The union budget 2021-22 and its impact on startups

Team TheCodeWork

3 February 2021 9 minutes read
content
Reading Time: 9 minutes

The union budget 2021-22

Everyone is talking about it since Monday, isn’t it? Now tell me something, did you feel left out during these discussions? Did you ever ask yourself, why this is even important to you? Well, hi there! I used to face the same issues a few years back. This is when I started reading about the topics concerning the nation and society as a whole. Soon I found myself reading up for personal updates rather than any superficial discussion.  So, yes, I have the answers for you. 

See, the union budget is simply an attempt of the union government to keep a track of their expenses. In which sectors they want to spend and from which sectors they want to earn revenue. It’s a modest expense tracker for the nation.  

So why is it important to you? 

Well, 

Interesting, right? So, let me walk you through then.

The union finance minister, Mrs Nirmala Sitharaman tabled India’s first-ever paperless budget 2021-22 in the Parliament on Monday, February 1, 2021. The theme of this year’s budget includes economic revival, inclusive growth and the COVID-19 pandemic.

Before getting to the serious part, let’s get to know the fun facts first. Shall we?

What was new in the budget session?

This was the first time that the budget was presented or read out rather, from a digital format. The finance minister, Mrs Nirmala Sitharaman ditched the traditional bahi-khata or bougette this year.

union budget 2021 India
Source: The Hindu

Any diversion from the norm is always fascinating and hence I decided to share this with you.

Moving on, want to hear some cool facts about the finance minister, Mrs Nirmala Sitharaman? Yes, you do! Follow up!

The one with the finance minister

Trust me guys, this is a very tiny yet informative bit here about the union finance minister. You will love to flaunt this particular set of information during discussions. Well, I do. So here we go!

Indian finance minister Nirmala Sitharama

Tell me, how cool is it to know these facts? 

Also, before presenting the budget, she quoted these lines by Rabindranath Tagore – “Faith is the bird that feels the light when the dawn is still dark “. 

What she meant was, the last year and continuing has been in the shackles of the global pandemic. However, even during these times, “India is well-poised to be the land of hope and promise.”

Mini-budgets and their connection with the union budget

With the global pandemic hitting the market in 2020, we all suffered to some or the other extent, didn’t we? However, the lockdown situation did hit the economy pretty hard. And that was obvious too, right? I mean, with everything shut out, what do you expect!

But the government can’t obviously sit back and say this. They needed to act! So what they did to handle the induced economic degradation, was that they rolled out a 30 lakh crore package. This package covered mini budgets that came out every 1-2 months during the lockdown, as per the demand of the situation. 

What’s the connection of this with the union budget, you ask? Well, the Hon’ble Prime Minister Mr Narendra Modi had announced that the Union budget for the FY 2021-22, would be a continuation of the mini-budgets that they released during 2020.

Have a look at the mini budgets:

The government had also released V-shaped recovery graphs to show the revival of the Indian economy with the implementation of these mini-budgets. Have a look here:

rebound graph of Indian economy
Source: Twitter

The theme of the union budget 2021-22

This is a very delicate part here. The budget comes with a theme every year. The sole purpose of this is to connect with the citizens and provide them with a simple understanding of what the budget holds for them. Interesting, I know.

Want to know about this year’s theme? Well, it is undoubtedly and unexpectedly, Atmanirbhar Bharat. After all, the prime minister has been stressing on this since last year. 

To make our understanding of the union budget clearer, they categorized the budget into 6 pillars to focus on. Have a look:

Now one thing is for sure, we are not here for an expert opinion on what the entire budget holds for the economy, right? We at TheCodeWork, are a tech-based product & services company that deals in the following industries, namely:

Union Budget for startup education healthcare

THE BUDGET

So what we are going to do here, is discuss the chunks of the union budget that deals with the above mentioned 4 sectors. Correspondingly, we can draw a conclusion as to how it will impact niche companies like us and you as well.

You do not want to miss this, let’s begin!

Healthcare Union Budget 2021

I am sure you will agree with me when I say, this is a much-needed move by the government.

Startups / MSME

Union budget effects on startups

The proposal to set up a top-notch FinTech hub in GIFT City at Gandhinagar is a marvelous prospect to connect the Indian FinTech businesses and startups to the global financial networks. Don’t you agree? Also, the Incentivisation of OPC is a much welcome move for the startup ecosystem of the nation.

Education

union budget 2021 for education

Now, don’t you think the aim to invest in strengthening 15,000 schools is a promising approach? With all the digital education platforms at present, it is pretty evident that education has become a hybrid concept in India as well as the world.

This is where the EduTech startups and businesses can ally with the government to help them achieve the goals of the national education policy in a better and faster way.

Digital Payment

union budget 2021 on digital payment methods

With the investment of Rs. 1500 crore in this sector a huge number of prospects awaits the Fintech sector. Want to know the best part? This will lead to huge-scale digital financial literacy even in remote areas. Now that’s something really cool, don’t you think!

In addition to all of that, the funds will help to develop substitutions to the Zero MDR (Merchant discount rate) policy. Want a little bit of help with that? Well, in the budget of 2019, the government proposed that the companies having an annual turnover of Rs. 50 crore, must provide digital payment facilities to their respective customers. Easy, right?

How did the startups react to the national budget 2021?

Okay, so now that we have moved past the anchor points that hold the budget to the intent of the blog, let’s have a sneak peek at what some of the niche and early-stage startups have to say about the budget. Are you on-board? This will be fun, come on!

He has further commented that – “This policy would ideally work for hi-tech innovators who can now use this policy to build licensing agreements for their innovations in India, without the need for complicated processes of setting up a company.”

co-founder of UtterApp Ninad Vengurlekar
Ninad Vengurlekar, Source: YourStory

She says, “The provisions like the extension of tax holiday and exemption of capital gains will help to boost the investment in the startups.”

Co-founder of Daftar Sunanda Verma Bhatta
Sunanda Verma Bhatta, Source: Live News India

He says, I see a huge benefit for our start-up in the coming years as there will not be any tax audit and we will still take benefits of being a Private Limited company.”

Thoughtful indeed!

Founder of Eadicct Ashutosh Gawade
Ashutosh Gawade,Source: The Indian Express

He adds – “This support from the government will encourage an increasing number of students and young citizens to get aboard the start-up journey and in turn create more employment and create wealth.”

Co-founder of Pawshbox Malhar Katare
Malhar Katare,Source: Live News India

This looks promising, eh? The reactions, I mean! Let’s hope things turn out the way we all are expecting it to. Good luck to all of us!

Overview

So? How do you feel after reading the entire thing? A little bit more informed and woke, I hope! But if you are here with me till now, then, of course, I am assuming the right thing. 

With the overall analysis and reactions from people who are actually active in the market, it feels like the finance minister has delivered a New Year gift to all the start-ups here! They are welcoming the move of the Government shifting their focus and preference to the startup culture. Atmanirbhar, right?

If you happen to be a startup yourself, then let me introduce TheCodeWork to you! We are a bunch of dedicated individuals working as an agile team to deliver MVP or the minimum viable product to niche and early-stage startups. Reach out to us at TheCodework, in case you need one! 

We are here for you!

Happy brainstorming!

Team TheCodeWork

Our Content Team at TheCodeWork believes in quality content. We write everything related to startups and products at large. We publish our blog every Wednesday. Subscribe to our newsletter to get notified on our awesome content.