MUMBAI, 6 FEBRUARY, 2021 (GPN): Mr. Amit Vasistha, Founder and CEO of GALF says “After the world changing landmark year 2020, which saw series of mini-budgets being released in India. The nation was looking upto 2021 yearly budget to bring much needed impetus for the economic revival. I think the budget has been a reasonably enticing if not entirely and I do also think that 2021 will still see a version or two more in form of mini budgets. The reasons are clear, in the post covid scenario, the world is changing so much faster than you and i can imagine. To be having a static budget for full year will be like shooting on your own foot and not being ready for opportunities and contingencies alike. 

That said, here’s how I am simplifying for everyone’s understanding and absorption. Also this may give sense to desktop economists that the share market reaction is not unfounded. If we have to bucket the key themes of the budget then they can be summed up into: 

– Infrastructure and Capital
– Disinvestment 
– Health and Wellbeing 
– Business Accelerator (Innovation and R&D)
– Tax compliance (Minimum Government, Maximum Governance)

With 5 out of 4 key themes being money moving or simplifying the money movement, we surely think has been accepted well by markets. That said, some parts of the budget do have an obvious inclination towards certain poll bound states in 2021 and some feel lighter than anticipated policy changes needed. While the elaborate view and documents are still anticipated. The few key details of these 5 themes for everyone to appreciate are:

– Infrastructure and Capital : Continued journey of Infrastructure push is clearly visible with the allocation in Highways, Railways, Schools, Central university in Ladakh, PPP model to augment bus operations model, Allocation under capital expenditure to Department of Economic Affairs, Capital investment for development of modern fisheries, National infrastructure pipeline, Dedicated rural infra fund and Contingency fund allocation.

– Disinvestment : Tangible action oriented focus on disinvestment plan, making the intent very clear with the declaration to establish asset monitisation dashboard . Raising of the FDI to 74% in Insurance segment , Privatisation of one general insurance PSU and IPO of LIC proposed, Earmarking of the disinvestment in key PSUs , Policy for the privatisation of state-run cos and to create new list of companies for disinvestment , Recapitalisation of the private sector banks and Asset reconstruction company for stress assets of banks , Rationalisation of the centrally sponsored schemes. 

– Health and Wellbeing : Taking cognisance of focus needed in the new word order post COVID, a concerted focus on Health and Wellbeing with nearly 137% hike in the budgetary allocation. Key elements being PM Swastha Bharat Yojana with an outlay of  Rs 64,000 crores that will include support for Health and Wellness centres, setting up integrated public health labs in all districts, critical care hospital blocks, dedicated allocation for spend on COVID vaccines campaign.

– Business Accelerator : This subject can be mooted endlessly. we genuinely think that more can be done and possibly will be done in 2021 in further iterations of the budget in forms of mini-budgets. Just so that we have better understanding of the current proposals, the key initiatives that are expected to accelerate business are: Integration of more Mandis with Electronic National Market , affordable housing loans extended for one more year giving boost to the real estate sector, Decriminalisation under LLP act small company definition changed by increasing the threshold to not exceeding 2 crores, MSME loans allocation to be doubled in FY22 with proposal to reduce margin money requirement from 25% to 15%, One person company revamped and will give a sure shot boost to the startups, Earmarked fund to boost digital payments, Dedicated textile parks with loans by DFI (Development Financial Institution), Four Acts converged into Securities Market Code, Investors Charter introduced to protect investors. Not to miss out on the One Nation One Ration Card scheme rollout , very likely to touch lives of many businesses and citizens.

– Tax Compliance : Tax compliance in India has been a pain point and has directly impacted the ease of doing business. At the same time it carries a huge burden on Government to adher to less conspicuous or non rewarding tax compliance requirements. The current budget proposal aims to address some bit of them which may alter the tax-terrorism perception. Proposal to review 400 old exemptions in custom duties in FY22 , No tax returns for senior citizens above 75 years with income from pensions and interest, Income tax returns with pre-filled data from capital gains, Faceless income tax appellate tribunals , Reduced time limit for reopening of tax assessments to 3 years , Tax audit threshold in case of digital payments businesses increased to 10 crores, Dispute resolution panels for small tax payers, Advanced tax of dividends only after declaration.

Closer home at GALF, we do think that clear focus of the government on health and wellness segment is most welcoming. This will set the right tune with corporates too and likely bring in a cultural shift in the approach towards preventive health and wellness. The startup eco-system in India will greatly benefit with some dedicated fund support at the state level, a concerted involvement by leading corporates and business houses will be icing on the cake. India is on the cusp of next startup revolution. For us to create a big leap in this sigmoid a state sponsored infrastructure support will help provide an edge to the Aatmnirbhar story. ENDS