Indian Industries’ Expectations From Budget 2022

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The Union Budget 2022 will be presented on 1st February and the healthcare, banking, pharma, and other sectors look forward to the much-needed reforms and incentives. Many industries are clearly dealing with setbacks and challenges, and have so many expectations from the upcoming Union Budget. Here are some of the expectations that Indian industries are looking forward to in the union budget 2022.

Healthcare:

The government expects to continue to prioritize healthcare this year, despite the ongoing COVID-19 outbreak. According to many estimates, the government may increase spending in the industry by 10 to 15%.

Many healthcare practitioners are calling for simplified GST rules, particularly in the areas of health insurance life-saving equipment, and pharmaceuticals. The healthcare industry believes that continued investment in healthcare facilities is necessary to ensure that the business is prepared to respond effectively to future calamities or pandemics. Some speculate that the government would name primary healthcare a priority area, which would encourage private banks and lenders to invest.

“The government should look at increasing the healthcare expenditure above 2.5 percent of GDP and extend the National Health Protection Scheme (NHPS) to all migrant workers, in addition to the BPL population. The need of the hour is to improve healthcare funding with subsidized loans, incentivizing CSR investment by making it a tax-deductible expense, and allocating land for new hospitals.”

Debajit Sensharma, Group CFO, Paras Healthcare said.

Pharmaceutical :

The domestic pharmaceutical industry expects a rise in overall financial allocation for the healthcare sector in the forthcoming Union Budget, similar to that of 2021, with an emphasis on policies that support R&D activities and the maintenance of tax reductions on certain pharmaceuticals.

“An increase in the budgetary allocation from the current 1.8 percent of the GDP to 2.5-3 percent, as envisaged in the National Health Policy 2017 along with a separate allocation for the biopharmaceutical sector R&D is imperative,”

Organisation of Pharmaceutical Producers of India (OPPI) President S Sridhar told PTI.

Fintech:

The fintech industry expects and stresses the importance of fiscal and non-fiscal incentives in promoting financial inclusion and shifting away from a cash economy.

Fintech companies and experts have encouraged Finance Minister Nirmala Sitharaman to decrease TDS rates, claiming that doing so will free up cash for the sector while having no impact on government revenue.

“It would be extremely helpful if, in the Budget, TDS rate for fintech startups is reduced to 1 percent. This will free up much-needed working capital without costing the exchequer because the TDS is refunded in any case for loss-making companies.”

Kapil Mehta, Co-founder, SecureNow, said.

Banking:

The banking sector expects GST and TDS abolished on financial inclusion services provided via Business Correspondent (BC) outlets.

The banking sector expects to increase the limit on foreign direct investment (FDI). The banking and financial industry anticipates a 54 percent increase in the foreign direct investment (FDI) limit in public sector banks (PSBs) from the present 20 percent ceiling. This would put PSBs up to pace with private banks, which are already allowed 74 percent FDI. This measure will improve the health of government banks and level the playing field between the two sectors.

Reducing the government’s holdings in public banks. More policy and regulatory reforms are expected from the government, with the goal of reducing sovereign investment in PSBs and hastening the privatization of government banks.

Experts also expect the government to modify regulations governing Know Your Customer (KYC) and Non-Performing Assets (NPAs) (NPAs). Many people are hoping that the Centre will soon announce the formation of the India Debt Resolution Company Ltd (IDRCL) and the National Asset Reconstruction Company (NARCL) to help the banking sector manage risk.

Education:

A reduction in the tax rate would be very welcome from the government’s side, and it would be a huge relief for parents who are paying tuition fees.

The growth of ed-tech organizations, the transition to online classes, new software, and video conferencing technologies, and learning apps were all significant changes in the educational system. During the COVID-19 epidemic, the education industry has quickly altered in the previous two years as students and teachers move to digital learning. The Ed-tech business has adapted new technology and approaches to meet the rising demand for at-home learning. In Budget 2022, the industry asks for government assistance to expand.

It is widely agreed that easy access to all forms of knowledge has become increasingly important, and that high-speed internet is now required. The need to upgrade infrastructure is critical in order to meet the demands of the digital age.

“In the year 2021, the education sector was allotted Rs 93,224 crore, with Rs 54,873 crore going to school education and literacy and Rs 38,350 crore going to higher education. With a population of 600 million, India’s youth account for more than half of the country’s population, and the sheer volume of announcements in the education sector underscored the sector’s importance in defining the country’s future. This year it seems more likely for allocation to cross the 100,000 crore mark as the pandemic has further accelerated the need for a greater allocation for Building Innovation Ecosystem in Indian Educational Institutes and Enhancing Teachers Capacity, and to provide greater accessibility to students in far-flung areas.”

Rajeev Tiwari, Founder of Stemrobo said.
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