Here is a collection of expectations of industry captains across a broad spectrum of industries, from the upcoming Union Budget 2021-22 that is proposed for presentation on February 1, 2021.
Spurring real estate demand
“The forthcoming Budget 2021 will be crucial in terms of reforms announced, and we expect that the government will take appropriate measures to spur real estate demand such as tax deductions, reduction in GST rates on construction materials, RERA to considering multiple tower projects as an ongoing venture till the completion, Repo rate deduction etc., which will in turn propel the elevator industry growth. Apart from this, we expect a significant infrastructure push from the government.”
—Manish Mehan, CEO & MD, thyssenkrupp Elevator (India)
Unlocking energy-efficiency potential
While the Government continues to focus on promoting renewable sources of energy on the supply side, we still have a tremendous untapped opportunity for wide scale adoption of technology driven energy efficiency interventions, which can play an important role in managing the demand side. Reduction of energy consumption can directly contribute to the fiscal deficit targets in a meaningful way, while at the same time contributing to the long term social and environmental goals. We would like to see some announcements like incentives, promotions and awareness programs for the corporate sector promoting direct adoption of energy efficiency investments, which may help unlock the nation’s energy efficiency potentials. We are also expecting to see further simplification of the GST compliance requirements, especially for small and medium size businesses. Freeing up the entrepreneur’s bandwidth will help the small business and traders put in more fire behind the growth engine.
—Gaurav Burman, APAC President, 75F
Restoration of “Investment Allowance”
“The Union Budget 2021 will be crucial for the revival of the Indian manufacturing sector that is recovering from the impact of the pandemic. We hope the budget addresses some very critical fiscal measures like reintroduction of ‘Investment Allowance’. Allow a higher depreciation at 25 per cent on indigenous capital goods and restore weighted deduction incentives on R&D expenditure. Also important is the reactivation of the ‘Credit-Linked Capital Subsidy Scheme’ with an enhanced limit of Rs.2 crore and rollout of schemes like MUDRA, to refinance support to banks, MFIs and NBFCs for lending to micro units having loan requirement up to Rs.5 lakh for purchase of conventional machines/equipment.”
—V. Anbu, Director General, Indian Machine Tool Manufacturers’ Association
Need for structural reforms
“The government has taken multiple steps to make energy sector more mainstream and affordable. The upcoming Union Budget 2021 should focus on structural reforms required in the sector and expansion of public-private partnership as a key mode for expanding infrastructure development. The upcoming Budget should also focus on areas such as import duties, taxation, R&D, technology and affordability etc. for it to assume long-term significance. There is a massive need for resilience planning in the power sector to manage and mitigate the impact of an event such as COVID in the future.”
—Ratul Puri, Chairman, Hindustan Power.
Large-scale reforms in RE infrastructure
“To achieve the vision of Atmanirbhar Bharat and to build 450 GW capacity of RE by 2030, the 2021 Budget should focus on supportive measures, given the criticality of the power sector for the economic growth. Since, the renewable energy sector grew at a much-reduced pace last year due to the Covid pandemic, the focus needs to be on large scale reform in the sector, with privatization and competition being two key themes for the reform. Furthermore, higher allocation for rural electrification, development of renewable energy infrastructure, improving tariff competitiveness and policy thrust will be essential for capacity addition.”
—Yogesh Mudras, Managing Director, Informa Markets in India
Solar industry needs boost
“To give a boost to India’s solar industry, the budget should focus on addressing the challenges of investors and consumers and also giving a financial boost to make it future-ready. Government policies should, therefore, provide synergy to further expedite the growth of the industry by doing the following: (i) renewables to be covered under priority sector lending with competitive interest rates (ii) bid bond/PBG requirements to be removed from Central and State bids as industry has matured (iii) provide positive synergy to renewable industry by removing anomalies in indirect tax laws and providing composite rate of GST at concessional 5%, expediting eligible refunds due under current inverted duty structure (iv) duty exemptions on import of modules to be extended to ensure there is no demand-supply mismatch.”
—S.K. Gupta, CFO, Amp Energy India
More FDI in manufacturing
As India moves ahead on its growth trajectory, with partial recovery from COVID-19 already happening, a strong impetus through the Union Budget-2021 is crucial. Sustained investment in Infrastructure by the government, constant effort to introduce FDI in manufacturing including electronic components and sub-assemblies, and conscious support for the real estate developers through priority lending; all of these will assist in stimulating the economy, which is still largely dependent on home demand. Also, commodity prices in the past 8 months have gone out of control and are unpredictable. It is expected that some strict measures are taken to diffuse such situations in the near future as it leads to dilution of business confidence. Also, while the 100 smart cities project has taken a shape across India, it’s time for the government to push more aggressively for modern city infrastructure. This will attract more talent and boost investment across all cities in India.
—Dinesh Aggarwal, Joint Managing Director, Panasonic Life Solutions India Pvt Ltd
Clarity on duty structure
“We hope that the Union Budget 2021 offers clarity and immediate implementation of the basic customs duty on solar cells and modules. In line with Atmanirbhar Bharat, similar safeguard duty and anti-dumping duty need to be applied to auxiliary companies that supply raw materials to bolster the domestic solar industry and the ecosystem, ensuring a cost-competitive industry. The solar manufacturing industry is also eagerly awaiting the PLI (Production Linked Incentive) scheme for high efficiency modules to come into effect. If these policies are refined and implemented, we believe that the budget can prove instrumental in realizing India’s ambitious target of 450 GW by 2030.”
—Bharat Bhut, Co-Founder & Director, Goldi Solar
More investment in innovation and technology
The finance minister should put into place a comprehensive policy and regulatory framework to encourage firms to invest more in innovation and technology with the larger objective of bringing about a transformation in the power sector. The skewed tariffs of downstream distribution utilities should be rationalised vis-à-vis the cost structure to optimise cross-subsidy and create competitiveness in the industry. Measures to facilitate timely payments from states to upstream utilities will take care of cash flow constraints. We also expect the finance minister to incentivise investments in R&D in renewables and storage technologies. The government should also create a robust ecosystem for indigenous solar manufacturing through allocation of more funds, extension of financial assistance on term loans, upfront central financial assistance on CAPEX and exemptions in basic custom duty to units in Special Economic Zones to realise its vision of Atmanirbhar Bharat.
—Hartek Singh, CMD, Hartek Group
Strengthening the crucial MSME sector
The government has been paying a lot of attention towards MSME, as the sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades. MSMEs not only play crucial role in providing large employment opportunities but also help in industrialization of rural & backward areas, and hence we are hopeful that our honourable finance minister will announce awaited reforms and allocation of resources to help the sector achieve more growth at the grassroot level. Also implementation of Smart City projects should be expedited to boost the economy and all various pending projects should be cleared immediately.
—Udaya Bhaskar Rao Abburu, CEO & Managing Director, iRAM Technologies
Solar sector needs cost competitiveness
“While the solar sector in India has shown a steady rise in the last couple of years, the upcoming Union Budget is crucial owing to the slowdown caused due to the pandemic. The industry requires a robust policy framework to aid financial support and incentivize domestic investments to make the sector cost competitive. Also, we expect the government to introduce well-rounded financing mechanisms so that the rate of interest on solar projects by national banks is on par with those of developed nations. Implementation of timely reimbursements and refunds of VAT and SGST will relieve tax burden on the cost intensive sector caused due to the introduction of GST law. In addition to this, corporates must also be educated about the benefits of transition to sustainable energy.”
—Imaan Javan, Director of Operations, Suntuity REI
Scaling up domestic solar capabilities
“As we inch towards the Union Budget, we are hopeful of targeted initiatives and policies for scaling-up the domestic solar manufacturing aligned to the 450 GW renewables by 2030 target. There is an immediate need to build a robust eco-system for indigenous solar manufacturing and making it cost-competitive to achieve the government’s vision of Aatmanirbhar Bharat. We need a comprehensive policy framework encompassing both tariff and non-tariff barriers, long term financial support and direct incentives to make the domestic solar industry cost-competitive. The finance ministry should consider 5 per cent interest subvention on term loan and working capital, upfront Central Financial Assistance of 30 per cent on capex, increase export incentive from 2 per cent to 8 per cent, which will aid indigenous solar manufacturing.
—Saibaba Vutukuri, CEO, Vikram Solar
