 So hello everyone and this is Ritu Maarya joining you live on the budget review for budget 2021 indeed a very short budget, probably one of the shortest I have ever seen in the history of budgets being presented in India but of course the finance minister Nirmala Sita Raman she kept it quite wonderful and she also kept it quite vibrant and has also promised a great and lot more for this country as she has given SOPS which will help a lot of financial and capital expenditures to be made which will further lead to great capital employment generation in this country and also lead to a lot many investments being made by other sectors which could be from real estate to manufacturing and of course make in India got a very very large push in this particular budget and therefore we would see greater manufacturing happen in India and also India becoming a large manufacturing hub. So today we joined first by Mr. Siddharth Fai who is the partner on 3-4 capital and is going to sort of share with us as to what the budget did for the startups and overall for the economy what is expected out of coming out of the budget. We're also joined by our editors Bonita and Saurabh who will be asking questions. So in case you have questions either on Facebook live or on Zoom, please feel free to ask and we will get our experts to answer them for you. So Siddharth, let me start by asking you what do you think about the budget? How are you going to rate it? Any sort of out of 20? How are you going to sort of give what numbers are you going to give to it? And also to say that you know particularly for startups the budget has seen some forthcomings and how do you rate this budget and how do you see it panning out for startups in the coming year? I think overall on a scale of 1 to 20 I think this budget is being about 16%. I think one of the biggest pros of this budget is the fact that the budget hasn't actually introduced any new taxes besides the small agricultural tax or petrol and a few other aspects because despite the stock market actually booming a large portion of the country is still actually struggling in terms of cash flows itself and business is yet to resume back as of now. So any new introduction of taxes would have actually been severely burdensome upon the entire country and I'm very glad to see that the government actually managed to increase expenditure on healthcare, increased expenditure on infrastructure in CAPEX as well as education without resorting to the need to actually go and raise and impose on first taxes upon the entire populace. I think that's been one of the biggest strong points of this entire budget. The budget itself has also actually articulated the stance of the government in various other regards. The fact that the increase in expenditure in terms of healthcare and education. These are two sectors where startups are going to see have seen a large amount of buoyancy over the past three to four years, especially ed tech since the beginning of the lockdown and we should see with this particular charges coming in place as well as the fact that the government doesn't want to do everything by itself but actually wants to start partnering with the private sector on this will actually all go very well for India startups in both these particular sections and both these particular sectors also. Overall for the entire startups, I think the two biggest changes the startups have seen is the fact that the tax holiday for in terms of three out of ten years, the holiday for startups has been extended by a period of one year, as well as the fact that any any investment into a startup at the tax week that gets a company's that has also been extended by a year itself. I must actually underscore the fact that the existing issues in terms of actually giving the IMB certification for both these particular for both the particular sections hasn't actually been addressed by the finance minister so far. This has been one of the biggest issues in the entire thing because as for DPIT they only about 400 startups out of 50,000 startups in the country who are actually eligible for these two particular sections. And the biggest pain point of the year is the fact there's a group of bureaucrats who actually has to certify you as being innovative in order for you to actually avail of this. This means that the bureaucracy believes only 400 innovative startups in the entire country out of 50,000 startups. It actually goes, which actually underserves the entire market as a whole and hopefully with the rise of the national startup advisory council, they should actually see someone to reform this particular thing over the next year and startups should actually see a lot more buoyancy in that regard. Because I must underscore the fact that the honorable finance prime minister actually expects startups in the innovation economy to contribute $1 trillion by the year 2025. In order for this we're going to start seeing a lot more investment into innovation because India requires a lot more tax breaks in order to start incentivizing investments into startups. One more point I think that actually augurs well for the entire investing industry, especially startups as well as private equity as a whole is a fact that the government is now allowed for funds that have been domiciled in either Mauritius or Singapore any of the other jurisdictions to actually move to gift city IFSC without having to pay any tax. This has been, this will be a huge boost for a number of them. Because this will essentially help on show the off your which has been a, it's been a flagship project of the IDCA in the venture capitalization and others itself. This will help create a much more stronger and vibrant for the fund ecosystem and fund management ecosystem within the country. And hopefully in some time we may no longer need the likes of Mauritius and other stepping stones into Indian equities that foreign investors can directly take a portion in the equities without having to resort to intermediate jurisdictions for this. So the moment that's happening that's the biggest box of confidence for foreign capital coming into the country, and this budget actually done a massive stoke in enabling that to happen so far. Sure. That's that's that's a wonderful framework that you have built over there. But you know, since you mentioned that it's a, it's a great budget for health care and I think the layout overall has increased substantially this year. So what, what do you see panning out for health care startups in India do you see something as as big or a rocket change happening just like it happened for a tech during the pandemic. No, it will, it will because see I think one of the biggest portion is coming out in healthcare as of now is the fact that the bar of health staff, which is similar to what other actually did for fintech and payments and everything with the startups are coming into work and start being utilized by the government sometime soon. And that actually becomes that's become one of the strongest points because once a strong foundation that technology framework is actually built startups can actually start building products and services on top of this entire portion on top of this entire platform itself and similar to what we've seen happen with UPI, the startups can actually become the ambassadors for this when it comes to healthcare that becomes number one. Number two, I think e pharmacies and the e-commerce model when it comes to delivering medicines, which is something that face a large amount of regulatory scrutiny just before the pandemic has actually sort of been baptized by the entire government as of now and they become key enablers in ensuring that people don't have to step out to a physical pharmacy in order to get that medicine. I think that continuation that continuation will let's go long way and increasing the adoption of e pharmacies as a business model across various startups that becomes number two. And number three, the fact that the government is now concentrating on increasing physical infrastructure in a public private model model as well. And with the rise of a new healthcare regulator, which we hope you should be seeing happen during the course of this year, healthcare startups are actually poised to have the sort of same ed tech moment that they had previously. And this couple with manufacturing will actually go a long way in ensuring and make in India as well. It will go a long way in ensuring that your costly MRI machines, XA machines and everything can actually now start being indigenized in India itself and India startups can actually go a long way and actually selling those particular products to this new healthcare ecosystem that has just been seated as of now. So it's a it's a cocktail of factors that that that's actually going to boost the entire ecosystem. What we're waiting from the government now and especially from the government of health as well for the Ministry of Health. Are the finer points in the guidelines behind all this before startups can start working towards actualizing all this in the future as well. Sure. So I mean as an investor, you feel that this budget has not outlived your expectations on the capital gains. I think the fact that the budget didn't introduce any new taxes or think or think or anything in life of COVID-19 is a huge boost to confidence for all investors, not just for VC investors but in the investment stock market itself. You'll see the sensex writes about 1800 or 1500 points just after the budget actually got done because the entire expectation was that the government that she start taxing capital gains to a larger extent and also mobilizing resources. The fact that the government hasn't done that is a huge positive for the entire ecosystem. That being said as an investor into startups, the fact that they're super is surcharge has not been removed for investments to understand securities. The tax parity between listen and listen securities haven't been addressed is still an issue. But I think that entire issue is a battle that the entire industry will actually continue to fight as time goes by as well. We've also been joined by Rima Subramaniam from Uncle Capital and she's going to give us some great inputs in terms of how this, particularly from a social standpoint, how this budget would bring a great deal from a clean tech industry because of the Michael's frappage now being allowed. How do you think that is going to change Rima and also would love to know more about your stand on agriculture and government's new policies around agriculture that have been announced. Absolutely. For us, you know, health tech, tech, tech, tech are all very, very key infrastructures areas which has been impacted by the budget and said that has covered significantly on the tech and the, and the health tech so I'm not going to go into it I think it's it's great in those two spaces. The second thing is the 1500 crows for digitization of fintech, which is I think going to be a great level of because, you know, a significant part of the next billion actually need those kind of support. The second generation of fintech is 1500 crows is one great thing. The other is the Agri intra push. One of the biggest stumbling box blocks for our country has been the, the infrastructure in the Agri sector. So this whole push the says well, well is going to give a big, big boost. So today if you look at all our startups in the Agri space are all struggling one key thing is that lack of the infrastructure, and they can be putting up those infrastructure, all across the country. So when this is going to come up as a PPP model, I think this is going to be really great. So this is going to be give give a great push to the Agri startups, it's going to give a great push to fintech startups is those are two a great area the two areas that we see a big push coming in from. Sure. So that's what's your take on the fintech startups digital transactions are of course be named in the budget as one of the big priority areas so what do you think is likely to be seen changing in the fintech startups in the coming in 2021 further. So I think so in terms in terms of the fintech regulation, there were a number of us in the fintech that the fintech startups actually had. I think the biggest thing they've got so far as a thousand five and a group boost that's actually going to come up but the budgetary allocation of that how is going to be spent etc. Those details are weighted but fintech startups as a whole. I think the government also fully sees on the date for actually having fintech startups that and the fact that they actually want to designate gift IFC as a fintech hub for the entire nation will actually will be should actually see the same boost that happened to it and it as a services to the software technology parks of India have never done in about the early 2000s. Similarly, these are the structures once you actually come up in gift will actually go a long way in ensuring that Indian fintech is not just capitalized upon India but Indian fintech and actually has been exported to the rest of the world itself. A large amount of work has been done over the past three to four years for various countries in Latin America as well as Africa and Southeast Asia. We started adopting an adoptive light kind of framework itself and hopefully with the launch of the international fintech center in Gujarat under the auspices of gift that Indian startups will have a leg up when it comes to that and Indian startups can actually get a toe hold in these particular jurisdictions where a similar blueprint is actually being enacted as of now. How do you have like this fintech hub to be in Bangalore instead? I would have been delighted to actually have it in Bangalore even a Bombay for that regard. I think the moment this is everyone in the industry is eagerly awaiting for gift IFC to actually have an annex or either in Bombay or in Bangalore something because easier for us to actually travel over that and to actually transact all this itself but I think it's a work in progress. I think the government takes into consideration and it's something in the near future also. And the fact even if it's an Ahmedabad and it's itself is a big boost to all of us. Yeah, that's true. That starts takeoff here. Yeah. Ahmedabad is still just one flight away, much better than going to Mauritius or Singapore. Very true, very true. And you know, Reema what about your take on the clean tech side and particularly with the scrappage of vehicles now being opened up, what difference do you see it making to the country? Well, but you know the thing is that we, I have and this is my initial reaction need to get into the details, but I have mixed expectations from that, because as a country, we are a poor country, right. So a lot of what we scrap here goes into the hinterland. So I feel that the impact of it overall may not be that great. I mean I would still say is the fact a lot of it will get to start. This is my initial reaction. So need to understand a little bit more about that. Sure. So, you know, I would want to talk about another sector which I believe is going to greatly gain for the infrastructure push that has been given is the logistics sector. So getting some reactions, you know that the kind of money that has been planned for infrastructure. How do you think the logistics sector is going to benefit and especially the players, the startup players who are there. So, if you can, if you can let me know. Absolutely. I mean the way you touched on it. I do think yes, the logistics in India's first of all is a fact logistics is a very, very, you know I infrastructure so bad so there's so much of inefficiencies that are there so the moment this push goes into the infrastructure in terms of roads and terms of warehouses. I think we're going to see a big change in that coupled with the digitization that's happening up. This is the next big, big area that we are going to see in terms of startups coming in to the entire in e commerce, the digital commerce picking up is dependent on logistics it's all a logistics game at the end of it it's logistics and credit are the two key things in in the e commerce play. And with this infrastructure push, you're going to open up I mean today e commerce is just a very, very small percentage of our entire commerce commerce. And so, this is going to at least push this out in terms of opportunities for both startups, not just in logistics, but also for folks who are going to be in e commerce or anything which is about supply chest. Yeah, any digitization of any supply chains, all the supply chains will have a positive impact because of this. The logistics cost is actually 14% of India GDP hours now whereas the median for the rest of the world is up to about 6 or 7%. So there's a large amount of latitude that latitude of cost reduction that can actually happen in terms of logistics itself I think GST did a long way in actually easing the flow, easing the flow that's happened, that it dedicated freight corridors that the government is actually speaking about as of now will actually go a long way in reducing logistics costs as a whole because rail is actually one of the lowest cost means of inland logistics is transports around and the fact that the railways have actually placed a larger precedence or larger premium on the passengers as opposed to goods has actually adversely affected the revenues of the rail for a long period of time. The fact that the railways ever since the lockdown happened have started using excess carriage space to actually start transporting agricultural goods which is going to huge boost for the agricultural sector as well as they're going to start transferring other goods and everything throughout these dedicated freight corridors will go a long way in actually reducing the costs of logistics throughout. I think an important component in this is given the government's push in terms of not just the road but rail as well. It's a role that startups can actually play as part of this. We've already seen the rise of delivery and a number of them delivery rippler, let's transport and a number of them when it comes to road transportation itself. When it comes to rail transportation and rail logistics, startups have a very small role to play as of now. So how would the railways actually go about engaging with startups who are loving startups who are actually creating unique solutions in terms of digitization as Rima spoke about to actually have reduced the costs of logistics itself. I think that's a huge green field that will hopefully start emerging in some span of time and all this is contingent on how well the railways actually want to play with this. Because POS Coal is a railway minister, I believe has actually done a long, has actually been a long-standing support of startups in India as a whole. So all the entire startup ecosystem is excited to see which new avenues that the railways actually open up for them as well. So obviously I believe till now, you know, there are a certain number of players who hog the entire systems of railways in terms of how they, you know, transport goods. And the other part is that we've also, there was this long, you know, pending, because we have not been able to complete the two dedicated freight corridors which have already missed their deadline because of COVID obviously and now we have more, which have been announced. So this entire network, if you see it connects the entire country and as you said that 14% as a cost of logistics is too high compared with any other country. So, you know, you do you think that there will be trickle down effects on any other any other sectors that we that we that are there. And if there are which was which one be the most and then I would also want to know from both of you that, you know, we have let go of the physical physical deficit targets. So I'm going to build them through borrowing. So do you think that that in a way is a is a double edged sword for the country or was it the need of the. So I can actually take that I think number one with regard to trickle down effects for logistics. I think what we're going to start seeing is that the cost of goods that all of us actually purchase will actually go down to a large extent because the logistics costs are actually baked into the MRP that all of us actually end up paying so that translation of course once logistics actually comes on will actually be hugely beneficial for all for all the customers and for all consumers itself. And this in turn once the logistics costs actually go down the ability and quality actually improves of course the ability for India to start actually exporting some of these goods itself especially the perishable goods will actually increase to a large extent a large amount of agriculture happens happens in states of UP which are actually extremely far from the course as well. And all the transport usually happens to rail itself which actually takes a prolonged period of time having those particular dedicated fake corridors can actually help can actually help take those raw materials all the way to the port so they can suddenly exported throughout the world itself so that trickle down effect I'm going to start seeing not just terms of logistics costs going down but in terms of FMCG in terms of agri-products in terms of raw materials and inputs from manufacturing all these costs will actually start going down to a large extent itself and that's going to be hugely beneficial in terms of boosting trade. With regard to the FRBM and the fiscal and the fiscal policy. I think one of the most important things is to sort of is to understand that because of COVID almost every single government across the entire world has unanimously started borrowing to a much larger extent and some of them in the US especially have actually started printing money as well. Jeremy Powell has actually been extremely vocal about the fact that the government needs to actually spend as much in order to get out of this particular deficit. And we've also seen the finance minister acknowledge that India didn't go in for a big bank package. They actually had a series of surgical strike packages that they littered throughout the course of last year in order for specific industries as a whole. So I think it's a combination of these two, these two things have to be taken into light. The FRBM was conceived in a point in time where no one anticipated COVID actually happening. That's why they actually have situations and they have clauses with that which allow them to deviate from that. And if you look at India's fiscal deficit as a whole, India's fiscal deficit is close to 9% and it's debt as a percentage of the GDP is actually far lower compared to the debt of literally any other country across. For Japan it's about 250% China's debt is also above its GDP and similar with the US itself where the total national debt is actually I think about 100% or 120% of the entire GDP as a whole. India's actually far lower and that's actually good for the country. I think what the government should start doing and this is something that they spoke about in the previous budget is the fact that overseas borrowing of the government can actually start increasing. Because of the actions of the Federal Reserve in the US and the fact that in this today it's across the entire world that actually at an all time low, the ability for the government who's crediting is actually improved to actually start borrowing from foreign sources should actually increase. This will reduce the domestic pressure. This will reduce the effect of the government that has in terms of sucking up all the capital from the domestic markets and this will actually start enabling firms and everyone to start borrowing within India at much lower cost of capital. I've often spoken about the fact that India's cost of capital especially working capital is inordinately high and one of the reasons for that is that the government actually does a large amount of borrowings from the domestic market itself. So when that sovereign rating the government starts utilizing the provisions given in the last in the budget 2020 and actually start borrowing from abroad I think they'll actually go long way in cooling off the interstates in the country and with the transmission loss of interstates hopefully being rectified by the RBI and the recent monetary policy committee has already spoken about that we should hopefully see the cost of capital with the country that used to a large extent. And globally it's now actually if you see is the fact that's negative into nobody has they don't have avenues to invest. So you can't have you are at a good time where the government can actually raise money outside India. So sovereign debt can easily go up and you know today if you look at it the net borrowings is from four lakh rows it's expected to go to nine lakhs. And if there's going to be increase in growth, and then if you can also get debt from outside India, it's still manageable. So we cited you know US and other advanced economies but with their currencies being more stable compared with India's. Do you think that that's that that's what my question is that you know, is that is that an area which is of concern for us, going forward maybe not this year because we all expect the physical deficit to be let go of and we were expecting it it was expected. Go ahead. No, so as I was saying, a large amount of currency depreciation that we've actually seen happen that India's actually suffered has actually been more or less stable I think the current rate that all global markets expect is about a 4% currency depreciation on a on a on a yearly basis. So this is all even factored in that a factor the large amount of this ends up actually being hedged as it ends up being hedged effectively will actually goes to ensure that they're protected against the fall in the currency in the country that usually happens that becomes number one. Number two I think it's also important to acknowledge the fact that because of the federal reserves actions. There's a block of US dollars across the entire world market as of now, given that you know sudden increase in the in the availability of us versus versus INR INR itself there's some amount of stability will actually come in as part of that that becomes number one. Number two, number three the exports that India is actually going to see as of now because the government has been speaking about exports and they've been a large number of export incentives that have already been created. And this this in combination with the PLI with the PLI scheme that the government has spoken about, and the need need to actually decentralize your supply chains away from China and the last month that's moving to India will actually start seeing the foreign reserves in the country at the increase to a large extent. India has close to $555 billion of foreign reserves with the RBI currently on the last proportion of those foreign reserves you've actually look at the balance sheet of the RBI that's actually pegged at the conversion rate of $1 you can do I think about 50 rupees if memory serves. That actually goes to show that India has a large amount of latitude when it actually comes to that when it comes to that and the Indian currency depreciation is something that's already been factor this is not something that's entirely new and the change in the budget and change in the physical deficit is not in any meaning is not going to dramatically alter that particular currency rate itself because it's not an isolated incident it's a trend that's happening across the entire world. So that entire that falling tide that that changing tide is going to affect all the countries unanimously in India because being more physically conservative actually has a lower deficit and actually has a lower lower net borrowing compared to some of the other peers not just across the world but even in Southeast Asia itself. So this actually seen that's how India has emerged as one of the net net net positive in terms of FDR compared to almost any of the any of its pure countries in Asia during during the course of COVID-19 itself. Sure so we've also been joined by Anirudh Damani welcome Anirudh as we sort of to decipher how the budget 2021 has paved out. So first of all you know I've been asking everybody how are you going to rate the budget this year on a score of 20 how do you see it sort of being there and what what is it particularly that you liked about the budget some particular policies that you think are going to sort of go a long way for the economy but others which would not one thing of course let me point out here is that there is a big on the social media it's being seen that since they have been no income tax policies been announced nothing in reduction of income tax policy which was expected because of increasing the consumer consumption in the country or increasing just buying capacity for the people at large is something that people are extremely dissatisfied with. So maybe there's something also you might want to comment on. So according to me and before I give the rating I think that in this budget the silence was the silence was the answer right there was silent on multiple different issues there was expectation on the crypto ban to be announced over here that had did not happen. I think the government had a very very difficult path to follow and trying to keep everybody happy was definitely not that something they could have done right I mean but what I really like about the budget was that the government that you know what we're going to have a 9.5% physical deficit and guess what we're not going to try to fix this for the next five years. So don't expect anything big over the next few years which is going to increase the tax burden on the on the on the honest taxpayers and I think that's a big big big decision. I think if the expectation was that India is going to bring an era of like low taxation for individual taxpayers right away. I think it's it's far fetched because we've had a very tough year right this has been a as a government this has been a year where they've had to like literally throw the budget and everything in the dustbin and and go out there and spend and which they have right and I think you're seeing the GST corrections 1.21 lakhs. I think the expectation this year is that the economy should grow 15%. So if you just extrapolate that into what GST revenues should be for that I mean this is going to be some really serious amount of dough in the hands of the states and I think a lot of this. The government can do a lot on its own path and they and I think they're spending money on health care the health care spending is 137% higher which is you know at an all time high they're spending money on on infrastructure I mean this government has literally gone digital. They're saying even even your tax assessments are now going to be done. I mean your when you go to the tribunal is going to be done faceless. So as a startup if you look at if you consider the government to be a startup and they're doing everything possible to go digital so they put a very big message out there that digital is the future they they in fact even review audit for companies that do a 10 hour in turnover and have at least 95% of your money should be digital. I don't know where should I force the government right now. Right. Yes I'm not 100% happy would I would I love to have a have them put another 20,000 fund of funds and then say you know what we're going to start funding DC funds all the way for 70% trust me I would be dancing over here and we you know and we would really be having a good time but they didn't have the capital. But what is what is going to be the biggest positive that I that I deciphered here was that look at the number of taxpayers you literally as to saying that that India added one lakh taxpayer per day over the last 20 over the last 12 months right so the taxpayers in the country, you know, to double. I mean this has never happened, ever, right that way, where this kind of tax compliance is going on and I believe if we can continue this base, you can expect an era of lower taxation over the next three to four months right. But the government needs revenues they they're building this 90,000 crore, you know, Delhi Mumbai expressway that will reduce the time traveled to 12 hours, which is a big intro project and they have to spend money on on so many different things. And if our expectation is that the taxes are going to go down. What could they've done okay maybe maybe standard direct me the lower the lower start up would have been a three lakhs instead of two and a half I believe. I do understand that the government needs revenues but at the same time business needs revenues to do some investments to do some digital transformation of their own. You know, has the government taken that into account. Very quickly said heart and it was a few to come and dream up please as well. So that's going to go first. Yeah, I think I think you can you can. I think the government. So the government on its part is obviously going out there and spending money eventually that money is going to trickle down to people like you and me and and then obviously the people that work with us and and and so on and so forth. So I don't think the government has come short on that they made it very clear they're going to spend a lot of money this year and they're going to start building infrastructure infrastructure capital obviously is going to put thousands of people and millions of people to work. So according to me. Yes, now how could they put money back into back into the hands of the, you know, for that I think they just redefining how you would define a business like the limit going from 50 lakhs to those kinds of small small efforts are happening. I did not really expect a very big bang budget because honestly we've had six budgets in the last 12 months. If you look at it at every admin aspect thing was a budget. And then if you're expecting another big bang at the end of all of it. You know that that's really expecting a lot that being said I do. Here's what I believe if there's going to be a 15% GDP growth this year that is going to translate into business. I don't think so I think it's going to be a lot of, you know, we're already seeing the kind of massive supply builder that's happening even today. Right. And, and there is an expectation of a lot more FDI coming into the country. In this year I would I would even say the VC ecosystem to probably see its best year ever. Right. And you're going to see that because this is the first time in history of India that the number of rural internet subscribers is higher than the number of urban internet subscribers. So you're going to actually see the consumption patterns of of a large section of India that has never really been figured out on a digital level right 240 million I think some digital subscribers and I was I was doing a presentation last week for this family office conference. And at the end at the start of 2009, the 2020 right India was at a 41% penetration of internet subscribers compared to China 57% China was at 41% about eight years ago. As of, I think September 2020 India that 57% internet internet penetration so literally we took an eight year gap and made it nine months. The impact of that is going to be seen. And I think, you know, people like Siddharth and I are smiling because I have a purple he's got lishes, right and that and we're seeing the kind of trends coming out of this market this is a lot of Latin demand that was not available. It was available to the guys at a traditional distribution systems. Now it's available online 99% of India's pin codes had one delivery in the last 12 months. These are amazing, crazy amazing numbers. This is exactly what Siddharth and I got into this business for right that we saw this happen one day and and I therefore I think I think we're really underestimating the power of what that rural consumer is going to do to India and plus the fact that in Modi has spent an inordinate amount of money in the last four budgets on the rural population. So according to me 15% not far fast is definitely, you know, you may be at 13 or 17 but it's not going to be, it is going to be double digital. I think I think one of the important parts to also keep in mind in this is to actually consider the lower base effect in when they ask me to look at the GDP growth numbers as well as itself. 2020 GDP of not just India but basically every nation across the world, except China actually reduce. So the moment we actually have any increase on a reduced base itself that the relative proportion of that is automatically going to increase. It's actually basic math. So that's going into it. So estimating a 15% 50% growth or something in terms in terms of GDP for India has not actually been far fast. You've seen the highest amount of tax collections in terms of GST have been 1.1.12 lakh crores actually happened in January itself. And this is exactly just prior to the budget actually coming on board. And the fact that the government is actually now looking to actually increase capital expenditure itself and actually help reduce the cost of logistics help increase the penetration of urban housing when it actually comes when it comes to this. Create a social security net for Indian gig workers. I mean, everyone needs to emphasize that the fact what a monumental thing that actually is this is similar to the fight that they're actually having in the UK, having California having the US all over the place as to what social security net can be actually create for gig workers India has actually gone a step abroad, and they just put that as one line item in the entire budget itself the social the wages code the social security code, all this is going to start coming and if you look at the look at the government budget look at the speeds itself. The fact that the private sector can stop playing when it comes to when it comes to railways, the fact that HRMS systems at times if a blue collar workers in terms of it does a compliance check as well as a red tech will actually help will actually become the mainstay for all businesses throughout in order for them to manage their labor with their labor compliance is those these are new greenfield greenfield avenues actually going to start increasing the fact that your ita is actually going to start happening online they're going to start having e quotes actually coming in itself, all these are new areas that the government is actually seeding, but entrepreneurs once they can raise capital and access are building viable business models upon all these particular area so the government has actually seeded a large amount of work when it comes to this within the fiscal constraints that they already they're already suffering as of now, if you look at the you every single government across the world is actually spoken about increasing the tax rates for certain individuals, the Indian government has been has been extremely charitable in the fact that they haven't actually gone and increased increased the particular tax rates as of now I think that's actually the greatest sigh of relief across everyone because some of the rumors coming out just prior to the budget I'm sure you've seen it, I know it's seen it, everyone has seen it, everyone has seen it, those are extremely alarming if any of those actually came in at this point in time you're actually seen investor confidence actually shattered and the moment investor confidence gets shattered the ability for you to increase capital ability for you to actually invest in the businesses and see this entire model play out that particular tickled on model play out actually goes away for the government I think the government has to be commendable commented on that the 15% rate is something that will actually happen because what most people actually failing to acknowledge that we are the cost for a number of the businesses that actually coming down significantly because I love to actually work from home and the digitization wave that's actually occurring we looked at any of the bank provisions look at any of the bank you look at the December quarter results that come out in the listed markets itself all of them are managed to beat the speed expectations because the normal cost centers they would normally incur have actually gone away a large amount of that has now been diversified to all of us sitting at home as of now so the moment those cost savings eventually go to the bottom line and that actually gives them a large amount of money to invest in when it comes to that itself so we have seen all this actually come into the trade and India's strength has always been the digital economy China China's primary step with terms of manufacturing now that's actually changing as of now the government's putting a lot more into PLI as well as incentivizing manufacturing as a whole but India's digital strength innovation and its assets can actually be can actually be taken toward the entire world and this is something this is why Geo's managed to actually raise that absurd amount of money we've seen the birth of about 67 the entire world is actually recognizing this entire portion I'll be startups and ambassadors what you're going to what you're going to write this entire way through and that's that's something that I'm personally excited for and that's something I'm sure I'm excited for Rima who I think is also on this call also excited for itself so all of us are now really the collective side of relief that we no longer have to go back and tinker speak to our tax consultants and everyone to figure out what needs to be done as of now we can actually concentrate on business, concentrate on investments and actually start translating all this and actualizing the plans and the and the vision that the Prime Minister's articulated for all of us. Sure, I mean, you know, there was supposed to be and while of course to some extent the MSC MSMEs have been included in the budget, but did you, did you feel that particularly for family businesses and, you know, businesses which are into manufacturing in, you know, in a large format would it the budget's going to make a big difference to them. I think for manufacturing business, I think the the 12 finance minister did bring it up that we currently already enjoy as a manufacturing business one of some of the lowest taxes in the world. Right and I think with GST and and the things they're building towards infra. I did not see that this was this was probably not not in it was probably neutral for them but there's already already enough enough positivity priced in for them in the past few years budget. So what what I would have loved to see and I think, you know, Siddharth was talking about a little bit was if there was a way to reduce the cost of borrowing for businesses right especially even startups I mean I'm a bit. At the other day one of our startups is just going for a working capital loan and the net interest rate would have been working out to 21 22%. And that is just an, you know, then why not just raise equity and when and that's concerning when when raising debt is almost equal to the price of raising a private equity round. Right, it is a bit bit alarming. So, to me, I would love to see the government come up with some sort of a plan. I think they're either interest rate subvention or some sort of a, you know, wave at the where the interest borrowing for at least a startup could be somewhere in at least the low, low 10 or the low double digital 10 11 12% and and then that would really get things going. What I and to just add one thing that I really think we missed and missed multiple budgets, you know, is the way the government grew the, the solar industry, right the initial solar developers they got tax benefits for investing into solar. And if you look at, you know, where wind and solar got in a very short period of time there was literally fueled by these tax tax incentives in UK has a pretty large tax incentive for corporates to invest into startups. So I continue to believe that the government needs to have some sort of an allocation or allow H&I and family offices and to invest into other businesses and allow that to be a tax reduction. Right, and it could be in that could even even even help them invest into downstream businesses. Right, that could help them with that with the original original business plan. I mean it could help each and I participate into more each and more family offices participate into the space. There could be a cap it could be like a corolla year it could be 10 corolla that's not that's not really the thing but I think that our ecosystem needs more liquidity. Right, a lot of the capital that that fund managers like myself, you know, have had to raise has been from abroad and not from India and then that means that all the startup wealth we create eventually then goes out. You know to investors not living here right so how can we change that we need to we need to encourage and provide more incentives for that kind of investment to happen at the lower end and not not to keep passing the money into mutual into liquid equity mutual fund. I think that that is something the government has been missing for the past few years I don't know why they keep extending startup tax benefits I don't yet to know what startup is actually availing of those benefits. I mean because you know, most of the time you're building in that phase right so so to me I think that's a trick we keep missing. There was a way for even CSR fund something something where that money could get put into startups either through VC fund or directly into the IPP approved startup that could be a real, you know, it could really create a massive amount of pool of money for startups to go out and raise from right and then we'd also encourage more super angels to become fund managers. I think that's a that's a trick we've missed missed for two, three years now. Sure. Rima, do you have any thoughts on the same on on how small businesses MSMEs are likely to get some mileage out of this budget. I do think that it this would, because one is the fact that they've increased the size of the MSME this itself it's now up to two crores and 20 crores investment. So that itself will extend this to to benefit to a lot more of the SME space and startup spaces as well right. The lot of companies do raise less than 20 crores money so this would benefit them as one thing. And the moment you have more privatization happening in the banking sector. I think this itself would be of a great benefit as one thing. While, you know, technically the nationalized banks were supposed to lend to especially in the aggregate sector and all they were supposed to lend we actually found very little money trickled through. But with the nationalization I was just talking to one private sector bank this is a fact they do find that if the the governance is getting improved. And if you're going to have a lot more compliance is being there there's no reason why they will not lend to the sector. So they I do think that this would open up for the MSME sector is one thing. And with the gift and all coming through I think that we're going to see yes but I agree with Anirudh I got dropped off because of bad connectivity, but I do think that we would still continue to see a lot more of foreign capital. Coming into the country than than domestic capital. I heard part of what Anirudh said but I do think that this would continue to happen. And I think it's a good thing, especially if you see the insurance sector that's opening up to 74% capital coming in. Yeah. Sure. Puneeta. Surima this the government when it announced about the OPC when Indian citizens who are living abroad non-resistive Indians. They can also set up a new incorporation do you think that's a big move and we're going to see more and our eyes looking forward to it and then setting up companies this way. You're asking this to anyone. Yeah, I think it has got dropped off too. Oh, okay. Siddharth Anirudh would you like to. Yeah, sure. I think so Puneeta see the OPC the one person company structure is not it's not actually a structure that's conducive for Indian entrepreneurs for Indian entrepreneurs who are actually looking to raise capital because the purpose of a one person companies is only one shareholder. Right. So the moment you actually have to go raise raise money from an angel investor or a VC or any other kind of investor. You automatically have to translate translate your corporate structure from an OPC to a private investment company, which is usually invoke itself. So I think the OPC the OPC part is not OPC part is not as much for fund startups. I think the OPC will actually go a long way and helping and helping corporatize so proprietorship will actually be the primary beneficiary of this. So person training, a small trading concern, a small trading trading store or the department store or something can actually offer the OPC structure and because of the personalization in terms of in terms of minimum shareholder except now minimum shareholding. Max amount of capital you can actually raise what sort of revenue etc all that going away the ability for them to actually create a corporate rapper to ring fence liability and to actually get get access to to working capital as well as as well as enter to the formal sector will actually help bolster the MSME sector to a very large extent but for BC funded startups, the OPC change will actually have a very negligible effect as a whole. Okay, and the way it mentions that okay when OPC can easily go on go on please. I was just going to add to what actually I was going to talk about OPC when my line got disconnected. The other area where the OPC would help is basically with innovation. So there are a lot of innovators types who have currently who have innovation, but who are not in the corporate structure. And for them to get whether it's grants or whether it's for them to get some kind of debt is becomes an becomes very difficult. So the OPC structure is expected to help with with a lot more from capital coming in from institutions like by rack and all that. So by rack has just in fact was on the call and one of the earlier calls where they expect that the OPC is going to benefit a lot of scientists who are, you know, looking to corporatize their innovation. It could also lead to a segregation between personal and corporate liability, which is becomes a big problem. That's what I touched upon. Sure, sorry. Yeah, so, you know, I'm, it's very, I'm using to see that after a budget, no one has complaints about the budget and you're saying that, you know, we don't have to actually say what the government could have done. But still, you know, on some points that have been silenced as was mentioned by said that then I need to be touched upon the cryptocurrency by an off late we saw a lot of investment going into, you know, crypto crypto based startups. So I have not gone through the entire financial budget, but I'm assuming that it's not there. So is the silence good or bad for these. Because I was getting, you know, you know, reactions from a lot of people that they would want to be stakeholders in the discussion if something called a private crypto is done by by the country. So what do you what do you read of that. I mean, like I said, I think the silence on that again, the entire budget parliament session is also not over so they could always introduce a bill to ban it and there was some talk about that as well. But I'm, again, I'm hoping that that does not happen. However, we need to know the problem with crypto is that in a country like India where we have too many enemies internal and external right especially on the terrorism front is that the anonymity of the transaction, you know, is what the problem has really been. How do you track there's terror funds being, you know, and they've been I mean, not to say that this network has not been utilized in the past for terror. So, in that sense, I think an RBI issue digital coins would make sense. In fact, one of the, I think one of the most popular coins today is the US DT right which is basically a cryptocurrency where whatever amount of the value of the currency is it say that about a dollar to to to every to every every coin, but they have exact amount of the volume that they have the exact amount of that is available in a bank account. Now, whether someone's auditing that or not I'm not getting into that, but it is supposed to be equal to the amount of dollars in their bank account. So, could India have a rupee coin that does the exact same thing why not it would it would it would definitely help with convertibility between between coins. So that that could be an RBI issued coin that could be pretty interesting. However, I think India continues to, you know, blanket reject if a blanket rejects the entire crypto space. I think that could be very negative, very negative for starters many of them have gotten funded recently, and they've raised lots and lots of capital with the intention that we're not going to have to see this policy overhang on it. I would hope that the government comes up with some sort of a solution, right, because honestly I've been negative on the India crypto space I made some investments outside India but in India not only made any crypto investments because of this, you know, because there's no clarity and this is and this is not a space where I can take, you know, an RBI related this is going to be a family related risk and I don't want to get on get on to that bandwagon at this stage of my career. Okay, I think you want to leave so you know before you go. Was this really a never before like budget for you. Do you think so. Consider the reaction never before. We're all confused. But I mean, I think to ask the question earlier on ranking it I would I would probably rank it considering all the, all the factors about a 16 or 20. It's definitely not a home run. But I think considering everything they did they had the fact that they did not think of any of the taxes, I think that that that itself will be 10 points right there. Right and they could have I mean they could have tax for it even more and driven them out of the country possible but they did not right and they've taken they've taken they've taken a path and listen this is going to take some time and we'll recover and we'll spend money together. Happy about that. Thanks Andrew. Thanks for joining us. So that, you know, in terms of what sort of was asking in terms of what is not there in the budget so would you like to sort of comment on that what oh yeah I think. All the all the ass of the entire startup industry, not a single one in the budget. I think the whole athlete can say that the fact that he stopped taxation what about thinking that they did to section 156 last year. There's been numerous representations. I think the Pew School also went on the record to say that in case anyone has any session to make on that please write to us. I think people have written. I perceive purpose is to put five papers on that. Exactly. And there's been there's been almost no change when it comes to that particular portion whatsoever. The tax rate rationalization between listening analysis securities that that hasn't actually been addressed to a large extent the large amount of compliance cholesterol that all startups actually have to do start up to actually look at it have to do close to 200 separate pieces of compliance in the ordinary course of business. This in terms of labor in terms of labor management ESI PF, taxes GST indirect MCA everything else and this excludes one off events like raising capital issuing these thoughts and all those other part none of that's actually been addressed by the government so the fact that there's losses in the tax structure in the corporate structure between various within LLP and a company also that hasn't been rationalized by them as well. So numerous hours numerous and this is excluding the investor portion investors have an entire laundry list of stuff that they also need to get through but I'll keep it is keep the startup issues itself. So a lot of none of that's actually been addressed by them we've seen two things happen to startups increase in the the tax, the tax, the tax window that's supposed to come through as we number one as well as for investments in the startups certain kind of startups. These two, there are only 400 companies in the entire country you can actually avail of these particular two transactions that's a very small number compared to 50,000. There isn't that much for startups as a whole so I think it's a startups I think the lesson the startups I got from this is they need to become at Manirba themselves not relying on the government to actually give them any soft so any changes anything like that, but to sort of capitalize upon the avenues of the government is opening up to them as of now and that's just that building up their businesses in a more in a more organic fashion. I mean I think that's what it is finally it would need to be is the fact that you're creating a more enabling environment where there is, you know where there is demand between created where there is overall growth. See when there is an economy is growing, then you have opportunities for everyone. Right and so the tax you don't need to increase the percentage of tax your revenues will swell on its own. So I think as long as the economy is growing. At 15%, I think there's nothing more that the startups would need to ask for. Yeah, but that doesn't mean of course like all the things that are there as the startups, especially at, you know around the eSops and then a lot around the investors that that we have been petitioning the government for would all be required. But I think those are smaller things in the overall scheme of things. If the growth is there. I think two things that have been stood out one is the fact that the fact that the tax rates didn't go up. It kind of gave given immediate euphoria to almost everyone because everyone was expecting it. So it was almost like, you know, you were expecting the bus to come and hit you and the bus top 10, 10 meters away is like how everybody has been. Essentially, I think that's, that's the euphoria that is there. But on the other hand, the growth if it can get because infrastructure can create a lot of growth. And this push the digitization and infrastructure push itself could create a growing economy and that would possibly help everyone. So what is your take on what kind of employment generation should come out of this infrastructure outlay that has been created. So one is direct infrastructures in terms of the environment that it gets created, but then the trickle down perfect on whether it is all capital goods creation will all go up right I mean so whether it is in terms of steel whether it is in terms of the machinery manufacturers, all of them are going to have a direct impact. And then all the soft swing and done for the agri infrastructure for example would mean money going into the rural economy. So which in turn would mean demand for FMCG goods like capital goods. So it's essentially it's, you could, then you would have a trickle down employment effect that gets created. So I tell any at any point of time infrastructure and CAPEX can create a huge impact in terms of of employment generation over a period direct and indirect together. Sure. Any thoughts on what the insurance sector the changes that you also look to see in the insurance sector particularly in the insured tech side, given the fact that there has been a push to the insurance sector in the budget. And also in the face of it, while it says is a 74% and most of the, the initial reaction that I've heard from the intro from the insurance sectors that they're unlikely to go up beyond 51 52% they're not people sitting in the except for insurance companies from Japan is what who have reacted positively saying that they would like to take it up but otherwise, most of them are only looking for the fact would they get to 51 52% at least because they would need to have management control. So from that perspective, there's unlikely to be huge money's coming in from the interest from the insurance sector. It just creates a more positive environment for the sector itself, and that, you know, it could open up in future but may not have an immediate impact is what I heard some comments coming in as the thing came up. But what it does is the fact that, see, we are so under ensured. I mean, in terms of days that if he if he could, the more the insurance sector scales up. It's the opportunity is huge. I mean, I don't have this, the, the, the percentages, right, unlike Sidharth I can't, I, I'm not able to rattle off the percentages, but factors that the insurance sector is, is, is huge right and so I think that is going to be a big opportunity. And then I see itself is going public this year so. Absolutely. But that being the fact that you know you could, you know, the fact that the insurance, the insurance startups is, is just picking up your belly scratch the surface, and none of them have gone beyond the already insured population, and they haven't gone beyond that and they've just about started stretching to the, to the next billion users in the country. And once you start reaching out to all of them health care has obviously had a huge push and health tech insurance in this during the COVID period. And it's obviously going to go up right and so a large part of the, of the, the, the health care insurance or the government health care insurance. So around 13,000 crores is likely to go into that. So all those will give those push to that insurance industry. And obviously, hopefully in the long run, you'll also see FDI coming to more FDI coming into that sector. The insurance, the, the barriers being there like when initially 74% I mean the fact that was 49% was apparently a psychological barrier for many companies, because then it felt you could go up to 49% but still not have control. And so the fact that you could cross that itself and get to 5051% is a big, is a big thing. And that's likely to create the changes what it is. And even if it's not an immediate one. So are there any numbers you want to share on the insurance? No, I think the insurance penetration. So LIC, LIC alone actually sees about 5 lakh crores of premium as you flow through it, which actually come out close to about 65% of the entire insurance insurance sector of the country as of now. I think that's actually one of the biggest, that just shows how ripe for disruption the entire insurance sector actually is. We've actually seen a number of rounds in the insurance tech space also open up. And this happened not just from early sales companies, but all the way to much, much larger companies as well. So insurance as a whole, I think what COVID has done as a behavioral aspect is to sort of educate people about the need for insurance. Because no one knows when these sort of post-major events can actually happen. And the fact that everyone actually overestimates this sort of financial question they can actually have to actually weather through this particular storm. So I think insurance is something that's now been ingrained into everyone's into the psyche across all people and the space is actually ripe for disruption itself. And we've seen, if you actually notice the number of insurance companies in the country, you can actually count them on your hand itself. That's how few that entire space is. And for the country of 1.3 billion people to only be served by such a small number of insurance companies actually goes to show how the amount of latitude that actually exists within this entire space as a whole. So while the insurance FDI going up is actually a very positive move, the insurance act of 1936 or 1938 that the countries that currently work in the country as of now actually needs large scale reforms to come through. Because we actually look at it the sort of investment patterns they can possibly pursue with severely impaired and impeded compared to what the global peers already have. And even though the government, the finance minister hasn't spoken about this, the head of IRDA as well as even the pension funds and everyone have actually spoken about the need to actually start rationalizing this to a large extent and enabling them to actually start investing in a manner that can help increase and enhance the returns for the premium holders as well as a contributor. Because see the error of high growth across the entire world is actually gone. Growth rates across the entire world are actually plummeted. So the ability for this insurance companies to actually start making positive returns in a low growth environment is extremely impeded. So actually then it behooves them on the regulators to start increasing the number of avenues they can to actually invest to ensure they can actually make good on those particular claims as of when they come out and come around. So that's something that investors have been speaking about. Insurance regulators have been speaking about with the finance minister has been unfortunately about that as of now. They want to increase the FDI rate. But hopefully with this FDI rate we should see some more rationalization coming through IRDAI and hopefully all these regulations also change during the course of this year itself. That I don't expect to change with us from the last IRHs. That is expecting too much a thing. It's unlikely to go. But the other thing is that the consumer behavior changes what is the more hopefully that will open up far more opportunities because the fact that like what Siddharth said consumer at least now appreciates the need for insurance. And so that behavior change is what will open up the sector a lot more. Well with this I'm going to thank Siddharth and Rima for joining us. Thank you so much for your wonderful inputs and I think that was a great description of the industry and the opportunities that you've panned out. And hopefully we're looking for this 2021 to be much better bigger and particularly for these days to be doing a lot more and making the economy go all bang on. Thank you again for joining us.