Union Budget 2021: Initial Reactions on Initiatives Announced for Startups, Education and Other Sectors

The Union Budget 2021, the first-ever paperless budget to be presented in India, was announced by the Finance Minister Nirmala Sitharaman. While a lot of prominence was given to the agricultural sector, initiatives for other sectors such as fintech, education, startup, and so on were also announced. Although the budget has just been announced and needs to be looked into to present a detailed analysis, initial reactions from the industry are as follows:

Zishaan Hayth, CEO and Founder, Toppr

The goal to empower 15,000 schools is really promising. They can further mentor other schools in their region and help achieve NEP goals faster. With the future of education as hybrid, we believe that edtech companies can act as true allies to the government and education ecosystem as a whole. Technological interventions can multiply government investment manifold and accelerate the implementation of NEP goals ie. focus on tracking and improving learning outcomes and holistic progress of students.

Rajeev Tiwari, Founder, STEMROBO Technologies

In the Union Budget, to promote Startup - announcement of Incorporation of One Person Company, Easing of Definition of Small Company from the point of view Corporate Law Compliance are a welcome step. Innovation & R&D will get a boost by allocating National Regional Foundation (NRF) a sum of 50000 Cr and boost Innovation Culture in startups. Announcement of Non-Auditing of Income Tax till 10 Cr.  and allowing Startups to claim IT Exemption and Capital Gains for 1 more Year will ease the Compliance Burden of Startups and help in raising more funds. NEP (New Education Policy) has been given a thrust in the budget. The plan to set up 15000 Pilot Schools as a showcase for NEP, which can be exemplary for other schools, is a welcome step and will lead to promoting NEP in the School Ecosystem. Tribal School-Eklavya Schools with newer allocation – in tribal areas will spur further development of education in tribal areas. Allocation of the National Apprenticeship Scheme for 3000 Cr and increasing the contours of it will benefit companies. Innovation & R&D will get a boost by allocating National Regional Foundation (NRF) a sum of 50000 Cr for the next 6 Years.

Anoop Gautam, CEO and Co-founder, Tinker Coders

The unprecedented contractions put forth by the Covid-19 crisis have changed the economical aspects, entirety. Many changes were incorporated keeping in mind the challenges being faced by people at the grass-roots level. The startup industry, Edtech space too witnessed contractions and flattening of the curve in terms of growth and expansion. However, the recovery and normalcy rate has improved to a larger extent keeping in mind the implications of the pandemic. Union Budget 2021 has focused on strengthening 15000 schools with all the components of NEP as a pilot project. Also, skill enrichment programs will be initiated in collaboration with the United Arab Emirates which will bring new opportunities for the youth of our country. FM Shrimati Nirmala Sitharaman also mentioned to initialize a collaborative training program with Japan, which will be launched for more countries as well in the upcoming future. This year’s Union Budget has focused primarily on innovation and research development, therefore it has become even important for the students in the K-12 segment to enhance their 21 st -Century skills in order to become skill-efficient in this tech-led generation. For startups, the government has proposed to reduce the margin money requirement from 25% to 15%. This will open a new door of opportunities for startups in upscaling their businesses. The government has also doubled the fund allocation for MSMEs, to a whopping 15,700 crores for FY22.

Abhishek Gupta, Founder and CEO, Hex N Bit

We welcome the budget for 2021. With an increase in the MSME budget of Rs 15,700 crore, which is more than double of the previous year, can help the startups as well as MSME but as seen there are approximately 50k startups in India, so a big boost was expected in investment In the National apprenticeship training scheme–the Indian government has now allocated Rs 3,000 Cr. for National apprenticeship which will create a Skilled and talented workforce with the bilateral partnership with United Arab Emirates (UAB) to provide training, certification, assessments etc. India will collaborate with Japan in order to adopt cutting edge technology, technique and vocational programs for scaling up the technology in India to newer heights. The government of India has proposed the budget of Rs 50K crore over 5 years for innovation & R&D. There will be an expectation from the Government to spend setting up the Innovation lab focusing on the technologies such as Artificial Intelligence, Machine learning, Data analytics, etc. which can showcase the solution to most of the problem statement in most of the field including medical, agriculture, defence or any natural disaster. As proposed by FM, capital expenditure is now increased to Rs 5.54 Lakh crore from Rs 4.39 Lakh crore, hopefully, the state and center will invest a considerable amount for digital connectivity, high-speed internet at an affordable rate as well as learning assets in a remote location so that aspirants can learn new-age technology to build New India. Even after the economic crisis due to Covid-19, an increase in the capital expenditure with such a high number must be appreciated.

Aarti Khanna, founder and CEO, AskCred.com

The budget does have some heartening initiatives. The budget proposes to set up an ARC for NPA management. This is a welcome step to resolve the bad debts of the banking sector and give a boost to lending and economic activity. Indian startups are the pride of the country. Startups will benefit from the extension of benefits for 1 more year included in the previous budget which they were not able to benefit from owning to the onset of the pandemic. Some compliances and processes for taxation have been eased too. Focus on the health sector, infrastructure and capital expenditure is the need of the hour. The icing on the cake would have been some relaxation on income tax slabs and some relaxation on GST which might disappoint the masses but overall i shall call it a healthy budget.

Nitin Potdar, Partner J Sagar Associates

An allocation of 3,002.21 crores to skill development ministry and its various programmes is a welcome step but not sure whether that's enough given the current pandemic and need to create a digital infrastructure for education.  Higher Education Commission, an Umbrella body to regulate education, is a welcome step and hopefully would provide clarity and ease for educational institutions to introduce multiple academic programs.  However, there is a disappointment due to no relief from the burdensome 18% GST on Edtech industry which is doing a massive job of educating our next generation.