Budget 2021: Digital players expect bold measures, structural reforms, grants for startups

Spike in digital consumption during the various phases of lockdown and the following unlock phase undoubtedly accelerated the digitization of India Inc. Ahead of Budget 2021, players in the fraternity expect allocations that support the growth and boost numbers, giving it the push it needs.

“The COVID Pandemic has pushed the Indian GDP in a negative state, but, at the same time, there is no denying that the pandemic has accelerated the digital push across the country. Digital has become the core of every business model in the country. The government is also working effectively to enhance the contribution of the digital economy to 20 per cent of GDP in the next five years.  India is ready to join the world in this thrilling digital-ready race, which will help boost the Indian Economy and stimulate job creation. In this year's budget, we expect the Government to lower the income tax slabs for businesses to increase profitability and future investments. GST should be rationalized to 12-15 per cent to revive demand, and at the same time, there is a need to streamline GST/ Income Tax/ E-Invoicing, etc to promote the ease of doing business,” said Himanshu Arya, Founder & CEO, at digital marketing agency Grapes Digital.

According to Nirav Lalan, Global Chief Operating Officer at a digital marketing agency, Team Pumpkin the accelerated push to digital during COVID-19 has given more powers in the hands of consumers and now the content, medium and tonality of the ads are being directly controlled by them.

“Linear media clearly took a backseat and digital immediately overtook the space. To stay current and connected, every brand had to revisit their communication and marketing strategies. Even the most orthodox brands shifted to the unorthodox media and relied heavily on social platforms to keep their customers engaged,” he said.

Experts believe when everybody is talking about going back to the ‘old’ normal in the post-vaccine phase, traditional marketing and advertising are bouncing back.

“Despite these contemplations, digital marketing and non-linear advertising will still hold the crown. And keeping the upturn of events in mind, we are hoping this year’s budget to also focus on digital and technology like last year. However, in Budget 2021, we expect some bold measures by the government to boost demand and accelerate the pandemic-impacted sluggish economy,” Lalan added.

Nikhil Rungta, Country Manager, India at media-tech company Verizon Media looks forward to a progressive budget with structural reforms that drive consumption and growth.

“In particular, I see an opportunity for a 'WIN' formula focused on ‘Women, Infrastructure and Norms.’ Job market trends show a disproportionate increase in women’s unemployment during the pandemic. This budget must empower more women to take their place in the workforce, to drive inclusive economic growth. Secondly, we are now seeing even smaller, traditional businesses think digital -- the time is ripe to expedite investments in infrastructure, specifically digital infrastructure to increase digital inclusion for Indians across our towns and villages. Lastly, we would like the government to relax the norms around ease of doing business to encourage enterprises and startups to create a truly Aatmanirbhar Bharat,” he said.

Full-service marketing agency VMLY&R Commerce Encompass CEO Ranjit Raina said that the budget should give a boost to consumption which in turn will help advertising, the lifeblood of the M&E sector.

"While the road to recovery post-Covid-19 is going to be slow it’s imperative that it stays steady. Budget 2021 will have a major impact on ensuring that the growth remains steady and spurs much-needed growth. Advertising growth is directly linked to GDP growth and any steps that give consumption a boost will inevitably benefit the industry. Personal taxation benefits always tend to help increase consumption, especially in sectors like FMCG, Auto, and E-Comm. As key contributors to advertising, this naturally has a positive effect on advertising spends. I am hoping that budget 2021 will focus on lowering the personal tax rates. It is very important to revive consumer confidence and give consumption a boost. From a business standpoint, I do feel we need to rationalize the GST in advertising and across the experiential marketing sector. 18% is very high, the fact that cashflows are also impacted by GST rules exacerbates the economic hardship. A review and relaxation of GST would be a very positive step," Raina said.

Playtoome Founder & CEO Keerthivasan Subramanian said, "Due to the pandemic, the funding has dried up in the startup sector. This has already resulted in aspiring entrepreneurs deferring their businesses and launches. The situation is making it challenging for early-stage startups too which have just sprouted and need a constant working capital resource. Also, there has been a reduction in foreign investments. It is very important for the budget to take under consideration the difficult times that the new startups are going through and announce steps that would encourage the inflow of financial support to put the wheel in motion again." 

What started as PM’s push for Digital India has taken itself to a new height with a rapid increase in usage and access. Players feel it's now time to add to the vision beyond just digital infrastructure, governance, and citizen empowerment and add a pillar of experiences.

XR Central co-founder Anshul Agarwal said, "We hope that many special projects and grants will be announced by the government only for the technology startups working on cutting edge technologies of extended reality (AR/VR/MR). This will not only take the Digital India campaign to the next level but also strengthen the Make In India campaign. These special projects and grants will help technology startups to get a platform to compete with global technology companies.”

At a macro level, the budget needs to take the right measures to boost confidence and consumption to kick start the economy felt Ajay Verma, Managing Partner and Co-founder, Enormous Brands.  He said, “I would say direct taxation on manufacturing and service sector needs to reduce and this gets subsidised by stringent taxation policy for International digital platforms who are taking away a large share and are allowed to go scot-free from the Indian taxation point of view. At a micro-level our PM is propagating Atmanirbhar Bharat, so the Indian independent agencies need to see some tax relaxations or incentives, it would be a welcome initiative.”