LIVE Union Budget 2019: Live News, Analysis And Impact On Indian Startups

Goyal Boasts About India’s Climate Change Efforts, But Ground Reality Is Different

Piyush Goyal: India provided leadership to the global climate change effort. Our commitment to promote renewable energy is reflected in our initiative to set up the International Solar Alliance. Our installed solar generation capacity has increased 10 times in the last five years; lakhs of new jobs being created by the sector.

Inc42 Take: In line with the UN Paris Climate Change Summit 2015, India has taken a number of initiatives towards the adoption of cleantech and electric mobility. These initiatives have even been applauded at various international forums.

Considering 9 out of 10 of the most polluted cities in the world are in India, EV production and infrastructure development is the need-of-the-hour.

However, typical of the Indian government’s policy flip-flops and avoidance, no policy has been formulated so far to meet the electric mobility mission. The National Electric Mobility Mission Plan (NEMMP) aimed to have 6-7 Mn EVs by 2020, but we’re nowhere close to the target even 8 years later. Instead, we saw an announcement by the minister that India is targeting going 30% electric by 2030.

According to the FAME India Scheme, the total number of electric vehicles sold in India still stands at 2,64,953, with a yearly production of around 22K per year. In contrast, China sells over 870K EVs per year, accounting for 35% of the world market supply.

While there is no EV action plan or policy implemented yet, the government has simply extended the FAME subsidy scheme on an ad hoc basis till March 31. This, on its own, won’t encourage manufacturers to invest in EVs, which demand huge investments.

However, with conglomerates like SoftBank investing in India’s renewable energy sector, India is making substantial progress in the renewable energy sector. The installed solar generation capacity in the country has increased 10X in the last five years. Also, a number of schemes have been rolled out by the government to boost the renewable energy sector.

A lot more needs to be done. There lie skill and infrastructure gaps which the government needs to address. According to reports, India will be unable to meet its commitment to generate 175 GW energy by 2022 as the sector is plagued by policy inconsistencies and discom problems. India is aiming for a 40GW (40,000 MW) capacity solar rooftop by 2022 but has been able to install only 1334 MW grid-connected solar rooftops till November 2018.

Indian startups can certainly play a crucial role here with their innovative ideas, social impact, and reach out to untapped segments. With government’s inclination towards the sector, increased investor interest is also expected in the near term.

In Good News For Defence Startups, Goyal Commits Additional Funds For Defence

Piyush Goyal: We had promised to implement ‘One Rank One Pension’. We have already disbursed over INR 35,000 cr after implementing the scheme in true spirit. For securing our borders, govt increases defence budget to over INR 3 lakh crore. Will provide additional funds for defence if needed.

Inc42 Take:  There is good news for the ailing defence sector — the budget has been enhanced to over INR 3 lakh cr. The Modi government, to its credit, has brought startups into the defence space over the last few years. With a view to leverage defence-related startups and strengthen their collaboration with the defence forces — the Indian Army, Navy, and the Air Force — the government had launched the Defence India Startup Challenge on August 4, 2018.

A joint initiative of the Atal Innovation Mission, the Department of Industrial Policy and Promotion (DIPP), and the Defence Innovation Organisation (a ministry of defence initiative), the Defence India Startup Challenge aimed for startups to innovate defence solutions in 11 categories.

Along with the challenge, the defence minister also launched a number of initiatives to support startups working in defence and increase their engagement with the Indian forces. The overall objective was making India self-reliant when it comes to meeting its national defence requirements.

If the government is ready to back the scheme with more funding, it is definitely good news for startups.

However, credit usually comes with its fair share of criticism. On one hand, participating startups have earlier shared with Inc42 the sluggish nature of the Defence India Startup Challenge, where dates are extended often. Meanwhile, any war veterans have not been given benefits of the ‘One India One Rank pension’ scheme, which also reflects the limited applicability of the scheme, which the government claims — is a historic one.

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11.47 AM

Boost For Small Businesses: Faster Loans & Sourcing For SMEs, Women-Owned Enterprises

Piyush Goyal: We will source 25% material from SMEs and 3% from only women-owned SMEs for government industries. AI-based technology to be implemented for the upliftment of the MSME sector.

Inc42 Take: Goyal said that 9 AI portals will be made operational in India. However, the minister did not provide any clarity on data privacy and data protection. He also added that the government’s dedicated website for MSME borrowers offers automated processing of loans, which provides in-principal approval in less than an hour. The website reduces the turnaround time from 20-25 days to 59 minutes. Following the approval, the loan will be disbursed within a week. The commitment to source 25% material from SMEs and 3% from only women-owned SMEs will certainly bring up more small businesses in the country and have a direct impact on startups.

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11.45 AM

More LPG Connections To Drive Women’s Empowerment Initiatives

Piyush Goyal: 8 Cr free LPG connections will be provided under ‘Ujjwala’ Yojana.

Inc42 Take: This move can be considered as an important step towards women empowerment. As observed in the Rajasthan Yatra by Inc42, women’s empowerment in rural areas has been an important mandate for the government. According to 2015 data by United Nations Human Development Index, India stands at 135th position among 147 nations on women’s empowerment.

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11.40 AM

INR 500 Cr Mega Pension Scheme For Unorganised Sector

Piyush Goyal: A Mega Pension scheme of INR 500 cr for the unorganised sector, which will see an equal contribution from the government. A pension of Rs 3,000 is to be paid out per month to unorganised sector workers after retirement. About 10 cr workers will benefit from the scheme.

Inc42 Take: Ahead of the election, Goyal has announced a new pension scheme for workers and labourers from the unorganised sector, which will increase the Centre’s contribution to the sector by 4%. The pension amount has been increased from INR 3,500 to INR 7,000 per month.

The new pension scheme, called Pradhan Mantri Shram Yogi Mandhan, will provide an assured monthly pension of INR 3,000 per month, with a government contribution of INR 100 per month, for workers in the unorganised sector after 60 years of age.

During Budget 2015-16, finance minister Arun Jaitley had announced the Atal Pension Yojana (APY) as part of the National Pension Scheme. Similar to the pension scheme announced today, the APY too was focussed on all citizens in the unorganised sector who join the National Pension System (NPS) administered by the Pension Fund Regulatory and Development Authority (PFRDA).

Now, the government has announced another pension scheme with a budget allocation of INR 500 Cr. Clearly, the interim Budget seems to be interim in nature.

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11:27 AM

Small, Marginal Farmers To Get INR 6,000 Per Year In Direct Transfer

Piyush Goyal: Govt has approved for small and marginal farmers with land of up to 2 hectares. The government also give direct income support of Rs 6,000 per year to every small farmer. Poor farmers will get cash in three equal instalments under PM Kisan scheme along with increased Kisan credit limit. Goyal also announced a 2% interest subvention to farmers pursuing animal husbandry and fisheries.

Inc42 Take: The scheme will categorically benefit the majority of the landless farmers and will also prove to be a huge push to improve the income of the farmers. It will also have an indirect effect on the agritech startups which are working for improving the soil treatment and crop yield. However, the scheme would not affect the supply chain startups as the crop distribution system will remain centralised.

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11.26 AM

Scope For Startups In Animal Husbandry

Piyush Goyal: 2% interest subsidy to given to farmers involved in animal husbandry

Inc42 Take: The incentives will be passed on through the Kisan Credit Card scheme. Also, an additional 3% subsidy will be offered for timely payment of loans. This move is indicative of the government’s efforts to further push the agricultural community towards the digital economy. At the same time, this will be another opportunity for digital payment and agritech startups to align with the needs of the farmers, in line with the government’s efforts.

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11.25 AM

Pradhan Mantri Kisan Samman Nidhi Scheme Approved

Piyush Goyal: The Budget aims to provide assured income support to small and marginal farmers under the Pradhan Mantri Kisan Samman Nidhi initiative. Under this initiative, INR 6K per year per farmer will be transferred directly to farmers’ bank accounts in three instalments. Farmers with less than 2 hectares landholding are eligible for the scheme.

Keeping in view the distress in India’s agricultural sector, the government has also revised the minimum support price (MSP) in favour of farmers. Small and fragmented landholdings have led to a decline in farm income. 

The programme will be effective December 1, 2018, and the money will be directly transferred into farmers’ account. The expected spend on this scheme is INR 75,000 cr, said Goyal.

Inc42 Take: The initiative is in line with the government’s initiative to eliminate middlemen and help farmers realise better prices for their produce. Agricultural growth in India has been fairly volatile over the past decade, ranging from 5.8% in 2005-06 to 0.4% in 2009-10 and -0.2% in 2014-15. The decision is expected to improve the situation.

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11:24 AM

10 Lakh People Treated Under Ayushman Bharat So Far

Piyush Goyal: We organised the world’s largest healthcare programme — Ayushman Bharat — for 50 cr people; 10 lakh have benefited from the programme. We also opened the 22nd AIIMS in Haryana. Ayushman Bharat, the world’s largest healthcare programme, was launched to provide medical care to almost 50 cr people, resulting in savings of INR 3,000 crore by poor families.

 

Inc42 Take: As expected, interim finance minister Piyush Goyal spoke in length about the Modi government’s healthcare initiatives, the biggest among them being the world’s largest public health insurance scheme — Ayushman Bharat — launched last year.

The initiative is in line with the National Health Policy, which aims to double the government spend on healthcare — from 1.15 % of the GDP to 2.5% of the GDP by 2025. However, the budgetary allocation of INR 52,800 Cr for health in 2018-19 was hardly 5% higher than that of 2017-18 (INR 50,079.6 Cr).

Ayushman Bharat enables private players, including healthtech startups, to provide healthcare infrastructure on the basis of PPP models.

However, there isn’t much clarity yet on the Budget allocation for this health insurance programme, which claims to provide insurance to the common man of up to INR 5 lakh per family per year for hospitalisation expenses.

Increasing medical inflation is, however, adding to the worry to private players.

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11:22 AM

Electricity: Way To Drive Digitisation

Piyush Goyal: Everybody will get an electricity connection in the near future. We have provided 143 crore electricity bulbs to the poor in the last few years.

Inc42 Take: Goyal’s statement was met with heavy cheering from government supporters as well as booing from the opposing party members. Increased availability of electricity will automatically drive digitisation growth and increase internet penetration. Currently, internet penetration in rural India is 21.35%. This growth is set to help the consumer startups expand their reach as previously this was a major roadblock for startups to expand beyond Tier I cities.

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11.10 AM

‘Govt Has Achieved Macro-Economic Stability In Last 5 Years’

Piyush Goyal starts by recounting the achievements of the Modi-led government. Goyal claims that India has enjoyed the best phase of macroeconomic stability in the past 5 years. The fiscal deficit was 3.4% of the GDP for the financial year and has been set at 3.4 per cent for the next fiscal as well.

Inc42 Take: With a declining fiscal deficit, the central government may increase its allotment of funds for agricultural and infrastructural development to facilitate the prosperity of other industries. However, as the fiscal deficit target was set at 3.3% for 2018, the government has missed the target and has also increased the fiscal deficit estimate for the next financial year to 3.4%. This shows that the deficit is still essentially an unsolved problem.

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