Chennai: Keeping in mind progressive growth, the Union budget announced in the Parliament had something for all sectors to cheer about. With the government leaving many sectors untouched, the need for more action to be taken follows as a consequence.
Industry leaders have reacted to the budget released by Nirmala Sitharaman and here are a few snippets of what India Inc had to say.
Recognise role of RE
The Union budget has focused on the nation’s growth and brings a positive sentiment to the overall economy. With its focus on the agricultural and rural sector, infrastructure, education, job creation, digital economy etc, it is a budget for all.
India’s real estate sector has a reason to cheer as the Finance Minister has announced a range of sops for real estate developers as well as homebuyers in the budget. These measures are expected to boost housing sector as well as investor sentiments in the near future and will provide ample opportunities for the home buyers to invest.
On many fronts, this is a favorable and bold budget for the real estate industry. A massive boost for infrastructure will not only benefit the realty sector but also help other industries and create large scale employment in the economy. The government’s focus on infrastructure development of tier II and III cities will surely make these cities ready for next round of urbanisation.
-Founder and director, House of Hiranandani, Surendra Hiranandani.
Ticks all boxes
The budget ticks all the right boxes by maintaining fiscal prudence and addressing near term issues of stressed sectors, while also maintaining its thrust on infrastructure creation, skill development and ease of doing business. On the back of fears of a populist budget, the reduction in fiscal deficit target for FY20 to 3.3 per cent came in as a positive surprise. Further, the Government has also addressed the stress faced by the NBFC/HFC and banking space through a one-time government guarantee for the purchase of high-rated pooled assets and recapitalisation of the PSU Banks. The extension of lower corporate tax rate to corporate having a turnover of Rs 400 crore will act as a stimulus for the economy. The focus on infrastructure continues with a vision of spending Rs 100 lakh crore in infrastructure over the next five years
– Prashant Sharma, chief investment officer, Aviva Life Insurance.
The government’s focus on positioning India as the top destination for research and innovation augurs well with the interests of the ER&D industry. Moreover, the announcement on providing support to the skill development initiatives related to AI, IoT, 3D printing, VR, robotics has the potential to establish India as a global talent hub for digital technologies. Lastly, earmarking Rs 10,000 crore over a three year period towards building a wider ecosystem of electric vehicles is a welcome move. It is now for the value chain players to come together and replicate the success achieved by Indian ER&D players for global auto majors on the EV front.
– CEO and MD, L&T Technology Services, Dr Keshab Panda.
Budget with a difference
The Union budget is bold and innovative. It is the budget with difference. The Government has rightly focused on E-vehicles, rural empowerment and overall economic development.
The budget has provided vision for job creation by focusing on training centre, two per cent interest subvention for industries particularly rural and tiny sector, women empowerment through self help group to get Rs 1 lakh under Mudra, over draft limit increased etc.,
Comprehensive restructuring national highway programme for creation of national highway grid etc., creation of a new PPP model to usher the new draw of Indian railways, encouraged railways to invest more on suburban rail network via special purpose vehicle will certainly boost the infrastructure facilities are major initiatives for Railways.
However, SICCI feels that with the importance given more towards electronic vehicles by way of tax concessions, duty reduction etc, the existing auto sector component manufacturers will be affected severely. Secondly the additional duty of excise (road and infra cess) on petrol and HSD is inflationary.
– President, SICCI, R Ganapathi.
Coworking sector given a miss
The full-fledged Budget 2019 is commendable as it has all the right intentions and measures that can be a gamechanger for the Indian economy. The budget is pro-rural and middle class and oriented at economic development.
While the government has been positive on a macro vision for the rural economy, some measures could have been taken to bolster the co-working sector specifically.
Co-working has become a thriving ground for start-ups. Also considering that startups do not earn the profit in their initial business years, we were expecting that the government could have lowered the income tax slabs for startup enterprises which would have supported startups to reduce costs and this would have increased demand for co-working spaces. Coworking firms were expecting that the government would altogether eliminate Angel tax this Union budget as it would enable the firms to lease more spaces for start-ups, enterprises, MSMEs and entrepreneurs.
– Chairman, 315Work Avenue, Manas Mehrotra.
The budget carries forward the strategy outline spelt out in the Economic Survey for driving investments and thus stimulating growth. Overall investment in the economy should get support through the proposed infusion of Rs 70,000 crore into the PSBs.
The Government has given special focus to infrastructure, manufacturing and financial services as the growth drivers for the next five years. Majority of the proposals signal continuity of the Government’s policy agenda on development. Containing the fiscal deficit at 3.3 per cent in FY 20 is a commendable balancing act, even while prioritising investment as a growth engine leading to increase in capex at seven per cent year-on-year.
The proposal to deepen the bond market should help improve avenues available to raise capital. This, combined with the Government’s proposal to issue more foreign bonds should bring down capital costs, as seen from the initial reaction in the bond market.
– Executive chairman, Murugappa Group, M M Murugappan.
Importance given where due
The budget reiterated the importance of infrastructure development in the country. We are happy to see the proposal of government to invest Rs
100 lakh crore in infrastructure over next five years gives a great push to the development of the nation, complemented by initiatives such as BharatMala.
We welcome the initiatives rolled out to stimulate rural market and MSMEs, which are the backbones of the India economy and are getting their much-needed attention. This will generate consumption growth and demand at the grass root level, which will help all sectors of the economy.
In addition, the capital infusion into banks will boost lendings to NBFC and will put them in better health and this could help the CV industry.
While we are pleased to see the emphasis and subsidies given to the development of the electric vehicles for a pollution free India, a well-placed scrappage policy along with reduced GST rates would have been a welcome move and helped the auto economy to do better in a relatively slow year.
The additional excise duty of Re 2/ litre on petrol and diesel will amount to increased pressure for fleet operators. The industry is already is seeing an increase in capacity and poor offtake.
– CEO and MD, Daimler India Commercial Vehicles, Satyakam Arya.
Credit flow to improve
It is encouraging that the fiscal deficit target has been revised downwards from 3.4 per cent to 3.3 per cent. Strengthening PSU banks’ capital and improving RBI’s oversight on the financial sector will likely improve the flow of credit in the economy. A series of measures to enhance capital flows and employment generation are also great steps. Better growth with macro-economic stability will be the ideal outcome
– Senior vice president and CFO, Wipro Limited, Jatin Dalal.
The correction in the government of India’s estimated tax revenue for FY20 relative to the interim budget is entirely unsurprising, given the large shortfall in tax collections in FY19. The marginal change in the targeted level of the government’s fiscal deficit for FY20, combined with the proposal to raise a portion of the borrowings abroad in foreign currencies, as well as the market’s expectations of continued policy rate cuts by the Monetary Policy Committee and a benign outlook for global interest rates, will cap G-sec yields in the near term. Nevertheless, the market will closely scrutinize the incoming trends for revenues, disinvestment proceeds and expenditures, to assess the evolving likelihood that the fiscal target of 3.3 per cent of GDP for FY20 will be achieved.
– Principal economist, ICRA Ltd, Aditi Nayar.