Budget 2022: Co-working spaces hope for infra push, single-window clearance

Union Budget 2022-23: There are some growing expectations and calls for change, which can further enhance the growth of this sector

Indian Union Budget 2022/ Representational image. Unsplash/Annie Spratt

With the Union Budget 2022-23 scheduled to be announced on February 1, every sector has certain hopes and expectations from it. The coworking industry is no different, particularly since the demand for such spaces has soared amidst the new normal that COVID-19 brought about.

The pandemic created an unprecedented situation for businesses across sectors all over the country. Given the COVID regulations in place and economic losses faced, a huge number of businesses have moved from a fully office-based working setup to a more hybrid working environment.

Co-working spaces were a boon here, as businesses could offer flexible working options to employees and yet have well-equipped official places to work from without having to incur high rents. This was particularly beneficial for smaller businesses as they could not afford independent working spaces with staff at low numbers. The increase in the demand for coworking offices over the last 18 months has also encouraged real estate developers to join hands with coworking operators to create more such spaces.

There are some growing expectations and calls for change, which can further enhance the growth of this sector as entrepreneurs navigate their way through the never-ending pandemic situation.

Tax benefits expected

First and foremost, with the landmark growth of the sector, there should be tax benefits given to the industry. The TDS rate applicable to coworking spaces stands at 10 percent as of now. It is expected that the Government will reduce the TDS rate such that it not only promotes market growth but also helps in the effective management of cash flow.

Reduction in registration charges, stamp duty

The co-working space industry relies heavily on early and mid-start-up companies, as they are the ones that make the maximum use of such spaces. However, expenses like registration charges and stamp duty are borne by the coworking offices at the registrar offices, and a reduction of these charges would directly benefit the end-users as they will have to spend a relatively lower amount for the services.

The industry is also hoping that there will be an infrastructural push from the Government in addition to a single-window clearance system, for it will help in the faster initiation of coworking offices in non-metropolitan cities.

According to a report published by Cushman & Wakefield, coworking operators leased 21 percent more office area in 2021, which is approximately 4.91 million square feet. This was a significant jump from the previous 4.05 million square feet. According to another report by JLL, India’s coworking space market is likely to cross 50 million square feet by 2023. This is because coworking operators will go beyond the current establishments in metro cities and expand their presence in smaller cities across the country.

These reports provide an insight into India’s co-working sector and the increase in popularity for such spaces among organizations today. As the pandemic has changed the dynamics of business, the growing need to move away from rigid, long-term office spaces to more flexible working spaces is quite clear.

Co-working spaces have provided both employees and employers with the comfort of working from workplaces near their homes. This setup matches the fundamental principle of striving companies like Google and Microsoft: increasing productivity by ensuring the comfort of employees.

Thus, it is clear that investing in the co-working space sector has a clear benefit for all. Furthermore, if the Government upholds the expectations of the coworking space sector, not only will it redefine how businesses work, but also ensure overall economic benefits. The sky is the limit for the coworking space industry in India. However, this can only be achieved with the support of the Government through the Budget 2022-23.

The author is CEO, 91Springboard-shared workspace provider. Views are personal.

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.

Budget 2022: Inclusion of oil products under GST, floor for natural gas prices would aid sector

Union Budget 2022-23: Domestic gas prices, as governed by the modified Rangarajan formula, have remained low for many years

Indian Union Budget 2022/ Representational image. AFP

Increasing demand on one hand coupled with graded increments in the production and supply on the other by OPEC+ has pushed international crude oil prices to their highest levels since 2014, currently at around $88-89/bbl as of end-January 2022. Additionally, the global upstream Capex is expected to be muted in the medium term, despite the rally in prices due to uncertainty related to long-term oil prices, a transition towards low carbon emissions, and ESG goals of large oil and gas companies.

The under-investment upstream could lead to a structural shortage of oil and gas in the future which could keep prices elevated. At higher crude oil prices, the ad-valorem cess of 20 percent limits the realisations and cash accruals of domestic upstream companies compared to the earlier fixed cess per MT. Accordingly, the upstream industry has been demanding a downward revision in cess on crude oil production to improve earnings in a high crude oil price regime.

Additionally, domestic gas prices, as governed by the modified Rangarajan formula, have remained low for many years and are at $2.90/mmbtu for H2 FY2022. At such low gas prices, gas production remains a loss-making proposition for most fields. The absence of a floor and sustained low prices as has been seen in the past few years post-implementation of the modified Rangarajan formula make exploration and production unviable even in benign geologies. Accordingly, the upstream industry has been demanding a provision of a floor for gas prices.

The Upstream oil and gas industry is characterized by high Capex requirements owing to the natural decline exhibited by oil and gas fields due to which regular Capex must be undertaken to sustain and increase production. Accordingly, one of the key demands of the upstream industry has been the exemption of exploration and development activities from the levy of GST as the latter has the impact of bloating the Capex. Further, the levy of national calamity and contingent duty (NCCD) of Rs. 50/MT on import of crude oil introduced in 2003 for one year, has remained in force since then. The industry has been demanding the removal of NCCD.

Also, the industry wants the levy of GST removed from cost petroleum, profit petroleum, and royalty as these are not payments against any service and should not be subject to GST. The incidence of GST has an adverse impact on project profitability and returns and discourages incremental investments.

The industry has also been demanding that the government clarify the eligibility to avail a tax holiday under Section 80-IB of the Act and enumerate the definition of ‘mineral oil’ to include natural gas retrospectively.

Further, the oil and gas industry has been demanding that crude oil, natural gas, and petroleum products be brought under the GST. This would enable the free flow of credits, avoid stranded taxes and reduce the burden of compliance with multiple tax laws.

To promote the use of natural gas as fuel, the industry has been demanding exempting Liquified Natural Gas (LNG) from import duty as there is a shortage of domestic gas production and nearly half the gas consumed in the country is imported. Currently, LNG attracts 2.5 percent customs duty even as crude attracts nil duty.

The author is VP and Co-Group Head-Corporate Ratings, ICRA Limited. Views are personal.

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.

Budget 2022: Allocations for port projects can expedite pace of execution

Union Budget 2022-23: Specific budgetary allocations needed for digitisation of port sector

Indian Union Budget 2022: Union finance minister Nirmala Sitharaman. Image courtesy CNBC-TV18

The Government had been focusing on improving the Port infrastructure under programs like ‘Sagarmala’, which was approved in 2015. Around 574 projects have been identified to be implemented between 2015-2035, with an estimated cost of Rs. 6.01 lakh crore, covering areas like port modernization, port connectivity, port-led industrialization, and coastal community development.

More recently, the government has come out with Maritime Vision 2030, which envisages aggressive targets to be achieved by the sector by 2030. Some of which include the development of three mega ports of greater than 300 MTPA cargo handling capacity, increasing trans-shipment cargo share from 25 percent to 75 percent, increasing share of cargo handled at major ports by PPP operators to >85 percent, and improvement in port efficiency measures.

Due to the COVID-19 pandemic, the implementation of various projects has witnessed delays and the implementation/completion in the last two years has been slow.

Further, in the last two Budgets, the announcement was made about the potential corporatisation of at least one major port along with a listing on the stock market and about seven projects worth more than Rs 2000 crore to be offered by the major ports on Public-Private Partnership. However, not much development has subsequently happened on these fronts.

Nonetheless, on the policy front, there was traction, which included operationalization of Major Port Authorities Act 2021 in November 2021, revised model concession agreement for PPP projects, and revised tariff guidelines for PPP projects announced in Dec 2021, which allows market-based tariffs.

In Budget 2022, the following measures/updates if announced should aid the port sector in achieving the planned objectives:

The projects under Sagarmala are mainly envisaged to be funded through PPP. In the past, budgetary allocations have been modest. To expedite the project implementation, any increase in budgetary allocations for the projects should be positive
Specific budgetary allocations for digitalization of port sector (including those already planned under Sagarmala)
Allocations for inland waterways and schemes to encourage coastal shipping
Update/Budgetary allocations for Mega Port Projects under MIV 2030
Any update on corporatisation of a Major Port and listing of the same initially announced in the Budget 2019-20
Any update on PPP projects at Major Ports, announced in the Budget 2020-21
Scheme/incentives to attract transshipment vessels

The budgetary measures will complement the favorable policy measures undertaken by the government in recent years and will help in achieving the broader goal of growth in domestic manufacturing and exports.

The Port sector is a critical infrastructure segment, which plays a crucial role in the country’s economic growth by ensuring better connectivity for global trade and helping in moderating the logistics cost.

The author is Assistant Vice President & Sector Head – Corporate Ratings, ICRA Limited. Views are personal.

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.

Budget 2022: MSMEs need much more than easy credit

Union Budget 2022-23: Creating an enabling, inclusive, and nurturing playing field where even the smallest of MSMEs can flourish is critical

Indian Union Budget 2022/ Representational image. Credit: CNBC-TV18

Micro and Small enterprises, who constitute the bulk of MSMEs in India, have a very little economic cushion to withstand a prolonged period of economic uncertainty or market deterioration. The COVID pandemic is only the latest in a series of shocks this exceptionally important sector has had to bear, with demonetisation, GST, and the credit squeeze post-ILFS, preceding the pandemic. It is a testimony to their resilience and temperament that so many MSMEs have managed to survive this tough period. But spirit alone can only ensure short-term survival; If MSMEs are to thrive, they need a lot more help.

Silver linings, but clouds still loom large

There are enough green shoots to indicate that the economy will come back to pre-COVID levels by this fiscal. Several, macroeconomic indices corroborate this positive outlook, and the third wave is expected to be only a brief setback.

However, a deep dive into sectors, geographies, and especially into the size of business, makes it apparent that the impact of the rebound is not being uniformly experienced. While the top 10-15 per cent of MSMEs can be optimistic, there are lakhs of micro-enterprises (turnover < 1 crore) that remain in acute distress because of factors mentioned earlier.

Creating an enabling, inclusive, nurturing playing field, where even the smallest of MSMEs can flourish, is the biggest help the government can provide now.

Think beyond credit

Most discussions on MSME growth tend to focus on helping them with easier access to finance. While the importance of credit and liquidity for a small business is not in doubt, we often ignore the more structural obstacles that need to be urgently addressed at a policy level – e.g. the ease of doing business, supply chain availability and cost escalations, the impact of climate change etc. In fact, assuming that there will always be something that threatens small business survival, could be a useful starting point for any policy.

Therefore, all eyes will again be on the Finance Minister’s budget speech next week, given that in India we treat the presentation as a statement of policy intent, rather than as only a statement of account.

Here is a wish list:

Make ‘business as usual’ easier

Getting approval to start a business is certainly easier than before, but the real problems lie in the day-to-day running of it. While laws and compliances are getting rationalized, these need to be structurally enforced at the state level. States that are still demanding archaic and unnecessary compliances must be called out publicly and ‘transparency-driven’ competition among states must be encouraged. While some states are making progressive changes, this needs to become consistent and ubiquitous.

GST as carrot, not stick

There is no doubt that the One Nation, One Tax principle embodied in GST has made indirect taxation simpler. However, there is a lot more to be done if we need to get micro and small enterprises to embrace it willingly. Given that data analysis is sophisticated to detect frauds, the policy itself should focus on simplicity rather than an excessive focus on reducing abuse. A case in point – ITC rules especially should be made simpler with buyers depositing the GST amounts and claiming entire ITC rather than depending on suppliers to deposit the same.

Driving consumption

The Indian GDP growth imperative will need more consumption and Direct taxes both for MSME’s and individuals need to be viewed as an important lever to achieve the same.

Affordable credit

The ECLGS scheme was a big relief during the pandemic and should be extended with additional borrowing limits. This scheme has helped many, but we must remember that this was available only to MSMEs with an ongoing lender relationship.

We also need to think of structural initiatives to help the micro and small enterprises to get affordable credit. A re-imagining of micro finance principles to trade associations (formal and informal) along with credit insurance will incentivize lenders to direct affordable credit without requiring state intervention.

While some of these may be outside the scope of a Budget statement, the intent of creating an environment that is comfortable for each stakeholder – buyer or seller, small or large, lender or borrower – should be the guiding force of policy.

The author is Founder and CEO, Vayana Network- Supply chain finance platform. Views are personal.

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.

Budget 2022: Circular economy will help transition to sustainable economic progress

Union Budget 2022-23: Renewable energy plants or farms at wrong places will destroy critical natural ecosystems, threaten endangered species

Indian Union Budget/ Representational image. CNBC-TV18

The temptation to fill this article with numbers and make a case for higher budgetary allocations to help conserve India’s wildlife and natural habitats in the upcoming Union budget is irresistible. Especially, given the scope and geographical coverage that the Ministry of Environment Forest and Climate Change (MoEF&CC) has to operate in, making it difficult to work within the given Budget.

The monetary policies to support economic growth in the pandemic ravaged years and to deal with bottle-necks, demand-supply mismatch leading to rising inflation, and with general elections not far… the finance minister like always has a very crucial role to play. In these times focusing on the environment would be the most prudent step.

The Union Environment minister speaking recently at the South Asian Consultation meeting said that “we need to encourage investment for sustainable use with necessary regulations to increase ABS (access and benefit-sharing) fund, which can be used for conservation of biodiversity and betterment of the local community”. This was said referring to The Biological Diversity Act, 2002. Further, he said that India subscribes to the theory and practice of green infrastructure development and ‘Development and Design’ particularly in the linear infrastructure sector that “we build to promote economic development, conservation and connectivity”

In the current consumption-based linear economic model, human well-being will always be compromised for “economic growth”, this needs to change. The prime minister in one of his speeches stressed the need to move towards a circular economy and the upcoming budget would be a good start to his intent. A circular economy means moving away from our current linear economic models of taking materials from Earth, making products from them, and eventually throwing them as waste. A circular economy allows economic well-being while tackling issues such as resource management, waste and pollution, biodiversity loss, and climate change to name a few.

India’s move towards renewables is a commendable start; however, this will also have to keep in mind the impact it may create if not done well. Renewable energy plants or farms at the wrong places can destroy critical natural ecosystems and threaten endangered species. Thus, bringing down the net benefits significantly if not irreversibly.

The Budget can help tackle this by incentivizing installations in the right locations. Economic activities need to promote regeneration of natural systems and move away from take-make-waste processes, this can be driven by the right budget allocations. Principles of the circular economy if incorporated in the Budget will help transition to sustainable economic progress.

The prime minister’s vision for development and design can be boosted by smart allocations; for example, the Budget must make provisions for mitigation measures along linear infrastructure be it roads, canals, railway, or transmission lines. This will in all likelihood save lives of endangered species such as the Great Indian Bustard, Elephant, Tiger, and Rhinoceros more than any other measure while quickening the completion time.

The Budget must increase allocations for both fundamental and applied research. There is evidence to show that investing in research positively impacts economic well-being. Research in fundamental sciences, biomimetics, natural resource management, biodiversity, and the environment will not only help come up with potential solutions to the most complex issues but will also help arrest the brain drain from our country.

The Prime Minister at World Economic Forum, Davos said in keeping our goal of ‘Global good’ we commit to a net-zero target by 2070. India’s growth will be green, clean, sustainable, and reliable. Further, he said that the country is 100 percent committed to mitigating climate change impact. Increasing budgetary provisions significantly for the MoEF&CC will enable the realisation of this vision, as sustainability is the core of this ministry.

Budget 2022 is a great opportunity to lay the foundation for a new paradigm. Incentivizing circular economy, making provisions for mitigation measures, investing in research, investing in regeneration, and maintenance of natural systems hold the key. It will empower 1.3 billion of us and our country to build resilience, create wealth, prosper, bring economic well-being, and be a leader.

The author is Head, The Habitats Trust- not-for-profit working towards the protection and conservation of India’s natural habitats.Views are personal.

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.

Budget 2022: Progressive impetus needed to create a cohesive Edtech ecosystem in India

Union Budget 2022-23: The government can promote lifelong learning by providing tax benefits for education investment

Indian Union Budget 2022/ Representational image via Facebook/@modernchildcare

2021 was yet another great year for the edtech sector with huge capital inflows, and consolidation underlining the mammoth opportunity and value it presents for consumers and edtech companies. Edtech has played a significant role in ensuring continuity for learners even during a time of disruption in the traditional ecosystem. The year has also reinstated the dire requirement to reskill and upskill in a world where lifelong learning is the new mantra to address the evolved industry-led challenges for survival and success.

While edtech companies are playing a vital role in making quality trans-national education accessible and affordable for millions, it’s equally contributing towards creating a skilled workforce, thus accelerating the country’s GDP. Therefore, with the Union Budget 2022 set to be announced soon, there are a few critical elements that can certainly enhance the online education sphere for further propelling radical change in the sector at large.

Need tax-saving education scheme to encourage skilling

Rapid digitisation has certainly taken over the industry and every sector is witnessing evolution to an extent where employers are keen on hiring skilled talent with requisite knowledge around industry-driven skills. Given the current circumstances, it’s important that professionals are updated with the evolving domain knowledge, and it’s only possible when they are constantly upskilling.

However, in the current situation, professionals are hesitant in investing to upskill themselves, since it does not offer them a tax-break privilege. Unlike a variety of tax-saving mutual funds, there’s a need to introduce a tax-saving education scheme within the country to promote the upskilling culture at large. Also, there are certain tax benefits that one gets against the education loan for graduation/post-graduation – the same can be replicated for upskilling programs. Such opportunities will encourage millions to invest in their education and, will help them to claim tax deductions/benefits at a later stage.

Union Budget 2022 could be an opportunity for the government to introduce such a progressive initiative which in turn, can have a two-fold impact on the economy – skilled workforce, and an enhanced GDP.

Such evolving circumstances can also introduce collateral benefits like more qualified teachers, upskilled educators/Subject Matter Experts (SMEs) for driving an immersive learning ecosystem, thus also accelerating India’s ambition of becoming the teaching capital of the world.

Attracting talent to startup ecosystem

ESOPs are a popular device in the corporate world, deployed to attract and retain talent. In today’s day and age, early ventures are frequently using the currency to balance CTCs against allotted ESOPs and generate wealth-creation opportunities for the employees. However, employees are liable to pay taxes at the time when the allotted shares are sold without any option to set off the gains against any future investments. Also, ESOPs are not treated the same way as listed equity.

For many early employees, they risk their career to build a startup, and even after holding ESOPs for 4-5 years, the taxation on ESOPs is very high. On the other hand – holding listed equity may get taxed at LTCG rates. The Government can help improve the ecosystem by revising the taxation on ESOPs and making it at par with listed equity taxation. The risk for the exercise remains the same as it is for normal stocks. The tax reduction on ESOP will help in making ESOPs an attractive tool to attract and encourage employees to enrol for the same.

The writer is Co-Founder & MD, upGrad. Views are personal.

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.

Budget 2022: Make investments in P2P lending tax-free to solve ‘access to credit’ challenge

Union Budget 2022-23: FM must come up with a policy framework to protect lenders’ interest and enhanced procedural aid to recover their money from digital borrowers

Indian Union Budget 2022. MoneyControl

In last year’s Budget, the finance minister announced pillars on which the proposals would be based – creating financial capital, improving human capital, kickstarting innovation and R&D, etc., to name a few. As the COVID-19 pandemic is crawling its way back into the lives of Indian citizens, the Union Budget 2022-23 is an opportunity to streamline various sectors that need the government’s attention. Though 2021 was a positive year where we witnessed a steady recovery despite the pandemic, we expect the measures to sustain the growth momentum of the fintech industry to be part of Finance Minister Sitharaman’s budget bag.

Since the Reserve Bank of India has created a new department to regulate and oversee fintech companies, there’s a good possibility that the government will emphasize the sector in Budget FY22-23, providing incentives that could help the industry usher into a “FinTech Revolution”. The fintech sector can promote financial inclusion and generate significant employment opportunities with suitable measures. Within the fintech industry, Peer-to-Peer (P2P) Lending has an enormous potential to expand as a vital part of the sector, with more encouraging steps to invest in it. P2P lending space can solve the concerns of credit accessibility for the country’s citizens.

Encourage investors to invest in tech-backed asset class

One way of doing that would be, the returns from Peer-to-Peer (P2P) Lending investments could be tax-free under Section 80C of the Income Tax Act, or special provisions could be introduced to lower tax rates, such as a tax exemption for earnings under Rs 20,000. It will encourage investors to invest in a technology-backed asset class that offers better returns when compared with traditional assets. Additionally, it would increase the purchasing power capacity of individuals and fulfill one’s dream or get access to funds during emergencies. In India, P2P lending is emerging as a crucial segment to empower small enterprises. Further, the sector will witness accelerated growth that contributes to the country’s economy.

The formation of the fintech department by RBI is a positive move. We wish the Budget comes up with a policy framework to protect the lenders’ interest and enhanced procedural aid to recover their money from digital borrowers. A specialized government vehicle to manage fintech might not only help companies run more efficiently while adhering to compliance rules, but it could also assist fraudsters to be eliminated and boost investors’ confidence.

Need for technical, financial competence through educational institutes

There were significant job losses during the pandemic. The primary reason was various industries’ inability to keep up with the evolving technology. In India, fintech education is the need of the hour. The government has been spreading awareness about the technology skill-building initiatives, which is a significant step, but it will positively impact our economy if additional actions are taken. Setting up avenues for advanced technical education is necessary to affect the employability of the country’s population. Presently, India requires professionals with technical and financial competence to conduct the Fintech revolution. More institutions that provide formal education and certifications in fintech are needed to create a skilled group of individuals required to grow P2P lending platforms and the other sub-sectors in the Fintech industry.

P2P lending, as a significant component of the larger finfech sector, is quickly becoming the most popular alternative investment option. There is a need for policy to help the industry evolve and more innovative fintech enter the space of digital lending or P2P lending.

Treat fintech, startups equally in policy framework

Fintech firms and other startups should be treated equally in the policy framework. Sharing technological advancements with fintechs and startups can help to accelerate the objective of financial inclusion. These are only a few of our expectations from the upcoming budget, and now it’s up to policymakers to develop a practical growth and development strategy. Until then, we wait until February 1 with great anticipation.

The author is Co-founder and CEO of LenDenClub-Peer to Peer (P2P) lending platform. Views are personal.

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.

Budget 2022: Give incentives to manufacturers of digital equipment to ramp up supply to schools, educational institutions

Union Budget 2022-23: Allow complete exemption from LTCG tax if it is reinvested in higher education

India Union Budget 2022: Educating and upskilling are the only ways to ensure that an aging population becomes an asset in the future. Scott Graham/Unsplash

As a population, we have a lot going for us right now. In fact, the term ‘upwardly mobile’ is starting to include more people each year than it did before. A lot of this has to do with the fact that we are a young population. But like all good things, this will not be forever either.

The number of people below the age of 24 comprised over 50 per cent of the population in 2011. This figure is going to look very different in 2036 – that’s just 14 years from now. India’s Sub-24 population is going to make up less than 35 per cent of the total population, and that’s going to render a very different reality for us collectively.

Last year, around Rs 93,224 crore was earmarked for education with 2020’s National Education Policy, but with no allowances for upskilling of an already educated population. This year’s Budget could be a step to change that.

Educating and upskilling are the only ways to ensure that an ageing population becomes an asset in the future. So, how can the 2022 Budget help?

Improve digital infrastructure

Much has changed in the education landscape since the pandemic. If nothing, the growth of the edtech sector stands testament to this fact. Even in non-urban sectors, there’s been a marked digitalisation of education. Manufacturers of digital equipment like laptops, phones, webcams, and internet service providing hardware could be given incentives to ramp up their supply to schools and other educational institutions.

Grant concessions on GST for education sector

The average price of laptops between 2016 and 2021 has gone up by nearly 50 per cent. Subsidies on these new-age essentials for education might ease the strain significantly.

Auxiliary services like rent, food contracts, housekeeping, security, and transportation services for higher education constitute around 20-30 per cent of the cost of education. An additional 18 per cent GST on these costs brings up the overall cost by 6-7 per cent. Should the Budget exempt educational institutes from this, the benefit will be passed on to the students in the form of reduced fees, making higher education even more accessible.

Save on Capital Gains

Some people are contesting for the tax on long-term capital gains to be zero per cent to encourage long-term investments. Another way to achieve the same end and kill two birds with one stone would be to allow complete exemption from LTCG tax if these gains are reinvested in higher education.

This can be done if these investments in higher education are earmarked from the beginning. With checks and balances in place to prevent any misuse, this could help ease the burden of tax and encourage higher education in the country.

Upskill educated population

There’s little doubt that upskilling has a positive impact on the country’s GDP. A 2021 study by the World Economic Forum hypothesized that India’s GDP could go up by Rs 40 trillion if upskilled.

Recent reports say that by 2022, about 54 percent of the world’s population will need upskilling or even re-skilling, in some cases. Seeing that 80 percent of our engineering talent stands unemployable at this point, according to studies, confirms this understanding that our educated population needs as much attention to get them job-ready.

The pandemic has also shown the importance of technology. In fact, fintech as an industry was the highest-funded sector in 2021, with ed-tech and health-tech following closely behind. This along with the sudden boom in demand for tech talent confirms its place in the future of this country’s workforce.

In this light, it becomes clear that even the unemployed population will need tech training in order for them to be job-ready in the decade to come.

Help from CSR

Large corporations in India are already armed with the means and know-how to enable most of these changes through CSR initiatives. Corporates could make it a part of their initiatives to boost education infrastructure in less developed areas of the country, and by helping to upskill as many as they can.

In under two decades, we may be catching up with the West with an aging population as something to offset. An older population could simply mean declining productivity. However, an aging but future-ready population might be far more agile, and ready for any economic conditions that the future may hold.

The writer is Co-Founder, Fi Neo-Bank. Views are personal.

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.

Budget 2022: EV players hope regulatory reforms will make financing more accessible

Union Budget 2022-23: The government should provide incentives for EV adoption to boost domestic demand

Indian Union Budget: Electric vehicles. Reuters

As the Union Budget 2022 is approaching, micro, small businesses, and startups throughout the country are hopeful that Finance Minister Nirmala Sitharaman will announce steps to alleviate the uncertainties caused by the COVID-19 pandemic. Since the mobility sector could be considered one of the worst-affected industries due to the pandemic (as the solutions included restrictions on movements and lockdowns), the sector’s overall hopes must be high from the upcoming Budget.

Some of the critical aspects to the current scenario for the mobility sector may be important to note before delving into the expectations from the Budget:

Allocations for EV adoption

The government is expected to incentivise the purchase of 7,090 electric buses, 35,000 four-wheelers, 500,000 three-wheelers and 1 million two-wheelers through the FAME scheme, which has a budget of Rs 10,000 crore.

Many products in the segment did not qualify for the incentives due to rigorous localisation standards and other rules. Those who qualified for subsidies did not get enough to close the pricing gap with combustion engine automobiles. Hence, besides providing an extension to the scheme, the start-ups anticipate something for a more extended period that helps the small and medium-sized enterprises in the field.

Due to the lockdowns and movement restrictions introduced, a drastic reduction in demand affected the overall mobility sector. Working from home is becoming more popular to protect safety once again. Still, business travel and all of the associated mobility services – flying, taxis, and e-hailing are in short supply. Although it may appear that the acceleration of future mobility has slowed, the first view ignores recent advancements.

The following shift is expected to continue long after COVID-19 has been eradicated.

Customer preferences are essential: Consumer preferences are more concerned about digital channels, environmental issues, and safety. Access to micro-mobility options such as bicycles, e-scooters, and mopeds and safety and health concerns will be critical.

Technology is key: In all sectors, including connectivity, autonomous driving, and urban transportation, the rate of change will continue to accelerate.

Regulations in the mobility sector: The future of regulations in the mobility sector will need to be in line with promoting business continuity as well as environmental considerations. While Mobility will always be the backbone of any economy, it will need the right alignment as well for the same reason.

Expectations from finance minister in Budget 2022

Reduced Indirect Taxes (GST)

The Automotive Component Manufacturers Association (ACMA) has written to the government requesting that all vehicle components be subject to a uniform 18 per cent GST rate. It should be included in the government’s efforts to strengthen the industry, which has been suffering from a downturn. The industry association has also sought revisions to the Remission of Duties and Taxes on Export Products (RoDEPT) rates. Because the increased customs charge has increased the overall cost of the EVs, the demands are valid and should be accepted. The government needs to make a more robust policy commitment to the sector. Fixing the inverted duty structure for batteries from 18 per cent to 5 per cent would be beneficial. Reducing infrastructure charging/swapping fees from 18 per cent to 5 per cent will also help.

Accelerating actual demand for EVs

The Union Budget holds excellent promise for electric vehicle makers and start-ups this year. The industry has high hopes that the government will take the necessary steps to put India on the global EV map and make 2022 a watershed year for electric vehicles in India. The government extended the PLI scheme to the automotive sector to stimulate local manufacturing last year. However, the government must incentivise individual and commercial EV adoption across India to boost domestic demand. The industry might also gain if the government becomes more generous with infrastructure spending and mandates charging stations in all public and residential locations. It will help to increase the use of electric vehicles across the country.

Summing up

To summarise, the car industry, particularly the electric vehicle sector, anticipates relief in many sectors from the Union Budget 2022-23, including direct and indirect taxation. There is hope for regulatory reforms to make financing more accessible and reduce GST slabs to lower the overall cost of manufacturing and owning electric vehicles. With programmes like the National Electric Mobility Mission plan 2020, capital subsidies under FAME, and others, the government has been assisting the sector in increasing adoption. However, more stringent support in a supportive policy framework is required this year.

The author is Founder, Myles Cars-self-drive car rental service. Views expressed are personal.

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.

Budget 2022: Nirmala Sitharaman should clear regulatory ambiguity around cryptocurrency

Union Budget 2022: Recognising Bitcoin, crypto as legitimate tradable assets would bring greater stability and trust to sector

Indian Union Budget 2022: File image of Finance Minister Nirmala Sitharaman. PTI

The Union Budget for the upcoming year comes at an interesting time. Amidst the increased adoption of Bitcoin and crypto in general, the past couple of years have seen a spectacular boom in Indian crypto startups building innovative products – not just for India, but for the whole world.

2021 was the year that India had its first crypto unicorns. As the industry continues to grow at an incredible pace, the sentiments in the sector are largely bullish. Several industry reports estimate how the potential for revenue from crypto and other digital assets is going to be massive. The crypto sector could potentially become a great source of FDI as well and help create thousands of jobs in the country.

Despite all of this positivity, there is still an overhanging apprehension within the industry – primarily due to the regulatory ambiguity around crypto. The government has yet to define crypto or provide concrete views on how crypto assets are going to be treated and taxed. At GoSats, we are looking at the Union Budget quite positively and expect that the government sees this as an opportunity to shed some clarity on this situation, and perhaps take the first steps towards a positive stance in regulating crypto assets.

During the Budget, we do not think there will be anything concrete regarding the treatment and taxation of crypto and other digital assets. For that, we will most likely have to wait until the crypto bill is released sometime later this year. However, what we are expecting are positive statements of intent from the FM – that could definitely help provide encouragement to investors and the sector as a whole.

The finance minister could officially acknowledge the potential of the crypto industry in the country and pave the way for its inclusion within the financial ecosystem with such positive statements of intent. The first positive step would be for the government to define crypto and at the very least, provide the government’s initial views on crypto including details on income or capital gains, taxation, etc.

Any such statements or plans for future initiatives announced in the Budget would also kickstart more conversation on understanding the sector, the taxation and other related policies required, and most importantly, the whole ocean of opportunities that India could capitalize on to become a leader in this sector. We are already seeing many Indian and foreign VCs being intrigued with crypto companies and the amazing talent they have. This would accelerate this trend, and open up thousands of job opportunities.

Although there isn’t any official data as such, a recent Reuters report pegged the number of cryptocurrency investors in India to be around Rs 1.5-2 crore, with a holding size of nearly Rs 40,000 crores. Recognising Bitcoin and crypto as legitimate tradable assets would bring in greater stability and trust to the sector.

This Budget does assume greater importance since as an economy we are staging a steady recovery while still fighting ongoing waves of the coronavirus pandemic. In the current climate, laying down the initial steps for forward-thinking regulation for cryptocurrencies could help play an important role in this recovery.

Regulatory clarity or approaches hinting towards the same would give the crypto sector a much-needed boost, accelerate its growth and contribute to the government’s $5-trillion economy vision while being a new tool amongst many others towards financial inclusion in the country.

At the end of the day, it seems to be in everyone’s best interests if the country moves towards a progressive regulatory framework around crypto. And we are of the hope that this happens sooner rather than later. The right statements and regulations would create a wonderful ecosystem where innovation can thrive – and India’s entrepreneurs can create platforms for the whole world, and encourage more Indians to kickstart their crypto journey and enjoy the benefits of wealth creation through Bitcoin, crypto, and other digital assets.

The author is CEO & Co-Founder, GoSats-bitcoin stacking platform. Views expressed are personal.

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.