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Union Budget 2023: The wish list from the Warehousing, Logistics, Cold Chain, EduTech, and Start-Up sectors

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Start-Up sector
“The industry is predicted to grow to USD 4 billion by 2025. As per analysts the Union budget for 2023–24 is expected to be INR 42.40 lakh crore, with INR 3.12 lakh crore set aside for education. The government’s goal to establish a National Educational Technology Forum is a major boost to tech-enabled learning solutions, and the direct beneficiaries of the scheme are students in India. Ms. Nirmala Sitharaman, Finance Minister, has allocated INR 50,000 crores to the National Research Foundation in 2021, as well as INR 40 crore to Ekalavya Schools. The Union Cabinet has authorized the upgrade of 14,500 schools for Rs 27,360 crores over five years under the PM Shri Schools project. Administrative frameworks like Samagra Shiksha, KVS, and NVS are already in place, and these will be deployed to create model schools with cutting-edge facilities, teaching strategies, and technological advancements for other government schools to follow.

When it comes to upskilling government school teachers with digital-first learning methods, the Ed-tech sector anticipates additional benefits such as subsidized or incentivized training sessions, Subsidies for Ed-Tech start-ups and innovators for promoting non-English/regional language-compatible learning tools, Access to or easier opportunities for collaboration with government institutes through platforms like GeM (GoI’s e-marketplace for SMEs/ MSMEs/ and start-ups), Subsidies/tax rebates and incentives for international knowledge sharing and collaborations for innovation in education technology. Most importantly, all stakeholders in education should keep in mind that any learning model developed should be designed with an underlying pedagogical model and standards of measurement.” – Pankaj Agarwal, Founder & CEO of TagHive Inc

 

Cold Chain Logistics and a Tech Start-Up sector

The Indian cold supply chain industry has rapidly grown, specially post COVID. In 2021, the Indian cold chain logistics market was valued at $24.62 Billion, and it is expected to reach $53.07 Billion by 2027, growing at a CAGR of 13.66% from 2021 to 2027. However, currently, the cold supply chain sector is highly fragmented and marred with sever challenges which have led to wastage of 40% of the over 400 million MT of perishable food! And according to the Associated Chamber of Commerce, our post-harvest losses amount to a whopping $14bn!

While there has been a strong focus by the government on Logistics as a sector, a renewed and closer look at Cold Supply Chain would benefit in cutting losses and improving the hunger index while also empowering agriculture, food & dairy and process food sectors, along with pharma and healthcare. Listed here are a few points that, if considered in the Union Budget 2023-24, would go a long way in creating a robust, seamless and effective cold supply chain network:

–              Capital support/ FDI for technology adoption: The huge capital investment required for digital adoption in the cold supply chain sector, is a massive challenge. With provisions for FDI and / or capital support, it will be easier to bring in the best in tech innovations that can be applied across the cold supply chain and truly empower all stakeholders to embrace smart tech.

–              Tax holidays/ subsidies for critical Cold Storage: Temperature controlled warehousing is an investment intensive yet one of the most crucial aspects of the cold supply chain and a lot of logistic service providers/ farmers/ intermediary stakeholders end up compromising on product quality due to lack of access to efficient cold storage. Subsidies focused on the unique cold storage needs for sectors like fresh foods, dairy, meat, other frozen and processed food as well as pharma products and intermediaries would go a long way

–              Public Private Partnerships for Agriculture cold supply chains: A country battling high hunger rates cannot afford to lose 40% of its food to logistics issues. Healthy Public Private Partnerships can help easier access to effective cold supply chain infrastructure which can help farmers and the government to drive efficient food distribution and improved quality of produce. – Swarup Bose, Founder & CEO of Celcius Logistics

 

Warehousing sector and Contract Logistics

In the post COVID era, the Indian logistics and supply chain sector has emerged as a significant backbone for the Indian economy and continues to be the important step to strengthening India’s position as a global economic power. While disruption through geopolitical stressors, further threatened international trade, India has emerged as a stable trade and business economy, thanks to positive government policies. As the Indian government enhances its focus on infrastructure development and bolstering Indian exports through various schemes, I would like to draw attention to the warehousing and contract logistic sector that has become vital in terms of building global supply chains. Currently, the warehousing sector is looking to accelerate digital adoption, embrace greener practices that match international standards, and drive value added collaborations with the manufacturing sector. In the upcoming budget, a focus on the following aspects will be beneficial for the sector:

  1. Reduction in Steel duty/ prices for industrial warehouse construction would be beneficial as up to 50% of the cost of construction of a warehouse is attributed to steel as a major component.
  2. Enhanced focus on improving the road transport infrastructure which can help decongest the existing warehousing hubs, reduce rentals and unlock better value for land available for warehousing.
  3. The government can additionally consider capital subsidies for the construction of grade-A warehouses in smaller towns.
  4. Better Public-Private Partnerships to setup of multi-modal logistics parks with better connectivity to new expressways.
  5. Reduction in solar panel import duties to help reduce capex investments and a re-look at the tax structure and subsidies for environmentally responsible practices
  6. Easier and attractive loans/ access to funds for tech adoption and setting up smart warehouses, especially for the Cold storage and speciality warehousing segment
  7. A focus on easier access to investment for industrial warehousing, including simpler processes for FDI, would be appealing in the 2023 budget.

Varun Gada, Director of Liladhar Pasoo’s LogiScience

 

IT & Telecom Industry

 “The telecom sector will continue to play a pivotal role in India’s growth story as a key enabler of growth and development. The nationwide rollout of 5G will be central to this growth in the next year. Going further, we expect the government to minimize the import of several telecom-related components. The Government should focus on investing in R&D and manufacturing to boost the telecom sector. In this regard, incentive schemes to push the ‘Make in India’ drive for domestic manufacturing can help. Apart from that, incentive plans should be introduced for innovation along with a reduction in license fees. We also expect duty exemptions on key telecom equipment. The telecom sector also seeks input tax credits against GST paid on telecom towers. We also seek a reduction in GST rates to reduce the financial burden on TSP/passive infrastructure providers. The sector also seeks stimulus packages from the budget for the penetration and proliferation of rural areas to achieve the dream of a Digital India. In addition to this, smooth and lucrative reforms for 5G rollouts are expected, so that technology firms do not face problems in acquiring private networks. Incentives for promoting new technologies to increase efficiency for the sector are expected as well.” – Gaurav Gandhi, Founder and CEO of Echelon Edge Pvt Ltd.

 

EdTech

Budget 2023 is expected to deliver much assistance to EdTech companies in the form of ease of doing business and faster document approval, as well as incentive policies to support innovation and job creation. A strong educational network, we believe, is critical for stimulating the economy and fostering new ideas, technologies, and next-generation businesses. Currently, taxation in India is very high in comparison to other nations, giving investors room for a second thoughts before investing. Therefore, for Ed-tech firms to lure foreign or domestic funding and accelerate business momentum, the government must lower taxes such as dividend tax and capital gains tax to gain investors’ faith to invest in India.— said Mr. Aashay Mishra, Co-founder & COO of PrepInsta

India has the highest proportion of generation Z and millennials interested in digital learning to improve their skills and prepare for the technical jobs. Despite Ed-tech’s success post COVID-19 pandemic, India still falls short of technological resources to provide eLearning to aspirants. Over the years we have come to realise how students suffer because of inadequate internet speed and absence of smartphones, particularly in tier 2 and tier 3 cities. Therefore, from the budget 2023, we anticipate government to ramp up connectivity and offer schemes that bridge the accessibility gap for smart devices. Doing so can enhance the skills of aspiring students as education can be managed and customized as per their preferences. — said Mr. Atulya Kaushik, Co-founder & CEO of PrepInsta

Since the COVID-19 pandemic’s outbreak, EdTech services have massively lowered the country’s skill gaps by linking the country‘s agrarian populace with digital learning. Without a doubt, the government has confined funding to develop high-quality educational infrastructure in outlying areas, but with the adoption of smart tools and hybrid learning models, we can conquer the large percentage of areas where modern education is still missing. Therefore, loan and finance practises must be simplified for Ed- tech startups, which also serve as a driving force in the Indian economy by retaining India’s brilliant minds.— said Mr. Manish Agarwal, Co-founder & CMO of PrepInsta

 

SAAS Startup
Over years, the popularity of Artificial Intelligence (Al) has skyrocketed across industry sectors as a result of the greater push toward automation. While previous budgets acknowledged the relevance of AI technology in modernising India, we now expect prospects and large government initiatives from budget 2023 which can position India as one of the world’s favoured Al leaders. Since we have an AI-powered voice-based product, we are also anticipating announcements and measures to improve digital infrastructure such as high-speed internet and data centres. Moreover, as the founder of the startup, I eagerly look forward to funding and investment opportunities such as venture capital and angel funding to accelerate our business momentum.– said  Mr. Sarvagya Mishra, Co-founder & Director of SuperBot (PinnacleWorks)
In the aftermath of COVID-19, almost every second business migrated online after recognizing the significance of automation. Given the centre’s objective for a digitally robust Bharat, Al technology is one of the major sectors that anticipates the Budget 2023 to unveil AI-friendly policies that can revolutionize India’s tech ecosystem. We are hopeful that easier loan disbursements, electronic authorizations, and incentive programs for startups to use digital finance can advance the growth rate of Indian startups. With AI- technology playing a critical function in shaping the nation’s economy, the Union Budget should also include tax relaxation to spur innovation as well as minimize regulatory burdens to aid in the ease of doing business.— said  Mr. Ankit Ruia, Director & CTO of SuperBot (PinnacleWorks)

As a technology start-up in the food and beverage industry, SupplyNote is keenly aware of the challenges facing the sector. From high taxes to complex liquor regulations and difficulties in obtaining permits and licenses, the industry is in dire need of a more streamlined and business-friendly environment. We hope that the Budget 2023 will address these issues by simplifying the tax bracket and easing regulations around liquor, permits and licenses. Additionally, as the food and beverage industry is one of the largest job creators in the country, we look forward to the government creating a positive environment for the sector, including relaxation on taxes for start-ups and the positive induction of private companies in the government ecosystem. We also hope to see the impactful implementation of ONDC, as it will help to digitize and optimize the backend operations of food businesses and increase profitability.-– said Mr. Kushang, Co-founder & CEO of SupplyNote

In the eye of rising costs and reduced margins, we need a budget that supports interest-free loans, allows greater subsidies and reduces tax structure. Another, is the non availability of input tax credit (ITC) that impacts the P&Ls adversely. We hope the union budget 2023-24 will address these issues to accelerate the growth of the F&B sector– said Mr. Harshit Mittal, Co-founder & CTO of SupplyNote

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