unattended. However, we are hopeful that the govt will give it thought in time to come as we are continuously seeing the focus on startups and investors increasing in the last 5 years. Overall, it is a Budget with an aspiration to revive the economy from its current slowdown.
a Mumbai-based ed-tech company started in 2018.
The Union Budget 2020 has allocated over Rs One lakh crore for education and skills upgradation in India. That the focus on education and skills was well rounded and didn’t seek to push one or two top verticals like technology and management streams was especially promising. The FM focused on providing access to education for people from underserved and poor sections, making technology and digital formats the delivery mechanisms. Further, in order to open up employment opportunities the creation of initiatives such as one-year long internships and apprenticeships for. Clearly, the idea is to use technology to reach more young people, provide access to education, and empower them to land in-demand jobs.Kavita Mehta, Founder & CEO, Caymus Tech Ventures,
It is encouraging to see announcements like New Education Policy, financing the education system to attract top talent, online degree courses, bridge courses for support staff, and making India a global education hub. The Government recognizes the urgency with which the world’s largest working age population needs to upskill in order to have a positive impact on society and the economy. FM’s repeated emphasis to deliver education through portals, designing of new courses and providing viability gap funding for colleges and State Government, will help meet aspirations of young Indians who are comfortable using technology to educate and upskill themselves.
Good move in terms of taxation on startups. All startups are looking at the road towards profitability and deploying that back into the company to expand thereby increasing employment. Increasing the revenue limit to Rs 100 crore and duration to 10 year, a great move forward. The other key aspect is ESOPs. Employees who come on board with ESOPs and build a company along with the founders. It has been a long-standing demand to tax them only at the realisation of ESOPs. The proposed deferred payment of 5 years in tax liability will ensure people get what they deserve and also encash at the first potential opportunity. This would excite them to be part of startups and increase the importance of ESOPs. This would also encourage more employees to participate in the program. Moreover, this would also help more liquidity in the market as the transactions would take place. A win-win for startups and its team.
Jobs generation across the spectrum was also a key point in the Budget speech. There is a need to generate both blue and white-collar jobs for the Country’s youth. While on one hand setting up of online degree courses and internships would give a boost to the education sector, we believe that the infrastructure sector which is set to see massive govt-funded projects being rolled out would generate jobs for grey and blue-collar workers. We work closely with the National Skill Development agency and would be awaiting keenly for a detailed plan to employ youth in construction, operation and maintenance of infrastructure being built in the Country. Furthermore, we find the proposal to design bridge courses for nurses, caregivers and paramedical staff for postings abroad quite promising for the semi-skilled sector. The Ministry should take a leaf out of this and see if the same can also be implemented in India as we see demand for such roles also growing rapidly in the domestic market too.Pravin Agarwala, Co-founder & CEO, Betterplace,
“It is a progressive budget with a clear push towards the socio-economic growth of the country with a focus on consumption push, MSMEs and enhanced digital connectivity. The budget touched upon almost every stratum of society with the aim of bringing greater ease of living for the citizens.
There is a visible thrust for a digital solution and emerging technologies such as AI, machine learning and data analytics, with the budget highlighting that India’s new economy is based on innovation.
Further, we welcome the government’s proposal to provide digital connectivity to 1 lakh gram panchayats. We hope that the convenience, ease, and speed of digital transactions is extended to the remotest village. Such measures shall create germane ground for decentralization of innovation and democratization of data led services.”Uday Somayajula, Co-Founder, ePayLater
“This year’s budget lays down several progressive measures. As the Finance Minister proposes to ease the tax burden of ESOP on employees by deferring the tax payment by 5 years, I am positive about this move and welcome the introduction of ESOP at a larger level. I hope this would result in attracting world-class talent while keeping employee costs in check. As sovereign funds have been an important funding source for startups in India, I am happy that there has been an exemption of 100% for these funds on interest payments. I believe this move will further attract more foreign funding into the startup ecosystem.
The personal income tax rates that have been slashed are interesting, as these new slab introductions and an increase in the income limit for the existing slab will immensely help address the low consumer spending and boost savings and investments for an individual.
Additionally, it’s a proud moment for entrepreneurs like us as the Finance Minister quotes us as the ‘strength of India’. Overall, we believe that this is going to give a boost to the entire startup ecosystem as the Union Budget 2020 proposes slew measures to ensure ease of doing business for Indian startups, including seed fund to support early-stage startups and investment clearance and advisory cell for entrepreneurs, among other measures”Shubh Bansal, Co-Founder, Truebil
The Budget 2020 was expected to perform a balancing act between agriculture, manufacturing and technology sector — the key drivers of the economy. We believe FM did justice to all 3 by announcing forward-looking programs and initiatives. For a global technology player like us, setting up of data parks in India is a welcome move as this will ensure enhanced data safety because servers and allied infrastructure is likely to be hosted in India, globally benchmarked practices of data encryption will ensure that customers’ data is not misused or profited from as the momentum around Data Protection Law gathers steam. This may just be a pre-cursor to that. While we await for the finer print, programs like Knowledge Clusters should help younger tech companies in securing their IP and safeguarding their core product codes. It will also motivate them to apply AI, ML and deep tech for more refined solutions of existing problems in the Country.Kalpit Jain, Group CEO, Netcore Solutions,
“We appreciate the government’s decision in the 2020 Budget to dedicate the necessary funds and resources towards developing revolutionary and breakthrough technologies such as ML, robotics and AI to further the skills that will prepare us for the next wave and accelerate India’s journey towards becoming a digital giant. With data equated as the new oil, the government’s plan of building cutting-edge data parks across the country is equally important. Furthermore, the governments initiative of allocating Rs 6000 crores to enable unabridged digital connectivity in over 100,000 Gram Panchayats through the Fiber to Home BharatNet scheme holds brilliant potential in securing India’s passage towards achieving tech-empowerment for the remote sector.”Suganthi Shivkumar, Managing Director, ASEAN, India & Korea at Qlik
“Budget 2020 looks very promising. We are particularly enthused about the FM’s announcement of seamless delivery of digital services as part of the next wave of digital revolution. AI, ML, Analytics, IoT, Robotics are making giant inroads in India, as was observed in the budget. The policy being introduced to build data centre parks throughout the country will help enhance the digital infrastructure to a significant extent. We are looking forward to the next phase of Digital India which will be a big growth driver for businesses and individuals alike.”Rahul Sharma, MD-India, LogMeIn
“The government has highlighted the role of digital technologies like analytics, IoT, AI, and quantum technology during this Budget Session. The burgeoning digital infrastructure of India needs a strong cybersecurity framework to support it. Now, since it has allocated Rs. 99,300 crores to the education sector and Rs. 3,000 crores for skill development itself, a good way to realize India’s digital vision could be by working on the cybersecurity front from the very beginning. The government may want to cover its tech initiatives with avant-garde simulation-based cybersecurity training platforms like Cyber Range for proposed cyber forensic university and Skill India campaign. This will help India in generating millions of jobs for the youth and also strengthening national security”Mr. Rakesh Kharwal, Managing Director, India/South Asia & ASEAN, Cyberbit
“At TCL, we believe that the Finance Minister has announced an encouraging Union Budget 2020. Proposing the scheme to encourage the manufacturing of mobile phones, semiconductor packaging and electronic equipment is a welcomed move and we look forward to a complete policy and leveraging the same to kickstart the domestic manufacturing through our panel factory in Tirupati. Furthermore, painting a futuristic picture in this year’s budget announcement, the FM also acknowledged advanced technologies like IoT, AI, and analytics changing the world. At TCL, we are forever committed to advancing our ‘AI x IoT’ ecosystem in India and will continue to invest in cutting-edge technologies to offer the best services to our customers in India.”Mr.Mike Chen, Managing Director India
“As digitization and advanced technologies continue to gain momentum, we welcome the Budget 2020 announcements. Once again, the Finance Minister’s emphasis on machine learning, robotics, AI and IoT will help boost India’s digital journey. A significant proportion from the allocation of INR 3000cr for skill development should focus on these cutting-edge technologies. We are also delighted to witness proposals such as the linking of 100,000 Gram Panchayats through the enhancement of Bharat Net and setting up of data centre parks across the country. As national systems become more sophisticated and our workforce is equipped with the relevant skills, we will truly see the next wave of digital revolution, with greater scope for large-scale indigenous innovation.”Mr. Aakrit Vaish, CEO, Haptik
“It’s very encouraging to see that Indian Government regards entrepreneurship as “strength of India”. Start-ups can not only get a lot of foreign investment in India but also create thousands of jobs. The investment clearance and advisory cell for entrepreneurs is a great step to encourage new entrepreneurs and provide assistance. Moreover, the seed fund to support early-stage start-ups will help them to create quality market fit product before approaching VCs.”Mr. Piyush Kumar, Founder & CEO, Rooter
“For cyber forensics University – One major step announced by the FM involved the proposal for establishing a national forensic university and cyber forensic university. With cyber crimes increasing at a rapid rate, the need for cyber forensics has become more important than ever for a rapidly digitising country like India. The setting up of a cyber forensics university is a welcome move from the Government. This will definitely help in improving India’s expertise to solve complex cybercrimes.”Mr. Sanjay Katkar, Joint Managing Director and Chief Technology Officer, Quick Heal Technologies Limited
“FM’s proposal of delaying tax collection on the exercise of ESOPs is a welcome move. The current structure looks to collect taxes too early causing employees to not exercise vested shares. Easing direct taxation for eligible startups will encourage businesses to chase the right metrics and not just growth at the by bleeding money. The definition of “eligible startups” must be broadened to bring more companies in this fold.”Mr Yashash Agarwal, CEO, Gamezop
“The Union Budget 2020 paints an affirmative picture for the future. We are glad that the Finance Minister has emphasised on improving the air quality, citing that the matter of clean air is a matter of concern in large cities that have a population of over 1 million. To the same end, we believe that EV-powered everyday commuting solutions offered by Zypp through Electric Scooters and Logistics solutions will play a crucial role in times to come. The budget announcement further comprises positive news for India’s fast-growing start-ups. The proposal to set-up investment clearance cell for entrepreneurs along with assistance in funding would definitely prove to be extremely beneficial. Furthermore, increasing the threshold of start-ups eligible for tax deduction from an annual turnover of 25Cr to now up to 100Cr is another welcomed move. The FM has also increased the window for such start-ups to claim a tax deduction for 3 years out of 10 years now as compared to 7 years previously. Owing to the same, the start-ups will find it easier to take risks and not be burdened financially while pursuing trailblazing innovations. Deferring ESOPs for start-up employees is another affirmative move, giving employees of start-ups to postpone taxation for 5 years or whenever they exit the venture, whichever is earlier.”Mr. Akash Gupta, Founder and CEO – Zypp (Earlier known as Mobycy)
“This year’s budget includes a number of positive reforms for the surveillance and security agency. The government has announced the launch of Police Academy and Forensic Sciences, 5 more smart cities, 9,000 KMs of economic corridor, enhancement of tourist attractions, and improved business landscape for MSMEs alongside others. Security and Surveillance infrastructure is a core element of all of these reforms and will give a strong stimulus to the segment.”Abhishek Kumar, Regional Director, Onvu Tech
“The government has announced a number of measures for the education sector with a whopping Rs. 99,300 crore budget. With it, courses will go online soon and Top-100 NIRF Ranked Institutes start offering them. The government has also announced positive reforms including Asian-African ‘Study in India’ program, establishment of Police Academy and Forensic Science, and integration of medical institutes with dist. hospitals. Rs. 3000 crores have further been allocated for Skill Development. Perhaps, all of these reforms will go a long way by including video-analytics-based EdTech solutions to them as well.”Abhishek Kumar, Regional Director, Onvu Tech
“At CloudConnect, we wholeheartedly believe that the progress of the country lies in creating more opportunities for start-up owners. Thus, we duly welcome the decisions taken by FM Nirmala Sitharaman through the Union Budget 2020. She has rightly mentioned that entrepreneurship is the true spirit of India and has been its strength. We appreciate the government’s emphasis on promoting cutting-edge technologies such as machine learning, robotics and AI in India. The commitment to tech-advancement to support entrepreneurship is evident in the government’s decision of building data center parks throughout the country and proposing INR 8,000Cr for over 5 years for the National Mission of Quantum Technology and Application. Finally, the setting up of investment clearance cells and portals for entrepreneurs in order to assist them in funding will give a significant boost to entrepreneurship in India.”Raman Singh, Chief revenue officer, Cloud Connect
“Much needed focus on agriculture and allied sectors which should give a boost to the rural economy and hopefully lead to higher spending as farmers’ incomes rise. The emphasis given to infrastructure is another positive that will improve our economic foundations and drive productivity. The tax breaks given to SWFs to invest in Indian infrastructure will give a fillip to inbound investment flows in this area.
The government has also reiterated its commitment to the disinvestment programme with the announcement of IDBI divestment and LIC IPO. Having made all of these positive points, I must highlight that ultimately a recovery in bank lending, which has not yet been forthcoming, is a must in order to get the economy moving at top speed again”Bhupinder Singh, CEO & Founder, Incred
The Budget every year rides on massive expectations from the salaried class, corporates, MSME and startups. For the last few years, startups, tech, VC investments, govt aided funding started finding regular mentions but fund allocation to these areas were never eye-popping. But FM gave us a pleasant surprise by announcing Rs 8,000 crore on National Mission on Quantum Technologies and Applications. For companies like ours in cybersecurity space, it is a good move if it becomes a model for creating a replicable cyber forensics setup. Today each state has its own setup and there are some universities that have build out capabilities, but there is no standardization. With increased cyberattacks, the need for a national capability to identify the perpetrators and supporting law enforcement would be welcome. Devil lies in detail, though, so we will need to understand these initiatives once the fine print is available. Having said that, Startups are finding quite a bit of mention in the budget, making them a key part of the growth strategy. We are happy to see that the representations done by the startup ecosystem seem to have found resonance in the budget.Pankit Desai, Co-founder CEO, Sequretek,
“This is a very strong Budget in terms of focus on fundamentals. It has focused on agriculture, simplifying tax structures, infrastructure, and on self-reliance for the long term. The Hon’ FM has tried to create a level playing field by going to markets for fundraising rather than through the tax route. The continued emphasis on technology will help in the coming years to ensure ease of business, transparency and better compliances by all stakeholders. With tax rates reduced on the existing tax slabs, consumers will have more to spend. We are happy that e-commerce was today defined for the first time in the Budget and we look forward to policy initiatives on new-age business formats. With tax-deferred on ESOP and early-stage fund for start-ups, we feel this Government has good intentions to ensure that technology and knowledge-based entrepreneurship is encouraged in our country,Mr. Rajan Sharma, Founder & CEO, excess2sell.com.
“With today’s union budget themed around three strong aspects- Aspirational India, Economic Development and Caring Society, the Government of India has reassured its promise in promoting the Indian startup ecosystem for a vibrant and inclusive economy. The proposals aimed at bringing fundamental structural reforms and digital governance such as setting up investment advisory cell online to help young entrepreneurs with faster clearance and launch of seed fund to support early-stage startups come as a major booster for the sector. The decision to relax much-awaited Esops is a laudable move which will now help startups to attract new talent pool. Additionally, the allocation of 3000 crore for development of skill India programme testifies the government’s urge to embrace the proliferation of future-readying technologies- Analytics, IoT, AI Quantum Computing and so on among rural youths to make them part of digital India. Also, the government’s step to mandate aadhaar-based verification on indirect taxes would certainly widen lucrative business opportunities for companies like us operating in the area of digital signing and verification management.”Mr. Naveen Chava, CEO, IDSign
“The government’s intent to rollout a policy to enable private sector to build data center parks throughout the country is a welcome move. We believe this is in view of government’s efforts to push data localization as data will be one of the key drivers of economy. Localized data centers which can be accessed and controlled from a centralized system will significantly improve data privacy and security allowing free flow of data within borders. We at Schneider Electric shall be happy to partner with the government in furthering this initiative.”Venkatraman Swaminathan, Vice President & Country General Manager at Schneider Electric IT Business India.
“As per Union Budget 2020, the allocation of INR 6,000 Crores for BharatNet to digitize 1 lakh gram panchayats is a step towards making India digitally more connected. These new initiatives will help improve telecom and internet services in rural and remote regions of India. Digital India initiative will see a new wave as citizens in deeper pockets will gain further access to services like e-governance, e-health, e-education, and e-banking amongst others. In addition, the announcement of allowing private sector set up data center parks across the country will help in data localization and protection. We welcome the government’s decision in announcing additional Smart cities in building a robust digital infrastructure. This also aligns with the Internet of Things (IoT) taking over the lives as automation has made lives simpler and buildings smarter. Schneider Electric is committed towards working hand in hand with the government of India in this digital transformation journey.”Sanjay Sudhakaran, Vice President – Digital Energy, Greater India Zone at Schneider Electric.
“The proposal to allow deposit insurance and credit guarantee corporation to increase deposit insurance coverage to Rs. 5 lakh per depositor compared to the present Rs. 1 lakh is extremely significant, as it will increase trust in banking. The reduction in the NBFC Eligibility for SARFAESI Act to Rs 100 crore from Rs 500 crore AUM will boost the confidence among small NBFCs and reduce the cost of borrowing for MSMEs. The proposal to allow NBFCs to extend invoice financing to MSMEs will boost productivity in the sector.”Mr Shachindra Nath, Executive chairman at UGRO Capital.
“The fake invoices being issued in GST Regime has become a big headache for the Government and to punish such errant taxpayers the budget proposes hefty penalty equivalent to the aggregate amount of fake invoices issued or transactions omitted. The budget also proposes to levy equal amount of penalties on the person who has received or miss used to take input tax credit. These stringent provisions will definitely weed out the black sheep from the system. GST is also being strengthened to bring in transparency and weed out the errant taxpayers by way of stringent penalties and at the same time simplifying the return filing process and implementing e-invoicing.””It is really a welcome move by allowing the NBFCs to finance the invoices of MSMEs through TReDs, this will really help the cash starved MSMEs for funds and most of them are in the unorganised sector, financing through the NBFCs will give easy access for funds.”CMA B Mallikarjun Gupta – Chief Taxologist, Logo Infosoft
“It was heartening to see a continued thrust by the finance ministry on facilitating funding for MSMEs and focus on solving the problem of delayed corporate payments for small businesses.
The MSME sector controls more than 40% of industrial production in India. The subordinate debt, introduced in the budget will ease the working capital woes faced by MSME without interfering with the existing exposure of banks. Augmentation of CGTMSE fund will further enhance the lending capabilities of financial institutions thereby reducing the working capital gap.
Secondly, idea of an app based invoice financing product strikes the right chord and will infuse liquidity in the supply chains of corporates while making cash flow available to MSMEs. While we await the details, such a product will definitely benefit the “longer tail” vendors in the services sector.
Lastly, as representatives of fintech sector which has close to 2500 new businesses, reforms for startups is heartening. Digital platform for IPR will safeguard new ideas and will encourage more innovation. Similarly, the tax reforms on ESOPS is a big move and should help a new business attract better talent.”Anurag Jain -Co-founder, KredX & Founding Member, Digital Lenders Association of India (DLAI)
“The proposal to allow top universities grant online degrees at par with the traditional degrees is a welcome step in the right direction. Advancing technology is opening up avenues to provide high quality education to every nook and corner. This would bridge the gap between formal education (school and colleges) and the informal education (test-prep, supplementary and career programs).”Amit Bansal – Founder & CEO, WizKlub