Which sectors may very well be on precedence in Budget 2021?

Written by Arvind Sharma
The Covid-19 pandemic has adversely affected all financial sectors, and all are pinning their hopes on the upcoming Union Budget to revive their operations and get again to normalcy. No doubt, 2020 has been an distinctive yr, with thousands and thousands staying at house, extended restrictions on human motion and thousands and thousands getting pushed beneath the poverty line. Thankfully, the Government of India instantly swung into motion in May 2020 to announce a slew of measures to help companies, and individuals are anticipating additional long-term sustainable reforms within the upcoming funds.
However, owing to their distinct capabilities and being related right now, the web and digital sectors resembling Edu-tech, gaming, tele-medicine, fin-tech, and over-the-top (OTT) platforms have seen a large surge of their revenues resulting from web and smartphone penetration within the tier-2 and tier-3 cities. More importantly, the position of pharma and healthcare sector in coping with the Covid-19 pandemic has been exceptional proper from day one of many pandemic until immediately – for example, operating consciousness packages, offering therapy, and conducting the vaccine drive.
The upcoming Budget bulletins could not fulfill the expectations of all financial segments and, within the context, it might be famous that tax revenues have additionally taken a success. The authorities must undertake a thoughtful method to make sure environment friendly utilisation of sources by figuring out precedence sectors and addressing the calls for of a number of stakeholders/sectors. The pharma and healthcare sector would be the precedence sector in allocating funds, and the profitable implementation of the Covid-19 vaccination drive can have an enormous financial affect in 2021.
India is a consumption-driven financial system, and the theme of the funds must be to supply impetus to demand and re-start the financial engine. It is notable that we’ve already taken steps to spice up home capabilities for key sectors by launching ‘Production Linked Incentive’ schemes, and measures for cost-efficient manufacturing, elevated infrastructure spending, and tax rebates throughout sectors are anticipated to place the financial system again on progress observe.

There is much more to do within the infrastructure sector, particularly in roads, railways, ports, airports, energy, and key and well timed reforms in these sectors would appeal to non-public gamers, and enhance competitors and effectivity. Schemes resembling Atmanirbhar Bharat and Make in India will go a great distance in boosting our home capabilities and making certain self-sufficiency throughout sectors, and I’m certain extra long-term and applicable stimulus packages will likely be introduced within the upcoming funds.
It is estimated that greater than 50 per cent of India’s workforce is self-employed, which signifies that a minimize in tax charges for center and lower-mid revenue teams would act as a lifeline for the plenty and assist them cope up with the financial state of affairs. On the GST facet as properly, there’s a nice potential for the federal government to spur demand and drive progress. Many companies would want to avail skilled providers to revive their enterprise, and subsequently, a selected demand has been to cut back the GST on skilled taxes from 18 per cent to five per cent. Though it will adversely have an effect on authorities revenues within the quick run, the mentioned rationalisation will act as a lifeline for lakhs of companies, and would pay wealthy dividends within the long-run.
Internet is among the largest forces, and we’ve seen the ability of the web eco-system and digital know-how in pandemic occasions. Digital technology-based purposes have seen elevated acceptance, and efforts must be made to strengthen safety techniques to forestall any cyber-attacks, knowledge violations, and phishing frauds. Further, it is very important realise that start-ups are permeating into all business segments, and have immense potential to empower companies and speed up progress, and key measures are anticipated to spice up the start-up and digital eco-system. The edu-tech sector has seen huge acceptance in current occasions, and has the potential to supply high quality training at inexpensive charges. More sops are anticipated on this sector too.
Massive investments are wanted within the data know-how and low-cost manufacturing segments. This will clear up the twin downside of financial progress and unemployment. India ought to goal to develop into a hub for electronics, vehicles, and the like.
We want novel concepts to cope with the results of the Covid-19 pandemic, and the upcoming funds can’t be in comparison with some other. I hope this funds will likely be path-breaking and can stay as much as the expectations of many.
Arvind Sharma is the associate at General Corporate, Shardul Amarchand Mangaldas & Co.
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