Union Budget related Expectations From Supply Chain Industry and Startups

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Samir Sathe, Wadhwani Foundation, Wadhwani Advantage,
Expectations from the Supply Chain Industry:
Umda, UPS association in Southern India; UPS manufacturer association north member: Mr. RK Bansal, Mr. Sumath Kumar, UMDA member Rajesh Kumar said: 
" With the present government focus on manufacturing with special Atma Nirbhar Bharat & make in India campaign, but still the sector needs more incentives to grow. As per McKinsey report Modi government’s initiatives to boost manufacturing in India, the sectoral growth fell to 7.4 percent per year over the last six years, compared to 9.5 percent per year growth during FY2006 and FY2012. Also, India’s manufacturing sector share of employment increased by just one percentage point. More favorable incentives and schemes are needed for manufacturing to grow in India. Therefore, we request the government to review the policy for the manufacturing sector. The government should encourage domestic manufacturers & promote innovation in the sector so that newer technologies are introduced in the sector."
"With regard to GST, We request the government to declare UPS with the battery as a composite supply, and UPS GST of 18% should apply to all components. Further, to remove confusion, GST on all types of batteries being used in capital investments, in offices, homes, etc. should not be treated as luxury items. It should have a uniform rate of 18% GST only", they also added. 

By Mr.Ram Iyer, Founder & CEO,Vayana Network said:

GST relief for the SMEs and MSMEs: There should be rationalization of GST rates on various goods and services which are used by SMEs and MSMEs. e.g., Supply Chain Management Service, HR services, Services of Chartered accountants, Under Construction property as well as on Passenger and Commercial Vehicles etc. The new rule that restricts use of input tax credit (ITC) for discharging GST liability to 99 % effective January 1, 2021 should also be relaxed in the budget, as this will make more cash available in the hands of MSMEs to fund their growth and increase their working capital. Especially as most of them have had very rough 2020

Incentivising digitization for smaller players :The E-invoicing regime is about to start for >5 crore turnover companies from 1st April 2021. This will be a great push for digitization for SMEs. However, the Budget should make special provisions for SMEs to help them adopt E-invoicing via certain incentives such as providing free (or special priced) E-invoicing applications for such SMEs.

Incentivising the lending sector: The key is to make CKYC and NBFC-AA validated bank credentialized KYC as sufficient for any lender to assume KYC done. This is especially for MSME's.

Providing benefits to lending players beyond banks : Banks will continue to grow at customary 1.5 x of GDP,  The opportunity and need is to scale lending 10x for unbanked/lightly banked, which can be helped by fintechs and non banks, anything that helps this cause in the budget will be welcome, as it opens the door to credit for a larger audience.

Also, the borrower downloaded credit reports (digitally signed by the rating agency) should be considered as good enough rather than lending institutions retrieving credit rating reports and downgrading the credit score of the borrower. The former does not result in downgrade.”

SME and Startup-focused expectations from the Union Budget 2021

By Samir Sathe, Executive Vice President, Wadhwani Advantage at Wadhwani Foundation

“The government must do three things; firstly, improving the capabilities of MSMEs to help them generate demand from large companies, secondly, creating market access sector-specific platforms in chosen industries of national advantage, and finally treat SMEs and startups with an integrated approach than with a stand-alone one, for the mutually reinforcing system wide impact”.

SMEs MSMEs Supply Chain Logistics Samir Sathe Ram Iyer