BEYOND VACCINES a] zi IN THE Digital Age BUC aC Rae RUE ies¥ CFOs are now at the heart of strategy » and making decisions, not just supporting them New-Age Strategists cow career paths have been as distinetive as that of Sumant Sinha. Armed with 2 master's in int International and Public Affairs, Columbia University he plunged headlong into investment banking with stints at ING Barings and Citicorp Securities in the 90s. After a decade on Wall Stret, in the early 2000s he returned to India as chief financial officer (CFO) of the Aditya Birla Group, Over the next few years, as the Indian economy and stock markets witnessed a purple patch, it ha’s watch that the commodities conglomerate ‘would go on to acquire Novelis and Idea Cellule, ‘by 2008, Sinha had moved on ang, three years later, he founded renewable power producer ReNew Power, now one of India's largest clean energy ventures, and recently listed on the Nasdaq via a special purpose acquisition company (SPAC). Sinha isa rare breed of founders—an investment bankers tusned-CFO who would go on to don the entrepreneur hat. And itis that stint as head of finance that would have held hina in good stead when pushing growth at ReNew Power— via multiple rounds of fund-raising, buying out renewable porefolos like a hydropower project in Utarakhand and solar projects in Telangana, and listing overseas via a merger with RMG Acquisition Corp Ll, a Nasdag-listed SPAC. Sinha got into the CFO role in 2002, just ahe: economic boom that would last till 2008. In that period of ample liquidity and fecl-good, CFOs came into their own, ‘Their mandates became more complex and challenging fromm not just counting heans to rowing them. The CFO was now at the heart of strategy and making decisions, not just supporting them, They were hunting down acquisition targets, exiting non-core businesses, seeking to raise eapital national finance from the School of of the » Government's capital expenctture outlay in FY23 seen 354 percent higher than F¥22 estimates; infrastructure projects (roads, rallaays anc! logistic parks) in focus India's transitioning to acarbon- neutral economy gets momentum: Government to issue sovereign green bonds as part of ts F¥28 market borrowing programme Procuction-lnked incentive schemes and recucton of inout costs across domestic manuracturing to boost competitiveness ana create Jobs Data centres and energy storage get infrastructure assets classification: Allows firms to access easior credit Surcharge on long-term capital gains, actoss assets, capped at 5 percent Government imposes 30 percent tax on income fom anster of vitual digital assets | the push towards infrastructure spending, the other positive areas are investment aid towards startups to hoost innovation, the reduction of duties for inputs into lectronie produets to promote domestie manufacturing and digital banking initiatives, among others ‘The two main themes have been infrastructure improvement ane increasing self-reliance through manufacturing and agriculture poliey interventions,” says Rishav Jain, managing director, Alvarez & Marsal “he issuance of green bonds and promotion of GIFT are great moves to attract foreign investors.” says Ashish Gumashta, CEO of Julius Baer Indi Experts Forbes India spoke with offer comforting words—that India will be able to grow by around 8 percent in F¥23, even though it might register moderate numbers in the years after that. “The market appears to be responding to multiple factors, including the recovery in global equities after a volatile phase ‘The impact of the Budget may be coincidental. The market will be sritech looking at the actual response of the private sector in terms of asset utilisation, operating leverage, and initiative to invest in capacities,” Sinha adds. “Private sector eapex is attempted to be encouraged with a considerable element of protectionism from imported goods, shereby deepening the reliance of Atmanirbhar and the import substitution theme.” ELEPHANT IN THE ROOM ue of the areas which remains to be addressed is the ta {or individuals, and reducing the dependence of only 1-2 categories to bring in taxes. “Addressing the tax slabs for individuals and ‘expanding: the net’ were important areas which weren't addressed, yet again. The eventual ides should be that the burden on individuals is not restricted to only a part of the earning or tax paying community, and needs to be addressed in coming years," Jain says, While the fine print on disinvestment indicates that receipt from disinvestment is pegged at 65,000 crore for the current fiscal, alot will depend on when the Life Insurance Corporation disinvestment and the strategic sale in Bharat Petroleum Corporation of India take place. Those will shore up the disinvestment receipts appreciably. The government's plan to privatise two publie sector banks and one general insuranee firm has got delayed, For years, public sector banks have been struggling to tackle rising bad loans and weak lisation, whieh almost made ‘hem impossible to grow. the stock market cheer, the jury is still out on where the markets could go from here. In nine times out of 13, the markets have fallen on Budget day. While the December- ended corporate earnings have been positive, inflationary pressures and liquidity tightening could well lead to a further consolidation in the markets in coming day slabs: SAUL PANCHALLeaderBoard Fiscal Deficit Target Spooks Mint Street ‘The high level of government borrowing outlined for next fis- cal has stoked a sell-off in bond markets, with the benchmark 10-year yield crossing a post-pandemie high of 68 percent LARGELY, BUDGET 2022 HIT THE right notes, Minister of Finance Nirmala Sitharaman proposed policies to boost inclusive development, green energy, and the digital ecosystem. Although there were no changes in income tax slabs, she announced a massive 35 percent jump in capital expenditure to push infrastructure projeets multiplier effect to achieve around 85 percent GDP growth in FY28. This made it easier for markets to accept the higher-than-expected fiscal deficit target of 64 percent next fiseal nd a strong Fiscal deficit (% of GDP) Nirmala Sitharaman (centre right) announced the government wil spend more to boost growth Christian de Gueman, senior vice president, Sovereign Risk Group, Moody's Investors Service, is sceptical of the government relyingon a strong economic rebound to narrow the fiscal deficit target of 6.9 percent in FY22 to 6.4 percent in FY23, given the large inerease in capital expenditure to 7.50 lakh erore, “This poses some uncertainty, given the prevalence of pandemic- related risks: The wider than-expected deficit in the current fiscal year in part reflects higher spending on the back of the second FORBES INDIA» FEBRUARY 25,2022 Covid wave, and a larger subsidy bill driven by higher prices for food and commodities,” he says. In turn, the government's massive _gross borrowing programme to the ‘tune of 215 lakh crore in the next fiscal does not bode well for the bond market. This has made money market sraders nervous, and the benehmark: 10-year bond yield has crossed a post Covid cra high of 6.8 percent Prabhat Awasthi, managing director and country head, Nomura Tria, cautions,“ heightened trade deficit and a strong. pushin borrowing, the macro risks from a global tightening eyele would be a key concern and needs to be watched carefully.” Mahendra Jaja0, C10, fixed income, Mirae Asset Investment Managers, says money markets were disappointed that even the fies sot of 6.8 percent for FY22 was revised upwards, despite the higher-than-budgeted revenue collection. Buthe expects the “knee-jerk reaetion” on Mint Street to sn Tndia’s deficit settle down in due course”, Inflation projection is still largely in Tine with the target threshold band [of 6 percent]. The RBI has maintained an accommodative poliey stanee and swill possibly intervene to arrest any major spike in rates," he ades, Pankaj Pathals, fundl manage fixed income, Quantum MF, expe bond yields to surge further higher-than-expected fiscal det and the absence ofany announcement on global bond index inclusion isa negative for the bond market. Higher Dorrowing requirements of the Centre and state governments will put pressure on the bond markets.” Upasna Bhardwaj, economist at Kotak Mahindra Bank, says the government has refrained from a sharp fiscal consolidation: “While the fiseal expansion is expected to be pro-growth, the heavy supply is expected to worry the bond markets, NEHA BOTHDISINVESTMENTS ‘Conservative, But Realistic Target’ ‘The government missed its disinvestment numbers by more than half, and has reduced next year's target to 263,000 crore. An explainer on why and how they matter Q Whats disinvestment? ‘When the government sells stakes in its companies, it is known as disinvesement. Te includes all public entities and the shares it holds in companies. Q How does disinvestment help the government? Fiscal deficit isthe difference ‘between what the government earns and what is expends. Iris ‘measured asa percentage of GDP. Disinyestments form a significant part ofthe governments earnings. Th vear, the fiscal deficit stands at 6.9 percent; for next year, the target is 6.4 percent. To reduce its fiscal deficit, the government needs to earn mare, whieh it expects through divestments, Did the government meet its disinvestment target for the year? No. As of February 1, the government hha raised #12,029.9 erore from pure isinvestments. In last year’s Budget, Finance Minister Nirmala Sitharaman had said it expeets to raise€1.75 lakh crore by selling assets like Air Indi BPCL. and Shipping Corporation. Budlget 2022 documents show that the government has reduced this expectation t0 78,000 crore forthe year, slashing more than halFofits target “The government has been realistic about its targets, and this means itis expecting the sale of BPCL and others assets in FY23. thas raised borrowings to fund its activities, but on disinvestment, been conservative,” says Suvodeep Rakshit, senior economist at Kotak Institutional Equities. According to the government, for FY2L, its actual bt rm so has clearly. Dy aC K CL) CRORE, ITS ray Tyla receipts from disinvestments was 337,808.96 erore, Por FY21, it had targeted to enise 82 lakh crore. (Q Whats next year's target? ‘The government aims to raise 865,000 crore in the coming year. Itis the Towest projection since it has eome to power. It has also projected a nominal GDP rate at 11 percent, “The government has budgeted $65,000 crore for FY23. In the five years to FY21, India has been able to achieve more than £90,000 crore only. ‘vice, in during FYIS and FYI9. Therefore, the government mighthe able to realise its budgeted disinvestment target for FY23, given the pace of economie recovery and the buoyaney in the markets,” says Arun Singh, global chief economist at Dun and Bradstreet. ud Sic) iv QWhat did the government sell ‘The government sold Air India to the Tata Group for 2,700 rare and what does it plan to sell? "The government sold its debt-laden airline Air India to the Taca Group for £2,700 erore. Tt now plans to sell its shares in Life Insurance Corporation, Next year it plans to sell other assets it has been trying to offload, Q Why does disinvestment ‘matter to you and me? Disinvestment is important because the government does not earn enough to finance its expenses. If the government doesn't disinvest, it has to either raise taxes or borrow ‘more, As economic commentator and author Vivek Kaul explains: “Borrowing more right now means ‘that taxpayers in the years to come will have to repay. As former finance rinister, the late Arun Jaitley, said in his July 2014 Budget speech, We cannot leave behind a legaey of debt for our future generations. We cannot goon spending today which would be financed by taxation at a future date.” Poi SARKARLeaderBoard A Few Hits, But Mostly Misses ‘While focus on mental health is a step in the right direction, Covid-19 vaccinations and relief, and strengthening primary health care are missing INHER BUDGET SPEECH ON February 1, Minister of, Finonce Nirmala Sitharaman announced that India will build an ‘open platform for the national health ecosystem, which will contain digital registries of health providers and. facilities, unique health identities, consent framework and unique access to health facilities. She also announced the National Tele Mental Healeh Programme, wi building a network of 23 tele-centres for mental health counselling: nd care. Thar apart, the Budgets did not announce any specific provisions for the health are sector “Usually, Budget figures are announced in the speech. This time, they departed Irom this tradition, ‘The actual allocation to the health ministry has gone up only manginally,” says K Srinath Reddy, president, Public Health Foundation of India (PHFD. The Budget Fstimates last year for the Ministry of Health and Family Welfare (MoEIFW) stood at 271,209 erare, whi 82,021 crore. The Budget Bstimates for the MoHFW this year are @83,000 crore, This is only for the Union health ministry and does not include other allocations towards Ayush, health research, ete [was underwhelmed by the ich includes cech h were revised to Health and Wellbeing: Health and Family Welfare avusi Finance Commission Grants fr Health | Breakup of Expenditure (& Crore) Budget,” says Meena Ganesh, MD, co-founder and chairperson of Portea Medieal, a home health eave ‘company. “Over the last couple of years, the government has spent alot on vaccination and Covid9 management; but the fact of the matter is that the funclamental health wre system for the country needs significant higher investment, be it for taking care of people with chronie diseases or for elders, I did not see any specific mention of chat.” According to her, while the focus ‘on mental health isa step in the right a ray Pain From a 235,000 crore budgeted estimate and 739,000 crore revised estimate last year, the allocation for Covids18 vaccination spends has been reduced to €5,00 crore direction, one needs to waitand watch how this will he implemented Jina way that i goes heyond cities ro the corners of the counts. st year, the government had announced a five-year-plan to improve health infrastructure and strengthen health surveillance, and they might have chosen not 2 reiterate it this time, says Hitesh Sharma, tax partner and life science sector leader, EY India, “he only thing savr as an aberration from Jast year war the vaccination spends From a€35,000 crore budgeted estimate and€39,000 crore revised estimate, it has been reduced 10 £5,000 crore,” he says, One ean interpret this in three ways, aeeording to him, One, perhaps according to the government, Covid-19 is to become endemic; two, they might want everyone to incur their own costs or three, the Centre might want the states to focus more on thi health afterall, isa state subject. sive SHEAR [FORBES NDIA + FEBRUARY 25,2022EDUCATION Digital Push Allotment for sector increased by 1.86 percent wi ‘emphasis on TV channels for rural students, e-content and upgradation of anganwadis ‘With schools shut due tothe pandemic students without access to mobile phones andl devices hhadto rely on digital mobile education libraries to attend online lectures FINANCE MINISTER NIRMALA, Sitharaman tabled record 104,277.72 evore for expenditure on education for FY23— 21,053.41 erore more than the estimate of 893,224 erore for FY22 ‘The sector has been deeply impacted by the panciemie, with children and youth of rural India bearing the biggest brunt “To this regard, the PM eViDYA programme—it provides access to “quality education’ to students who do not have access to the internet—that initially encompassed 12 one class- cone TY channels will be expanded to 200 channels to enable all states to provide supplementary education in regional languages for classes 1c 12. “The availability of regional Janguage educational modules will ceahance the Hixeracy rates inthe hinterlands, over and above the metso cities. This will serve as the driver of socio-economic change, enabled through technology. Digital learning holds the potential toempower the grassroots-level population through lemocratised access to education, thereby facilitating continued learning sans infrastructural challenges, pan-Lndia," says Ujjwal and president, laf Learn, an entrance exam preparation platform. ‘8 competitive mechanism for the development of quality e-content by the teachers will aso beset up. “The The Big + 4% of naa’ poy 20cess to compute areas, 2s por NSO Report on Education, 2020 +15 milion senoos an. milion ECDY anganwadl centres were clesed dae to trepandene +246 milion ellen cous not goto school Formere than a year, acoraing ta Unicat focus on teachers' training will aid the effective implementation of new initiatives,” says Sandeep Wirkhace, MD & CEO, Indian School Finance Company However, Rishikesh BS, who leads the Hub for Edueation, Law, and Policy at Azim Premji University, says the focus on education was “disappointing, but not surprising atall?, “There is over-emphasis ondig seen that is of very ifyou have the required digital infrastructure in place. [L's] misplaced priorities,” he says. Another highlight of the Budget ‘was to allow foreign universities and institutions under GIPT IFSC ro offer courses on fintech, seience, swchnology, engineering, and ‘mathematies. “Allowing world-class universities to offer courses free fram domestic regulations will be grest as this would make such edueation tal solutions when we have Prat Mindler, an educational consultant ‘wo lakh anganwadis will alse be upgraded in the country, Finance ‘Minister Nirmala Sitharaman said inher Budget speech, Though the increase in allocation for the Saksham Anganwadi and Poshan 2.0, which includes anganwadi services, Poshan Abhiyan, scheme for adolescent girls, and national ereche scheme, ‘was just 0.7 percent, upgradation is much needed. “The transformation of two lakh anganwadi centres under Saksham Anganwadi will make these centres more learning-conducive, Often neglected in rural areas, this isa positive step towards promoting carly childhood education for childeen and equipping them better for school,” says Anil Parmar, vice president, community investment, United Way Mumbai, a non-profit organisation working in urban and sural communities “Mansy KALSHK ADDITIONAL INPUTS YMA SHEAR)LeaderBoard AGRICULTURE A Tech Boost ‘Technology support to farmers and a boost to agritech startups will increase yields, help transform sector To prouide hi-tech services to farmers, private ay publie sector under scheme that wil be launched inthe PPP made FROM KISAN DRONES TO PUBLIC > | prise potnesipstobelp deliver high-tech services to farmers, the Union Budgets Focus was om increasing the use of technology in the agricultural sector “This year's budgeted estimate for agriculture is€1,32,513.62 crore, slightly up from the total allotment oof 1,31 531.19 crore in 2021 to two departments—Department of Agriculture, Cooperation and Farmers’ Welfare and Department of Agricultural Research and Education that fall under the Agriculture Ministry Finance Minister Nirmala Sitharaman also announced in her Bulger speech thatthe procurement of wheat in Rabi 2021-22 and the estimated procurement of paddy Kharif 2021-22 will eover 1208 lakh metric tonnes of wheat and paddy from 163 lakh farmers, She added that 2.37 lakh erore will be the disect payment of mininnum support price (MSP) value to their accounts. “The government's focus on equitable MSP distribution is encouraging to see.” ch players will werk closely withthe says Kulwant Singh, a farmer from Jalandhar, Punjab, However, the Market Intervention Scheme and Price Support Scheme (MIS-PSS), a mechanism implemented for the procurement ‘of perishable and horticultural ‘commodities in the event ofa fallin market prices, was allocated €1,500 ‘crore, 62 per cent less than 23,959.61 ‘crore in revised estimates (RE) of FY 2021-22. Much to farmers’ relief, there was ne mention of the farm laws that were repealed in November 2021 afteralong-drawn farmers strike at borders of Delhi. “We were worried that farm laws ‘would be spun off into something now. We are glad that did not happen.” says Singh. Tndustry experts welcomed the a Gu Pra Piya focus on technology, “The announcement of Kisan ‘Drones for promoting crop assessment, digitising land records, spraying agri-nutrients like fertilisers Loa Deu REPEALED IN and pesticides, etc. will give afillip to increasing the yield of the small and marginal farmers,” says Amith Agarwal, co-founder and CEO, AgriBazaar, an agritech marketplace. To provide such hi-tech services to farmers, private agritech players will work closely with the public seetor, under a scheme that will be launched in the PPP mode. “the Budget has also placed agritech in ‘the right limelight with the Finance Minister reposing faith in the role of ‘these new-age players to transform the agriculture sector in the country ‘under the PPP mode,” says Prasanna Rao, MD and ca-founder, Arya.ag. There is a encouragement for agritech startups as well, including a fund with blended capital, raised under the co-investment model, ‘which will be facilitated through NABARD. Sitharaman said, “This is, to finance startups for agriculture and rural enterprise, relevant for the farm produce valve chain, The activities for these startups will include, inter alia, support for FPOs, machinery for farmers on rental basis at farm level, and technology including IT-based support.” Additionally, chemical-free farming will be promoted throughout the country with a focus on farmers’ lands in the 5 km w corridors along river Ganga formers to adopt natural farming, a comprehensive package for the participation of state governments and MSMEs is tobe introduced,” Sitharaman said. States have also been encouraged to re syllabus of agricultural universities to include natural, organic farming, and modern agriculture, “This isa big step in ‘ensuring healthy produce for Indians and making our agriculture export- ready. Especially for premium markets like Europe, the USA, Japan, etc,” says Agarwal of AgriBazaar ‘MANS KAUSHIK & NANI THAKER ila ES ve the [FORBES NDIA + FEBRUARY 25,2022HOSPITALITY Hungry For More Nirmala Sitharaman’s credit line fails to cheer up the hospitality sector. Industry veterans don't see a revival without push for consumption NEARLY TWO YEARS AFTER Covid-19 erippled the hospitality industey, the government offered some succour to the sector, Finance Minister Nirmala Sitharaman announced that the Emergency Credie Line ‘heme (ECLGS), which has provided additional credit ta over 130 lakh MSMEs during the pandemic, will be extended by a year, 0 March 2023, with an eye con the fragile hospitality sector. Its guarantee cover is, Iso set to be expanded by 50,000 crore toa ‘otal of 85 lakh erore, and the additional amount ill be earmarked exclusively for hospitality and related enterprises, ‘Bur the proposals failed to cheer up industry veterans. “This isa welcome move, but the government has acknowledged only 10 percent of the problem,” says Kapil Chopra, founder and CEO, The Postcard Hotel. “The speech talks about job creation and boosting the economy, where is the BUDGET Baas THE ECLGS NS or ian CSU g push for consumption that would allow people to go out to eat and help restaurants survive?” Chopra, also the chairman of the board of online restaurant reservation platform EazyDiner, believes one way the government could have boosted. consumption is by making the LTA taxable every year, instead of every ternate year, asis the mandate. “In Bhutaa, they are giving %3,000 co every employee affected by the pandemic, Out here, ‘one out of four people in hospitality has lost jobs, but the government does nothing to boost consumption. This step is akin to emeryeney oxygen saturation fora patient in an ICU ward, ‘There is nothing to help that patient recover,” adds Chopra. Tn its Covid impact report Iaunched after the second wave, the National Restaurant Association of India (NRAD, which represents kh eateries, had estimated that almost 24 lakh people lost their jobs, and around 25 percent of the In its Covid impact report launched after the second wave, the NRAl estimated that almost 24 lakh people had lst their jobs, and around 25 percent of the restaurants had shut permanently restaurants had shut permanently, “The numbers are only going to rise alter the third wave,” says Sagar Daryani, NRAT viee president, and CEO and co-founder of Wow! Momo, For some time, the restaurateurs have been clamouring for a number of policy changes. “Like, if we pay the licence fees for the entire year and then have to shut shop for three ‘months, give us a three-month extension on the licence. But we have not got any of those," says Daryani. “With the additional credit cover, the government has enabled us to take debt. But we have to pay back. Ifthe sis not flourishing, what good Nakeul Anand, chairman of FAITH (Pederation of Associations in Indian ‘Tourism & Hospitality), the poliey Jederation of national associations representing the tourism, travel and hospitality industry, also feels the government should have extended ‘more immediate support to the sector. Says Madhavan Menon, managing director of Thomas Cook (India) Le, “The Budget made no reference to the industry's recommenddations to aid revival, including rationalisation of taxes (a complete GST holiday exemption of TCS on outbound tour reduction in indirect taxes), removal of SEIS henefit capping of 5 crove. While announcements are made, says Anurag Katriar, founder and managing director of Indigo Hospitality and a former NRAL president, banks are often wary of the sector, given its tottering status through the pandemic. “The government should voll out guidelines so that genuine people with a good record should get benefits irrespective ofthe outlook the banks have for this sector,” he says. Postcard Hotel’s Chopra recalls the tortuous six months it took him to get a loan. “I do not think the governments get tourism, and Ido not thought process anymore,” he says. “RATHAKALI CHANDA Tndia is incredible with itsLeaderBoard Finance Minister . assets, which are not issued tas” | "Taking a Stand |i s:stsisic Sitharaman announced -gal tender’ status. It Budget 2022, the on Crypto enables the user to conduct Pe poe ames welnme move io ax ree taxes on all gains from CRYPTOCURRENCY ora bank, ‘Market experts have welcomed the move, wane more clarity. Nikhil Kamath, co-founder of True Beacon and Zerodha, says, “Ieis a positive step to see that this Budget will rake steps to regulate virtual curreney. But how this will be implemented will determine if establishing ACEDC will result in nse any other ineome. less expensive curreney will be the digital currency. | clarity on it, Pere bank digital ‘be used to purchase goods ‘Everything that prevails says Avinash currency and services.” created by individuals. And | ZebPay, a cryptocurrency isa digital form of fiat plans to introduce a Bill are taxing profits made gives the entire ecosystem, backed by blockchain and cryptocurrencies in India’ Experts feel the the road ahead.” from decentralised virtual NAINI THAKER FORBES INDIA» FEBRUARY 25,2022