1643714604_U9H8c6_budget_490251524_INDIAPICTUREBUDGET.jpg 
Here is how the corporate sector reacted to the Union Budget announcement made by Finance Minister Nirmala Sitharaman
Photo Credit : India Picture
Finance Minister Nirmala Sitharaman on 1 February presented her fourth Union Budget for the financial year 2022-23. As per the FM, this budget will lay the foundation for economic growth through public investment as Asia's third-largest economy emerges from a pandemic-induced slump.
"The touchstone of the master plan will be world-class, modern infrastructure and logistics synergy among different modes of movement of both people and goods, and location of projects," Sitharaman said.
Here is how the corporate sector reacted to the Union Budget announcement made by Finance Minister Nirmala Sitharaman:
Nilesh Shah, Group President & MD, Kotak Mahindra Asset Management
"This budget is focussed on supporting growth through encouraging investments and encouraging entrepreneurs, starts ups and tax payers by creating trust.
Capital expenditure has moved from 12% of budget in FY 15 to 19% of budget in FY 23. Revenue Receipt growth at 6% is significantly lower than 27% last year. This is driven by significantly lower divestment and asset Monetization target. Hopefully there is an upside on revenue receipts.
This budget is about laying the foundation for the positioning of centenary of India. 68% of defense capital allocation to local manufacturers, launch of CBDC, focus on organic farming and environmental issues / climate change, developing logistics in India, digital banks and futuristic policies like battery swapping or inter operatibility standards etc will be the building blocks."
S Ravi, Former Chairman of BSE and Founder & Managing Partner of Ravi Rajan & Co.
The union budget is a growth oriented budget focusing on rural infrastructure, cooperative societies and improving connectivity through PM Gati Yojana. Gati Sakthi would really catalyse the growth. Reduction of MAT and surcharge for cooperatives is a welcome step. Laying down of optic Fiber in villages and rural India is a step to unifying urban with rural India. Agriculture tools would be cheaper which is a very good step for farmers.
This budget also clarifies about government’s stand on crypto currency by stating that digital currency would be part of the economy from the year 22 -23. Taxing of crypto transactions including gifting to the extent of 30% of income is a Very significant step.This step actually gives a way forward for the crypto industry.
The budget focuses on Agro Tech digitalisation &climate action. Increase in Capex would help in promoting manufacturing.extending the ECLGS scheme up to 5 lac crores is primarily motivated to mitigate the suffering of the industry.
State Government will get additional 1 lac crore interest free loan. State Government employees will get higher deduction of 14% for Nps.
The budget does not otherwise touch individual taxation. This budget basically focuses on Atmanirbhar Bharat and looks primarily to speed up the GDP growth
Prashant Ruia, Director, Essar Capital
“A blueprint budget with a nice touch of green! A bold one with a massive hike in public investment will be the booster dose to restart corporate investments. The infrastructure allocation with a focus on technology will generate employment & help transform tomorrow!
Akash Sinha, CEO & Co-Founder, Cashfree Payments
“Budget 2022 is a reflection of consumers' trust in digital-first approach to banking & finance. Economic Survey 2022 highlighted that UPI is currently the single most extensive retail payment system by volume, reiterating its wide acceptance. This has contributed immensely towards driving digital transformation in the country. Additionally, the idea of setting up digital banking units in multiple districts will help in the homogenisation of the financial services in rural and semi-urban geographies. The launch of digital currency by RBI is both encouraging and critical in empowering the digital native youth to take a transformational leap from the conventional currency tools. We have witnessed an increasing use of blockchain technology to simplify and secure the consumer’s journey, and this push was required to encourage innovation in this domain. Fintechs and startups must help stakeholders establish connections with remote locations and provide value-added services to the underserved and unbanked segments.
Moreover, the 5G spectrum technology and the scheme for the penetration of fibre optics across villages will boost the growth of rural and gig economies. We also compliment the Hon’ble Finance Minister for the support extended to the startup ecosystem via reforms in taxation, incentives, investments and other benefits that will promote Make in India and Digital India initiatives. We feel that the announcements made during the budget session display the growing importance of startups and their ability to exhibit agility and purpose alike.”
Dr Ramesh Kancharla, Chairman and Managing Director, Rainbow Children’s Hospital
"We are happy with the announcement of the Digital Health Eco System which will go a long way in providing a national registry of the healthcare infrastructure of the country. This will improve transparency and information flow of key healthcare parameters across the country. Given the challenges in mental health thrown up by the pandemic, the National Tele Mental Health Programme is another welcome step.
India has managed the pandemic phenomenally. The size of the country and the demographic distribution are unique challenges that have been managed through one of the largest vaccination programmes in the world. Also the effective use of technology through the Cowin and Arogya Setu App have helped in identifying, tracing and managing Covid cases.”
Kumar Binit, Co-Founder & CEO, Finmapp
The Budget was all about growth and this can only happen with considerable increase in Capex expenditure, which the FM has increased by approx 35%. The increase in Capex expenditure directly /indirectly will lead to macro as well as micro growth of the economy.
The focus on digitization was written all over the FM’s speech as she announced Digital banking unit, which is a great step towards financial inclusion through clarity on implementation is needed. Connecting post offices to banking Infra digitally will also help tremendously in ensuring financial inclusion. The initiative will help in ensuring lesser operational headaches and low cost for the government vis a vis managing physical currency. The initiative also confirms the importance of blockchain as a technology, which a lot of companies have started implementing in various processes.
FM’s digital push is a great initiative in Education/Skill Development and Health sectors keeping in mind that the pandemic is nowhere seen as ending in near future and thus a digital push on online training and education will help a majority of population living in rural areas and the most affected ones. Physical infra for skill development / education and health ecosystem is being replaced by digital push which will help in creating more jobs.
The FM has also increased tax relief by increasing the period of incorporation by one year till March 31, 2023; we believe that 5 years would have been a much better number as startups take at least 2-3 years to become profitable.
Nishant Arora, Co-Founder, Sixth Element Finserv’s Setup Services India
In the Budget, the Government's goal was to complement macro-growth with micro-all-inclusive welfare, digital economy and fintech, tech-enabled development, energy transition and climate action. The announcement of the launching the Digital ecosystem for skilling and livelihood will lead to the growth of startups; the development of Digital universities will provide manpower to strengthen the startup ecosystem further. Another positive for the startups was an extension of the period of incorporation by one year until March 31, 2023, for tax relief. It was a balanced Budget where every sector was given due consideration with a special focus on streamlining the growth after the effects of the pandemic. Government directly venturing into blockchain shows that technology is the way to go ahead. The budget also highlighted that all startups will be promoted to facilitate ‘drone Shakti’ for the promotion of drone as a service, it is a big leap for tech startups. The new tax rule was a unique addition, wherein taxpayers can file an updated return on payment of taxes, within two years from the end of the relevant assessment year. However, corporate employees were pinning high hopes on a move like providing benefits to salaried individuals by extending standard deductions and increased allowance of medical expenditure amid the pandemic.
Sudip Bandyopadhyay Chairman Inditrade Capital
“The highlight of Budget 2022 was the way in which it laid out a blueprint for India’s digital transformation, as can be seen from its proposals for numerous facets from education to digitalization of the rupee. It completely delivered on expectations of expanding capex without taking the fiscal deficit to perilous levels. Overall, I would say it was an intelligent, innovative and very progressive budget. Now the proof of the pudding will be in the execution.”
Puneet Gupta, Managing Director & Vice President, NetApp India
“I am excited to see the government’s focus on technology sector, as a whole. The incentives towards creating digital infrastructure, education, and skilling, spell out the intent on developing the country’s human capital. The emphasis of digitised skilling will help make our country's youth future-ready. Additionally, the announcement on RBI introducing digital currency and the government providing infrastructure status to data centers, will help create a framework for emerging technologies making the digital India Inc better and stronger.”
Sunil Sharma, managing director – sales, Sophos India & SAARC
“The Union Budget 2022 presented by the Government of India is built on the foundation of introducing new technologies across sectors. From education to finance, logistics, and healthcare, the bedrock of change will be driven by tech. The Government has further proposed the introduction of the digital rupee. While this will definitely enhance efficiency and promote growth, increased digital penetration also brings with it additional cyber risks that one should be vary of. As a step towards mitigating cyberattacks, the Government plans to set up broadband in villages as well as the Digital DESH e-portal. This will help equip youth with the right skills, including cybersecurity skill sets, needed to operate safely in today’s tech-driven world.”
Dhruvil Sanghvi, Founder & Chief Executive Officer, LogiNext
“We welcome the move by the Government of India to boost logistics as a means towards ensuring economic growth. The proposal to set up a Unified Logistics Interface Platform is a welcome move. Leveraging technology to complement the development of infrastructure will help bring in better efficiency. Furthermore, with real-time tracking, and inventory management as a part of the platform, this will go a long way in bringing India at par with global supply chain networks. LogiNext has always been an advocate for digitisation of supply chains, and it is reassuring to see the Government work towards this. The decision taken to extend the tax incentives provided to startups till March 31, 2023 is a reflection of the Government’s commitment towards ease of doing business in India.”
Ambareesh Murty, Co-Founder & CEO of Pepperfry
“It is heartening to see the Government looking at economic growth not just for the next year, but the next 25 years. Budget ’22 has provided a significant outlay to infrastructure investments which will benefit supply chains. Businesses will be able to deliver products to consumers faster, seamlessly, and at better prices. At a time when work from home has become mainstream, this will enable consumers to furnish their homes to their taste and evolving requirements without burning a hole in their pockets.”
Kunal Nagarkatti, CEO, Clover Infotech
“The Government’s focus on creating a strong digital ecosystem to enhance banking and financial inclusion is a step in the right direction. Bringing all post office banks under the core banking ambit will enable seamlessness in digital payments and online transfer of funds and accelerate financial inclusion. The setting up of the Digital DESH e-portal for skilling initiatives is the need of the hour as it will bridge the gap between the supply and demand for digitally skilled and technically strong resources.”
Niraj Hutheesing, Founder and Managing Director, Cygnet Infotech
“The advancement in enhanced transparency of payments is a huge stride forward for India in terms of fintech innovation. The proposed end-to-end online e-Bill system will enable increased productivity for industries that go completely paperless. This will prove to be extremely fruitful for digitization. Furthermore, the acknowledgement that India's GST collection stands at Rs.1.4 lakh crore for the month of January 2022, exemplifies the growing need for digital taxation solutions that promise to take the Indian economy to the next level.”
Mohit Nirula, CEO, Columbia Pacific Communities
The Union Budget for 2022 announced by Hon’ble Finance Minister Ms. Nirmala Sitharaman would prima facie disappoint many.
As a creator of and service provider to senior living communities, we are disappointed that none of the initiatives announced bring succour to the demographic we serve – senior citizens.
There were no announcements about making homes in senior living communities more affordable or any rationalisation of the high 18% GST levied even as the collection for January 2022 touched a record high.
That said, over the past many decades, we have gotten used to what can best be described as “tinkering” of the direct and indirect tax structure, or impex subsidies, which are industry specific. But while these measures were welcomed on news channels and by the sentiment-driven stock market, they make no real impact in the long run.
This budget, on the other hand, coming as it does at the end of two years of the economy being severely affected by COVID – 19 has taken a more strategic view of the economy with increased investment in infrastructure. The government, while juggling with its own fiscal responsibilities has maintained its focus on all-inclusive welfare initiatives. Hopefully this approach will stimulate the economy by massaging both the demand and supply side of the equation.
As with any budget, the devil is in the details, the fine print and most importantly the implementation. So for now let’s wait and watch.
Abhijit Roy, Managing Director, Berger Paints
A lot of emphasis was placed on capital expenditure which augurs well for the growth of the economy and job creation especially in the medium to long terms. The focus on green, environment friendly, sustainable as well as digital technologies is also to be appreciated. All of these fit in well with our strengths in Protective Coatings where we are the market leader and in our top end international technology based ETICS business which is capable of energy saving by 30% delivering savings for consumers and reduction in energy consumption.
Maithili Appalwar, CEO, Avana
"The Union budget announced today has addressed a lot of the needs and expectations of the agricultural centre while ensuring long term advancement. The Union Budget has introduced measures to promote and provide sustenance to the rural population of India. The initiative started by the government to converge the links of 5 major rivers will prove of utmost importance to provide irrigation in the years to come. The Union Budget has introduced a pragmatic integration of technology and agriculture by introducing Kisan drones that will be utilized for crop assessment, land records and spraying of insecticides. This amalgamation of the two sectors will highly benefit the farmers in the long run and provide a time-efficient solution for the same while spurring better opportunities and development for them."
Dr Maithili Tambe, CEO, The Academy School, Maharashtra
Two important points on education are worth highlighting in the Union Budget. First is the digital infrastructure: due to the COVID-19 pandemic outbreak, the whole education system had to shift online. Teaching every child was the biggest challenge any school could face. Through One Class, One Channel, it will become much easier to reach every child.
Second is the upgradation of Anganwadis: they are usually taken as daycare centres, but it is a base for any education system. Equal importance should be given to early childhood education as well. That said, the implementation of these measures should be effective and time-bound.
Dr. Dishan Kamdar, Vice-Chancellor, FLAME University
“The decision to establish the digital university is a disruptive and futuristic decision that will benefit a large number of students even from the remotest part of the country by making world-class education accessible. This will surely give wings to the dreams of deserving students and meet the goal of providing high-quality education to all students across the country.
The plan to increase the 'One Class One TV Channel' from 12 to 200 TV Channels in all States in India will enable students to learn through radio and DTH channels thereby overcoming the problem of internet connectivity. The two decisions truly reflect the Government’s aims to leverage technology advancements and use them as tools to meet the educational aspirations of a large number of students in the country. They have set an example that is worthy of being emulated by others.”
Rakesh Kaul, CEO, Clix Capital
“The all-time high GST collections in January 2022 at Rs 141,000 crore is good news and indicates a steady bounce back in economic activity despite the Omicron wave. The estimated GDP growth of 9.2% in FY2021-22 and the expected reduction in the fiscal deficit from 6.9% in FY2022 to 6.4% of the GDP in FY2023 also augurs well for the economy, presuming these projections hold true.
The other bright spots include the decision of extending the period of incorporation by a year for startups to avail of tax incentives till 31 March 2023, establishing 75 new digital banking units in 75 districts via scheduled commercial banks to help ensure a pan-India reach and allocating INR48,000 crore to boost urban housing, among others. These measures will benefit multiple verticals, including the BFSI segment.
The announcement of a digital rupee using blockchain is exciting per se, but one needs to wait and watch whether there will be any specific benefits for this asset class. But the 30% tax on any income from the transfer of digital assets can act as a dampener on efforts to create a virtual digital economy.
The capping of surcharge on long-term capital gains tax at 15% on transfer of any asset type is another commendable measure. Overall, the Budget should give a boost to the fintech segment.”
Akshay Mehrotra - Member at FACE and Co-Founder & CEO at EarlySalary:
This budget, with its focus on digital inclusion and using digital to increase access to finance is a welcome one. As a Digital lender, EarlySalary is delighted to participate in this democratic solution for leveraging demographic-dividend. This will mean for the middle-class India to afford products and services using responsible-credit mechanisms. As a FinTech industry player, we welcome the idea of digital banks in a few districts, as well as bringing Post Offices to the core banking system. This would be a precedent for the Digital-only-banks and could become a reality soon.
Madhusudan E - Member at FACE and Co-Founder & CEO at KreditBee:
Union Budget 2022-23 had special emphasis on Financial Inclusion, technology adoption and entrepreneurship, which is highly appreciable.
Initiatives like Desh stack e-portal and interlinking of Udyam, e-shram, NCS and Aseem portals will surely contribute to the Digital Infrastructure and entrepreneurial push.
Introduction of Central Bank Digital Currency (CBDC), leveraging blockchain technology will influence the digital transactions and hence its implementation process will be something to pay attention to. Government’s recognition of startups as the drivers of economic growth is heartening. Measures like setting up an expert committee to suggest measures to help attract investment and extension of tax incentives period for startups incorporation by 1 year, will certainly aid in creating a healthy startup ecosystem. Equally encouraging is the Government’s bid to boost digital banking and financial inclusion with initiatives like bringing 100% of 1.5 lakh post offices into the core banking system.
In a broader sense, the Finance Ministry has presented a distinctive set of measures in Union Budget 2022-23, with a streamlined focus on rapid, holistic and inclusive economic growth.
Ashish Jain - Member at FACE and CFO at LoanTap:
The budget is progressive and addresses all the major expectations from various sectors including Fintechs, EVs, MSMEs, startups, etc. Allowing an extension of tax incentive by another year will hugely benefit the newly started ventures and will motivate the players to contribute to the macro-economic growth. The FM has suggested setting up an expert committee to monitor mobilization of funds to start-ups through VCs and Private equities which is a major welcome step. The introduction of central bank digital currency will further boost the digital economy and will hugely benefit the Fintech ecosystem. With the setting up of 75 digital banking units in the next two years India is set to become a robust digital economy.