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Women Employment, Pandemic – Budget 2021

The Budget 2021-22 has covered welfare scheme for women plantation workers in Assam and West Bengal, the reduced margin money requirements from 25% to 15% under the scheme of Stand Up India and permission to work in all sectors and also in night shifts with more security. However, these measures will have limited contribution for women who are worst hit by the pandemic. Practically, the women entrepreneurs, domestic helps in cities, at construction sites, and in handicraft and retail units needed a boost and some incentives. Data show that more than eight months after the pandemic, 13% fewer women than a year ago were employed or looking for jobs, compared to 2% fewer men!

Quote by Rupinder Malik on Women Employment, Pandemic – Budget 2021 published in Mondaq.

Fintech – Budget 2021

Roadmap for revival of the economy from the pandemic laden year of 2020-21 has been dealt holistically by Budget 2021-22. The 2-step, short-term – long-term revival approach, countering the healthcare concerns and simultaneously concretizing the self-reliant India goal is a welcomed note in the 3rd Sitharaman budget. The Sunrise ‘Fintech’ Sector has garnered heightened reliance by the industries and consumers alike. While the ‘FinTech’ tab on the main page of RBI was a move towards recognizing the importance of the new-age sector – the announcement of developing a Fin-Tech hub will give the fintech players an added participating impetus. Adding to the impetus is the INR 1,500 crore allocation to give a push to the developing digital payments infrastructure. The regulatory sandbox incentives coupled with the promising tone of the budget towards the sunrise sector shows a lot of scope for India to become a major player in the fintech industry over the globe.

Quote by Sidharrth Shankar on Fintech – Budget 2021 published in Mondaq.

Healthcare Sector – Budget 2021

The experiences of Covid-19 have delineated the importance for emerging economies to invest in healthcare infrastructure at all levels – primary, secondary and tertiary. The budgetary announcements of the outlay of INR 64,180 crore under the Aatmanirbhar Swastha Bharat Yojana have hit the bulls eye in this area. The approach followed by the Indian government is a marked departure from existing practices of reduction of out-of-pocket expenditure of the citizens.

Quote by Sidharrth Shankar on Healthcare Sector  – Budget 2021 published in Mondaq.

Transport sector – Budget 2021

Monetization of dedicated freight corridor after commissioning will induce not only operational efficiencies but also the desired level of liquidity for expanding and increasing the pace of rollout of DFC corridor and effectiveness of India’s logistics and transport sector.  Such asset monetisation will attract both, domestic and international investors, if its underpinned by an effective institutional and regulatory framework for DFC corridor. National Asset Monetisation pipeline coupled with focus on infrastructure spending – especially roads, ports and airports and railways, with conciliatory mechanism for dispute resolution in contracts with PSU will catalyse investments in the infrastructure sector, and put the economy on high growth plan and give the economy the required push.

Quote on Transport sector – Budget 2021 by Vishnu Sudarsan published in Mondaq.

Decriminalization under the LLP Act, 2008 – Budget 2021

On corporate governance front, we were expecting the decriminalization under the LLP Act, 2008 and this is a good move to ease the doing of business in India. To relax the compliance burden, the definition of Small Companies is expanded by increasing the thresholds for paid-up capital from ‘not exceeding INR 50 Lakh’ to ‘not exceeding INR 2 Crore’ and turnover from ‘not exceeding INR 2 Crore’ to ‘not exceeding INR 20 Crore’. Further, the Government seems to incentivize the start-ups by allowing One Person Companies (OPCs) to grow without any restrictions on paid-up capital and turnover; the residency limit to set up an OPC is reduced from 182 days to 120 days and Non Resident Indians are permitted to incorporate OPCs.

Quote by Rupinder Mailk on Decriminalization under the LLP Act, 2008 published in Media Brief, Mondaq and Connexionblog.

JSA Viewpoint – Aviation sector, Budget 2021

Finance Minister  Nirmala Sitharaman while presenting the Union Budget for 2021-22 as part of the tax incentives to International Financial Services Centre (IFSC) in GIFT City has proposed  tax holiday for capital gains for aircraft leasing companies and tax exemption for aircraft lease rentals paid to foreign lessors.

This move can be considered to be a first step towards creating a domestic aircraft leasing hub in India, since till now, the Indian aviation industry has been dominated by lessors from Ireland, Dubai and Hong Kong due to their attractive tax policies. This move is likely to incentivise leasing companies to set up operations here in the GIFT city and making it a global hub. However, as seen from the past experience from around the world the results may be not be as immediate as expected, Ireland took almost 40 years to be the world’s top aircraft leasing hub. Singapore, too, has invested time and money attracting lessors. Along with providing tax incentives, the government will also need to amend regulations and alter double tax avoidance treaties with other countries to make aircraft leasing business in India a reality. Though tax incentives is a good step towards building this segment in India, the government will need to create a regulatory framework with proper financial structuring so that it could also encourage deep pocketed domestic investment in aircraft leasing business.

JSA Viewpoint by Poonam Verma.

Direct Tax Proposals – Budget, 2021

While the Finance Minister briefly touched upon the direct tax proposals, fine print reveals many proposals that may have far reaching impact. Taxation of gains on ULIPs has been brought at par with Mutual Funds, Interest on PF contributions beyond 2.5 lacs has been made taxable, Slump Sale provisions shall cover other modes of transfer of business as well and anomaly leading to double taxation of income that was subjected to Equalisation Levy in FY 2020-21 has been rectified. Further, Budget proposals that seek to promote reduction in time limit for reopening assessment, increasing turnover threshold for tax audits, and providing pre-filled tax returns are aimed at bringing in certainty and making tax compliances easier. These measures coupled with use of Artificial Intelligence and Analytics shall boost the Direct Tax to GDP ratio in ensuing years.

Quote by Kumarmanglam Vijay published in India Tech Online.

Education Sector – Budget 2021

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.

Quote by Nitin Potdar published in Business World, Education Times, Skill Outlook, Online and You, Medianews4u, CEO Insights India and Data Quest.