Impact of union budget on the less talked about shipping, SME & eCommerce sector

The union budget for the year 2017, was presented by the Finance Minister, Shri Arun Jaitley, on the 1st February of this year. After the audacious move on demonetization by the Prime minister of the country, Shri Narendra Modi, every citizen of the country had his eyes and ears open, for every aspect of the union budget that would cast an effect on them. Hopes and aspirations were up and there was a general wind of speculation about the possibilities that could unwind after the budget was presented. While the major players of the market had their eyes set on the taxation slabs that were to be presented, there was a major attention span spewing across the highlights of the budget for the newly opening digital India, start-ups and eCommerce domains in India.

With the advent of the age of digitization, one cannot alleviate himself from keeping an eye open for the major changes and developments that are taking place, ensuring that India spearheads with targeted resources, into the sphere of competition that is ruling the world economy. It is a proud moment for the country to witness a rapt attention that has been given to the digital sector and the upcoming Ecommerce domain as well. The finance minister and the budget committee have laid equal prominence for the people belonging to the small and medium enterprises as well, which is manifested well in the provisions of the budget.

With the advent of the age of digitization, one cannot alleviate himself from keeping an eye open for the major changes and developments that are taking place, ensuring that India spearheads with targeted resources, into the sphere of competition that is ruling the world economy. It is a proud moment for the country to witness a rapt attention that has been given to the digital sector and the upcoming Ecommerce domain as well. The finance minister and the budget committee have laid equal prominence for the people belonging to the small and medium enterprises as well, which is manifested well in the provisions of the budget.

The budget manifests its provisions, making it simpler for businesses to operate and perform in the competitive environment. It is good to see that India is making major strides in the direction of development with spearheaded efforts.

What does the budget say about Ecommerce, SME, and digital sector?

In a major attempt to boost the eCommerce domain and as an enhancement to their demonetization drive, the finance minister has laid a strong emphasis on a cashless economy and has also introduced various elements in the budget that encourage conducting cash transactions.

The finance minister, through his immense focus and rigid efforts, has given a ray of hope and made it very clear that the target for the Indian economy, in the coming days, is to take a base on a cashless economy. The budget of 2017 makes it very clear that the government intends to take its idea of a digital economy, ahead by all means and resources. Digitizing the economy will act as a key element in bringing the benefits of modernisation to the economy. This, in turn, is bound to benefit the eCommerce sector by all means.

The finance minister has also made it very clear that further liberalization of foreign direct investment in India will be encouraged. As a result, we will be seeing a great leap in the quantum of investment by outsiders in the coming few months. This will create a domino effect in the economy, where we will be able to witness a rise in the number of employment opportunities for people and as a result, greater development for the eCommerce sector.

One of the major jumps that have been unveiled for the small and medium enterprises in the budget this year, is a clear-cut tax reduction of 5 percent, for companies that have a turnover of up to 50 Crores. This means that sellers across the country are going to benefit immensely as, almost 96 percent of small and medium enterprises, will be benefiting from this tax reduction.

This reduction in the rate of corporate taxes, combined with the Pradhan Mantri Mudra Yojana, will encourage the small and medium enterprises in the country to purposefully evaluate new entrepreneurial opportunities. This also means that the Ecommerce sector is set to witness a boost from activities of such small and medium enterprises. Even the big names in the Ecommerce industry have welcomed the changes introduced by the budget this year. This could also mean a major boost for the digital India move of the government. The small and medium enterprises will get a major motivation to deal in cashless means. In terms of incentives, the government could not have given a more direct and major form of boost to the small and medium enterprises.

While digital India and start-ups have remained the major buzz words in the budget this year, the budget needs to focus more aptly on the maritime industry. The country has a major coastline of over 5000 kilometers. In spite of that, only 1000 million metric tons of cargo are handled by the maritime industry in a year. The maritime and shipping industry needs a major boost and backing that can only come after major fund allocations from the budget. Also, to achieve the real essence of the Make in India campaign, it is essential to put the maritime industry at the forefront of the whole scene. Foreign Direct Investments in the shipping sector can give the major overhaul that the industry has been looking for. If private participation was also allowed in the industry, we could have witnessed a major incentive being given to the maritime industry. Momentum is definitely lacking on this front and the budget could have focussed more in this sector.

The lowdown

Although the budget faced a lot of criticism and opposition from the opposition parties in the Lok Sabha, it is clear that it is an empowering and boosting budget which has targeted the major moves in the country. There is a clear focus on digitization and it seems that the Modi government id focused on its aim of bringing and actual and deliberate change in the way things have been moving around in the country for some time now. It is hoped that in the coming days, we will be able to see these budget changes in a more refined and positive manner as the country develops and grows.

ShipRocket is India’s first automated shipping software that aims reduce eCommerce shipping to its bare bones. We have taken a step forward in simplifying eCommerce for Indian merchants and saving their precious time and money.

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Shalini Bisht

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