Expectations Of a Young Entrepreneur From Union Budget 2020
While it is expected that the Budget's focus is going to be on measures that can revive the struggling economy, a focus on more investment in information technology is required
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India is home to the world's largest number of youth, the employable population in millions which joins the workforce every year. While the government of India's flagship campaigns such as Make in India and Digital India revolutionized the ecosystem for young entrepreneurs in the country in the past few years, the economy's slowdown in the recent past has resulted in job losses. As the finance minister is set to present the Union Budget amid the economic downtrend, let's take a look at the expectations of the young entrepreneurs from Budget 2020.
While it is expected that the Budget's focus is going to be on measures that can revive the struggling economy, despite the slump and job losses India is still expected to remain a software development centre stage which calls for a focus on more investment in information technology. Cybersecurity is a critical concern when Digital India and new technology have made public engagement a matter of a click on a handheld smartphone even on important entities of government such as healthcare, finance and education. As our country is gearing up more towards artificial intelligence (AI)-based systems, cybersecurity as a talent-specific sector can open up new avenues for job creation. As India is slated to become a trillion-dollar-economy with AI-enabled ecosystem, its low allotment of budget to this sector in the past years is something that requires a re-look. Apart from this, young entrepreneurs of the nation expect the following measures from the Union Budget 2020:
Exemptions for start-ups and cut in income tax: Young entrepreneurs are looking for income tax relief that can be brought by modifications in the tax rates. More money in the hands of people will solve the liquidity crunch and push economy forward as more goods and services will be exchanged.
Under Section 80 C of the Income-tax Act, 1961, investing can help one claim INR 1.5 lakh deduction in taxable income. A very large number of youth enter workforce every year, hence a rise in the deduction limit for tax is a valid expectation from the young business persons.
Reduced GST: Young entrepreneurs would like the finance ministry to consider reducing rate of Goods and Services Tax (GST) on FMCG and personal-hygiene based consumer durable products and groceries. GST must also be lowered on electronic products. In addition, more and more companies and SMEs will be able to de-risk their valuable infrastructure and data if there is a relief on GST for cybersecurity audit. Cybersecurity practically is the key to GST's success.
The government must also consider lowering costs of public transportation. It would also be a good measure towards increasing quality of life of lower-income groups.
LTA exemption for foreign travels: With Make in India campaign, a number of innovative start-ups with original Indian offerings can put India as a leading country on the world map of innovations. Travelling helps in enriching learnings and adding more value to products and services. Young Indian entrepreneurs aspire to grow globally and have international standards incorporated in the quality of their offerings. This can in turn help India's economy grow manifold. The government should consider LTA for international trips as well. It shall be instrumental in creating more knowledgeable base of human-resource in all aspects in the country.
Bring back exemption on LTCG: If the finance minister announces re-introduction of exemption on long-term capital gains (LTCG), there will be a growth in investments in mutual funds. This can prove to be a booster shot for the market. Taxing the dividend income at the investor's end rather than the company is another measure that can turn the market economy around.
Better loan policy for education and businesses: At present, section 80 E offers deduction on the interest component for education loans. Youth of India expects better policies towards taxable loan for higher education. Better education loan policies will help students and their families in contributing more to the growing economy of India. Also, tax rates must be brought down for important tools for education such as laptops and pen drives to make the government's Digital India initiative write greater success stories.
Increase allocation in rural schemes: More allocation must be granted to schemes targeted at rural populations such as Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), Deendayal Antyodaya Yojana - National Rural Livelihoods Mission, Deen Dayal Upadhyay - Gramin Kaushalya Yojana, Pradhan Mantri Awaas Yojana - Gramin and Pradhan Mantri Kisan Samman Nidhi for better quality of life in rural areas. With the recent announcements by the finance minister on the National Infrastructure Pipeline, better allotment for infrastructure development in the rural areas out of the INR 102 trillion must be announced to put the country on a roadmap to faster development and revival of economy.
Market regulations towards clean energy and sustainable living:
Indian capital region and other metropolitan cities saw unprecedented air pollution last year. As per reports, the pollution has been causing premature deaths of 2 million Indians every year. Young entrepreneurs are sustainable-living conscious and aware of the dangers of environmental pollution. Regulations that can make renewable energy viable for manufacturing units must be brought in the system. While the previous budget focused on electric vehicles and an increased budget for the ministry of environment, specific announcements must be made for the budget plans on cleaner rivers and air in this year's Union Budget. Under the National Clean Air Programme, budget plans for major Indian cities with large populations must be launched to tackle waste and dust management and industrial emission management.
Increased focus on tribals: While an increased budget for tribal affairs ministry was announced last year for focus on infrastructure projects in tribal regions of India, the National Commission for the Scheduled Tribes had reported that there was an acute lack of funds which hampered processes that followed up on tribals' rights and cases. Tribal issues must be brought to fore and poor implementation of Forest Rights Act, 2006 must be improved with better allocation of funds.
India's gross domestic product (GDP) growth which is currently estimated to be at around $2.8 trillion, dipped to an 11-year low due to poor show by manufacturing and construction sectors, as per government data. Young entrepreneurs' expectations from Union Budget 2020 are goal-oriented and realistic. They are the keenest lot when it comes to aspiring for India to achieve its targets for $5 trillion GDP by 2024 as envisioned by Prime Minister Narendra Modi. We hope that the upcoming budget is as optimistic as the young entrepreneur's insights and expectations.