Union Budget 2021 India: Among the key announcements made by FM Sitharaman was around the gig economy wherein multiple startups have been engaging delivery personnel, drivers, and service professionals into their on-demand networks. The minister proposed the launch of a portal that will "collect relevant information on gig, building, and construction-workers among others.
The budget on a broader level focused on promoting the setting up of new enterprises, tax holidays, and a boost to digital payments with respect to startups. (Image: PTI)
Indian Union Budget 2021-22:Progressive, balanced, forward-looking, and big-booster are some of the adjectives how executives at India’s leading startups Ola, Paytm, Snapdeal, BookMyShow, Cars24, and Urban Company have defined the Union Budget 2021-22. While across sectors and markets, the initiatives announced by the Finance Minister Nirmala Sitharaman have been well received by technology businesses, the budget on a broader level focused on promoting the setting up of new enterprises, tax holidays, and a boost to digital payments with respect to startups. For instance, Sitharaman announced earmarking Rs 1,500 crores for a proposed scheme to promote digital payments in the country.
“The Finance Minister has presented a balanced budget that is aimed at maximum growth of all sectors in the coming year. The Rs 1,500 crore proposed scheme to incentivize digital payments is a welcome move that will accelerate the growth of cashless transactions in our country,” according to Vikas Garg, Chief Financial Officer, Paytm. During the pandemic, digital payments had emerged as one of the key enablers of empowerment at the grassroots and brought millions of people under the fold of the formal economy. Garg added that the government’s continued emphasis on increasing investment in Infrastructure, Insurance, and digital payments will ensure financial inclusion of the masses.
In its aim towards raising the share of public transport in urban areas, FM Sitharaman said that a new scheme of Rs 18,000 crores will be launched “to support augmentation of public bus transport services. The scheme will facilitate deployment of innovative PPP models to enable private sector players to finance, acquire, operate and maintain over 20,000 buses.” This is expected to boost the automobile sector and ease urban mobility.
“Ola welcomes a progressive & growth-oriented budget. Measures under Atma Nirbhar Mission will help create global champions in automobiles, financial services, and technology and foster an environment where India becomes integral to global supply chains,” said Bhavish Aggarwal, Chairman and Group, CEO, Ola. Aggarwal also supported the government’s clean air focus with its “electric vehicles plans that will accelerate the world’s transition to sustainable mobility.” Ola had last month partnered with Siemens for its upcoming electric vehicle manufacturing facility in Tamil Nadu that will cater to the demand in India, Europe, Latin America, Australia, and New Zealand.
“We are glad the Government has announced the investment in road infrastructure coupled with the announcement of scrappage policy. These will bode well for the auto industry as they will help it achieve the twin objectives of boosting demand whilst recycling old and polluting vehicles in our country,” said Ruchit Agarwal, Co-founder and CFO, CARS24. According to Sitharaman, over 13,000 km length of roads, at a cost of Rs 3.3 lakh crores has already been awarded under the Rs 5.35 lakh crores BharatmalaPariyojana project of which 3,800 km have been constructed. By March 2022, the government would award another 8,500 km and complete an additional 11,000 km of national highway corridors.
Among the key announcements made by FM Sitharaman was around the gig economy wherein multiple startups have been engaging delivery personnel, drivers, and service professionals into their on-demand networks. The minister proposed the launch of a portal that will “collect relevant information on gig, building, and construction-workers among others. This will help formulate Health, Housing, Skill, Insurance, Credit, and food schemes for migrant workers.” The minister added that for the first time globally, social security benefits will extend to gig and platform workers.
“The move towards providing social security benefits for gig workers will add a much-needed safety net that will help this sector grow in a sustainable way and help the many millions that are a part of it. Reducing residency requirements for founders will allow talent to flow & will boost the startup ecosystem. Extension of tax holiday for start-ups by 1 year, boost to digital payments, increasing threshold for small businesses to Rs 2 crore are other gains for the startup sector,” said Kunal Bahl, Co-Founder and CEO, Snapdeal.
According to the UK-based FairWork Foundation, supported by The Oxford Internet Institute, which published its second India report in December 2020, on the labour standards in India’s ‘platform’ economy, home services startup Urban Company was ranked higher than Flipkart (riding on its logistics arm eKart), Amazon’s logistics service Amazon Transportation Services (ATS), Ola, BigBasket, and Housejoy. On the other hand, Swiggy, Uber, and Zomato were found to have the worst working conditions for their ‘partners’, according to the report.
“The impetus towards disinvestment and promotion of new businesses are steps in the right direction. Urban Company is particularly pleased with the government’s focus on providing social security benefits including ESIC benefits toward gig workers. This is a welcome move and takes forward measures outlined in the Social Security Code approved by the Parliament last year,” said Abhiraj Bhal, Co-Founder, Urban Company.
However, Sitharaman gave the entertainment sector a miss even as it was among the most impacted markets due to Covid and the following lockdown. “The entertainment ecosystem, the world over, remains the key stone for travel, tourism and hospitality industries which are growth engines for any economy and have been the worst-hit through the pandemic. Budget 2021 did not address the long-pending relief measures for the media and entertainment industry by way of easing infrastructure roadblocks and rationalizing the extremely high GST rates on live entertainment with that levied on cinema,” said Ashish Hemrajani, Founder & CEO, BookMyShow.