Budgeting for growth: Sectors in Karnataka look for leg-up

Entering the third year of the pandemic, all eyes are now on the Central Budget, which will be presented on February 1, and the State Budget in March first week.
Budgeting for growth: Sectors in Karnataka look for leg-up

Entering the third year of the pandemic, all eyes are now on the Central Budget, which will be presented on February 1, and the State Budget in March first week. Various sectors are pinning their hopes on the budgets announcing sops to help them recover from the impact of the pandemic.

While marginal recoveries were made by different sectors in the last few months, they are now hoping to benefit from conducive Central and State Budgets to help them return to robust profit-making ways that will also raise employment rates across sectors, and primarily benefit the general public. The New Sunday Express interacted with stakeholders from various sectors to identify what they are looking for

Providing statutory guarantee for the Minimum Support Price (MSP) for agricultural produce, bringing all crops under the crop insurance scheme, better procurement and distribution systems and providing loans to farmers are among the farming community’s expectations and suggestions for the Central and State Governments.

State Sugarcane Growers’ Association president Kuruburu Shantakumar says statutory guarantee for MSP will solve the problems faced by farmers as they faced a lot of difficulties due to the pandemic. The government must ensure they get up to Rs 5 lakh loans at zero per cent interest rate, and all farmers must be provided loans, he feels.

Agri expert and former chairman of the Karnataka Agriculture Price Commission, Dr T N Prakash Kammaradi, says the state government should lay more emphasis on procurement and distribution of food grains, fruits and vegetables as it will help farmers and address a major concern of malnutrition among children and women. “We can distribute millets, pulses and other produce through the Public Distribution System (PDS). Karnataka is a horticulture state and our per capita availability of horticulture products, fruits and vegetables is 570 grams. We should procure and distribute horticulture products and also give them as part of the mid-day meal,” he says, adding that Karnataka should procure more from farmers.

The industrial sector in Karnataka has appealed to the government to support Micro, Small & Medium Enterprises (MSMEs) by way of grant-in aid, interest schemes or interest-free loans.

The Karnataka Small Scale Industries Association (KASSIA) is appealing to the Union Government to provide interest subvention (relief on interest charged on loans) in the case of micro and small industries so they can avail credit at competitive rates. They have appealed for specialised banks to be created on the lines of micro finance institutions to cater to the sector.

According to KASSIA administrator P Shashidhar, at present, it is difficult because of complex collateral requirements which need to be made simple and reduce transaction costs. The process of annual renewals should be abolished for SMEs and it should be made once in three years.

They are also demanding establishment of a skill upgradation centre in each district. Apart from this, they are also appealing to the Centre to extend Credit Guarantee Fund Trust (CGFT) for micro and small enterprises up to Rs 10 crore to encourage first-generation entrepreneurs.

Doctors and health sector stakeholders have demanded increasing budget allocation for health in 2022 as well as strengthening primary health care. “The government must spend on strengthening the primary health care system, the backbone of health care — public and preventive health care — nutrition in children and aggressive vaccination campaigns to include Covid-19 vaccination for all,” says Dr H Sudarshan Ballal, Chairman, Manipal Hospitals.

He emphasises on upgrading infrastructure and personnel at government hospitals, strengthening paediatric care and setting up training programmes and teams of intensive care doctors in government hospitals.

Dr Ballal says investments are needed to set up more diagnostic labs, the importance of which became evident during the pandemic, besides allocations for more medical colleges in under-served areas, upgrading district hospitals to teaching hospitals and encouraging investments in technology to bridge the rural-urban health divide.

Vishal Bali, Executive Chairman of Bengaluru-based Asia Healthcare Holdings, has sought an allocation of 2.5 per cent of the GDP in real terms, and not under a consolidation of allocations, to various schemes and departments related to health. “The government’s push for financing healthcare infrastructure can be aided through issuance of Government of India-backed healthcare bonds. Indigenisation of medical technology needs more steps under the Make In India programme, both for local and international players to make India a manufacturing hub for medical technologies,” he says.

Neerja Birla, founder and chairperson, Aditya Birla Education Trust, has pushed for a substantial budgetary allocation to mental health, to make mental healthcare easily accessible in a timely manner to the needy, even in rural areas.

She says although the previous Central budget allocated over Rs 71,000 crore to the Ministry of Health, mental health care received just Rs 597 crore. “Of this, Rs 500 crore was set aside for National Institute of Mental Health and Sciences in Bengaluru and Rs 57 crore for the mental health institute in Tezpur, leaving a mere Rs 40 crore for the National Mental Health Programme,” Neerja Birla says, reminding that 14 per cent of India’s population suffer from mental health issues.

Satish Gidugu, CEO & Director, Medi Assist Healthcare Services, a third-party administrator, has appealed for the Budget to incentivise tax-paying citizens to opt for higher health insurance covers and facilitate the government to focus on the bottom 50 per cent of the population to make it easier to expend on health facilities and services in times of pandemics.

“In the backdrop of falling incomes because of medical exigencies or job losses, many are scaling down coverage of health insurance policies to save on premium amounts. Adding to this alarming trend is that nearly 30% of the population remain uninsured and you have a dangerous situation that is detrimental to our country’s goal of achieving Universal Health Coverage (UHC) by 2030,” he says.

The Union Budget for 2022 will be critical for start-ups as they expect the government to ease the regulatory burden and provide incentives to boost the sector, in the background of Commerce and Industry Minister Piyush Goyal calling on the industry to target 75 unicorns in 2022.
Bengaluru-based start-ups are expecting more incentives as the city is the ‘Unicorn Hub’, and over 20 start-ups have the potential to turn unicorns this year.

Tally Solutions MD Tejas Goenka says Digital India and Make in India movements have paved the way for the industry, but further regulatory support can unlock the true potential of this industry. “The first thing is to recognise software products as a category in its own right with classifications under both the HSN (Harmonised System of Nomenclature) and SAC (Servicing Accounting Code) codes. This will help provide clarity and appropriate incentivisation for the industry,” he adds.

According to Nasscom, the Indian Information Technology-Business Process Management (IT-BPM) industry has the potential to achieve a two-fold growth in annual revenue to reach $350 billion level by FY-2026.

Bangalore Chamber of Industry and Commerce (BCIC) president K R Sekar says the government can consider expanding the current corpus fund for start-ups and ease regulatory framework for hassle-free access of capital by start-ups from banks, financial institutions and investors.

To bring parity in taxation of listed and unlisted securities, he recommends that the holding period for unlisted securities to qualify as long-term capital asset be reduced from 24 months to 12 months. “It is recommended that the paid-up capital limit for claiming exemption from angel tax be increased to Rs 75 crore or Rs 100 crore in order to provide exemption to larger pools of start-ups,” he adds.


The sector hopes for funding in technology in schools and education systems, considering challenges posed in online education. “The government must take initiatives for bigger spending on education, push greater digitization and balancing the urban-rural gap in education. The increased allocation of funds will ensure better quality government schools which educate a majority of children,” says Shweta Sastri, managing director, Canadian International School.

Many experts believe that funding should aim at better equipping schools in future lockdowns to ensure that children are not left behind.

“The education sector is facing enormous challenges due to the pandemic and the budget is going to play a pivotal role in reviving the education system. The government must allocate funds for technological upgradation of educational institutions in rural areas so the education of students studying in these institutions does not get affected due to any other pandemic in the future,” says Niru Agarwal, trustee, Greenwood High International School.

(With inputs from Ramu Patil, Ashwini M Sripad, Uma Kannan, Ranjani Madhavan, Donna Eva)

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