Editor's Note: 'Children of Liberalisation' is a News18 series tracking the Union Budget expectations from 30-year-olds across different sectors, from the prism of 30 years of economic liberalisation in India.
Liberalization and reforms have bred successful entrepreneurs in India and the First Generation Companies have made quite an impact in the Indian Economy. The First Generation Companies have made an impression in almost all the sectors of the economy i.e. IT, Infrastructure, Automobile, Real Estate, Power Transmission, Agribusiness, Ed-Tech, Retail, fashion etc. Under the leadership of our Prime Minster Shri Narendra Modi, many initiatives have been taken to empower startup growth like Start-up India, which will boost entrepreneurship, economic growth and employment growth across India. I believe this is the golden era of India’s entrepreneurial journey, as start-ups with disruptive potential are scaling up rapidly. Post-liberalisation, India’s entrepreneurial ecosystem has been steadily evolving. As the economy witnessed a huge structural shift from the capital-intensive manufacturing sector to asset-light services, a clutch of educated, experienced corporate executives with little financial cushion and business legacy took the entrepreneurial plunge. It is a different world now. Hundreds of educated, young and seasoned executives, many fresh out of college, are looking away from a corporate career to turn entrepreneur.
Liberalisation has unleashed a lot of energy within the system. It has given a free rein to do things on merit. With FDI coming to India, and this led to the emergence of homegrown private-sector companies too. The service sector has seen tremendous growth and there are a number of factors behind it. Liberalisation has enabled free capital flow in our country, allowing companies to access the same easily from investors. It has empowered business enterprises from excessive government control and has given them freedom to make their own decisions regarding services, pricing, marketing etc. Post-liberalisation there is increased scope of merger and acquisitions has posed threat to the employees of smaller firms and the employees had to undergo a rigorous re-skilling which sometimes lead to the stagnation of productivity.
Last year, the central government announced tax relief for start-ups as part of its efforts to boost the ecosystem in the country. It was a liberating move on the part of the government. Offering a three-year extension to increase the eligibility of start-ups to claim the deduction is a boon for young companies that are slowly moving towards profitability. For the startup industry, initiatives like 'Make in India' have helped put Indian companies at the forefront and drove international visibility.
2020 was a year full of challenges for livelihoods and the overall economy of the country, sparked by the COVID-19 pandemic. With the Union Budget just around the corner, every sector, including the Indian startup ecosystem — the third-largest startup ecosystem of the world — is eagerly waiting for the annual budget, to be presented by Finance Minister Nirmala Sitharaman on February 1, 2021. While the automobile sector was financially and economically impacted due to the coronavirus pandemic, but the pre-owned luxury car market grew at a rapid unusual pace. Looking at the economic slowdown, the current situation requires attention from the government as to uplift the demand and spend by consumers. We expect cuts in GST rates on pre-owned cars, and rationalising the tax structure, and expecting the import duty to be reduced so both customers and business owners can be benefitted on a whole. The overall automobile sector is a crucial contributor to the country’s GDP and the government must take steps to ease the implementation of Bharat Stage VI norms which may lower the demand until the public fully understands the policies.
With every budget, an initial question is of nominal and real growth forecasts for the economy. Subject to some sectoral variations, the recovery has been broad-based. In this respect, this Budget is as important as 1991’s, and need to be bold, risky, and near-desperate to bring radical changes. In the past, India’s budgets have navigated through and even triumphed over humungous crises. India’s first post-Covid budget has to be significant, to lift and show a roadmap for the economy that has been wrecked by the pandemic. It should shape public expenditure in social and physical infrastructure, state a medium-term fiscal policy, detail an environment for private-sector investment, introduce reforms in land, labour and capital markets, and incorporate technology to improve governance. India needs both a healthy population — working, studying and consuming freely — and restored financiers who can support credit while cushioning any external shock.
The novel coronavirus waves have hit every industry, disrupting the way they used to operate. It's no different with the pre-owned car market which is experiencing a paradigm shift right now.
Digitalization is another segment where pre-owned luxury car dealerships are evolving as business owners. While some have introduced features like virtual tours and car home deliveries, others have launched mobile applications to help their customers decide within the comfort of their homes. Also, COVID-19 has had a huge impact on changing buying behaviour and their views towards used luxury cars. The economical setbacks, professional setbacks, hit on income have added to the slump of the automobile sector, even more for the luxury vehicles.
The author is the MD and Co-Founder at Luxury Ride.