Budget 2021: Why Simplification of GST and Ease of Doing Business the Need of the Hour

The Finance Minister has already promised a 'never before' like Budget, raising hope among MSMEs that their concerns will be adequately addressed this time.
Budget 2021: Why Simplification of GST and Ease of Doing Business the Need of the Hour 

2020 has given a significant boost to e-commerce, and the Government’s support through the upcoming Union Budget can further accelerate its ongoing growth wave. 

The Finance Minister has already promised a 'never before' like Budget, raising hope among MSMEs that their concerns will be adequately addressed this time.

Here is what the retail-tech players are expecting:-

Tax Exemptions

The government should strive to increase the disposable income of the middle classes so that discretionary spending will rise. Concrete steps should be taken to improve the cash flows and reduce the working capital burden on start-ups and SMEs.

“In my opinion, policies that strengthen the country’s digital infrastructure are pivotal to the further growth of the sector at this juncture. Certain tax exemptions will go a long way in enabling more SMEs to come online and bolster the e-commerce space. Furthermore, the industry is also looking forward to policies that contribute towards encouraging industry players of varied scales to adopt technologies such as AI, ML, and Big Data Analytics to strengthen their value proposition and achieve business success in the online selling ecosystem,” shares Anurag Avula, CEO & Co-Founder, Shopmatic Group.

“While we have been lucky to be growing many fold during COVID-19, 2020 has been a testing year for most industries and sectors. I think the theme of this budget will be of relief and support given to businesses. Kirana stores and other MSMEs shall also benefit from the support expected in the budget,” adds Samarth Agrawal, Founder & CEO, MaxWholesale.

Ease of Doing Business

Retail-tech players seek measures that will help improve the ease of doing business for small and medium businesses in our country.

“We would see special recognition, status and incentives for startups working to digitize and modernize small businesses, building supply chain infrastructure, and/ or providing financial services to small businesses in our country,” Karthik Venkateswaran, Cofounder & CEO, Jumbotail says.

Simplification of GST

One among the major issues that has been much talked about these days is Goods and Services Tax (GST). MSMEs demand simplification of GST. 

“Besides, credit crunch is still a big challenge for the sector. No doubt, the Centre has done a lot in the recent months to help the COVID-hit sector, but still that is not enough. So, the more it can be done to cut down the interest rates and enhance the flow of credit to the sector, the better it is. Also, steps should be taken to attract FDI and reform the system of foreign exchange inflows and outflows so that MSMEs can work efficiently with global partners," states Sandip Chhettri, COO, Tradeindia.com.

Make In India Initiative

With an unprecedented pandemic-induced recession, 2020 has severely challenged MSMEs to sustain and survive. The survey conducted by the NBFC Magma Fincorp showed that an estimated 50 percent of MSMEs have witnessed around 20-50 percent contraction in their business earnings due to the Covid-19 pandemic, and this has had a ripple effect on unemployment and demand. With a post pandemic budget just around the corner, more focus should be emphasized on the Make in India initiative and big credibility should also be given to locals to set the economy right on a growth trajectory.

“Many offline businesses moved to online during 2020 because of the pandemic and are looking to take advantage of the power of digital. However, the current compliance and taxation laws for setting up an e-commerce entity are too stringent especially for startups with limited resources. In line with the ease of doing business initiative, we expect Budget 2021 to bring about significant compliance and taxation reforms for such e-commerce players. Budget 2021 should focus on enabling the development of MSMEs by providing them access to easy credit, reducing income tax rate and GST tax rate, and offering rebates to MSMEs willing to adopt new technologies. This will help in creating more employment opportunities. In the union budget 2021, it is for the Government to ensure that the right push is given to build a strong tech ecosystem with favorable tax policies and upskilling or reskilling the workforce in the segment to pave the way towards economic growth,” Akshay Hegde, Co-founder & Managing Director, ShakeDeal asserts.
 

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