Finance minister Nirmala Sitharaman presented her maiden Budget in the Lok Sabha on Friday. Here are the reactions from India Inc.
Chandra Shekhar Ghosh, MD & CEO, Bandhan Bank
The Finance Minister’s maiden Union Budget is growth focussed and builds on the foundation that the government created in the last term. The sops announced in the affordable housing segment is a welcome move not just for home seekers but also for builders, banks and HFCs.
The focus on infrastructure, entrepreneurs, small businessmen and medium sized companies through the various announcements is positive news for the economy. The finance ministry’s move to discourage cash payments will help expand the digital payment ecosystem bringing in more consumer convenience and accountability.
Sanjiv Bajaj, MD, Bajaj Finserv
The first budget of the new government lays out 360 degree ideas for the next five years which stretch from infrastructure, investment, the government divestment programme to changes in the direct and indirect taxes.
Very happy to also see the creation of world class institutions and India now has three in the top 200 global institutions. It is important to see how the government executes all these because that will make the difference between ideas and action. Budget clearly focuses on immediate job creation, land reforms, labour reforms and availability of liquidity both for the short term and long term which will help to take the economy to the government’s goal of an 8% CAGR over the next 5 years and take us to a $5 trillion economy.
Ashish R. Puravankara, managing director, Puravankara
With the Union Budget 2019, it appears that the government is steadfast on its ‘Housing for all’ goal. There are multiple initiatives that will bode well for the economy and the real estate sector such as ₹100 lakh crore investment in infrastructure and the continued focus on affordable housing. All of this could potentially have a domino effect on job creation, which is one of the pressing issues for the nation at the moment.
The proposal to get RBI as a regulating authority of housing finance sector should improve the governance and also the announcement that the uniform rental law is being reviewed is another welcome move.
Nivruti Rai, country head, Intel India and VP, Data Centers Group, Intel
It's a welcome move for the technology ecosystem and I am happy that the government is focusing on high-end technology manufacturing. I believe that this initiative complements India's strengths as a global hub for technology development and adoption. This will add further impetus to design, product development and design-led high value manufacturing in India. This also bolsters India's “Make in India” initiative and will enhance the country's competitiveness and growth
Ajay S. Shriram, chairman and senior managing director – DCM Shriram
It is good to see investments across the board whether in government sector or private sector as a strong focus area of this budget. With investments there will be enhanced economic activity, job creation, boost in revenue and benefit to people across the board. I do hope the disinvestment program will move in an objective manner to not only improve government revenue but also optimize performance of businesses."
The attention in the budget on initiatives related to infrastructure: road, water, electricity in rural India are positive markers for both ease of doing business and ease of life for farmers in Rural India.
Sumant Sinha, chairman and MD, ReNew Power
The budget correctly stresses on boosting infrastructure & recapitalisation of banks and the financial sector, which is required for keeping the wheels of the economy in motion. Also the relaxation of FDI norms in certain sectors and the decision to invite global bids in manufacturing will help attract foreign capital and boost domestic manufacturing. But what can truly transform the lives of many are various measures like one nation one grid, focus on affordable housing and creating a green infrastructure which aims at ease of living for every citizen of this country.
Partho Dasgupta, CEO, BARC India.
Today’s Budget directionally augurs well for boosting long-term economic growth by focus shown on infrastructure improvements, strengthening benefits to MSME sector and investments on improved skill sets of human resources. Steps taken to attract investments by relaxing FDI, FPI and NRI norms, coupled with boosting public sector banks and NBFC, will trigger the much-desired credit boost.
Coming to the M&E industry, one will have to carefully look at the impact of allowing FDI in the media sector.
Raghav Swaminathan, CFO, Wipro Enterprises
We have set a laudable target of becoming $5 trillion economy in the next few years. This calls for a sustained real GDP growth rate of 8% with stringent commitment to fiscal discipline. Thefinance minister in her budget proposed several welcome steps such as promotion of MSMEs (2% interest subvention), promotion of startup businesses (easing angel taxation), lending government support to NBFC/HFCs which will improve access of capital, simplification of labour laws and extending reduced corporate tax of 25% to companies with turnover of up to ₹400 Crores.
Real Estate likely to get a fillip due to additional tax break on interest on home loans for affordable houses. Incentivising the usage of electric vehicles through tax incentives and adoption of Zero Budget Natural Farming would improve the adoption of green economy.
Zarin Daruwala, CEO, India, Standard Chartered Bank
The Budget lays down a vision for the next five years while staying rightly focussed on completion of the already initiated policy changes. It also signals the government’s commitment towards fiscal consolidation. The steps to shore up the financial sector via PSU bank recapitalisation, partial credit support to financially sound NBFCs and change in regulator for HFCs are key positives, in my view.
The measures to serve the interest of various sectors - MSMEs, affordable housing and underprivileged segments like retail traders - are much needed and welcome. The announcements like further liberalisation of the foreign investment regime, issuance of sovereign Dollar bonds, deepening of long-term bond markets, rationalisation of labour laws, focus on infrastructure investment are steps in the right direction. On balance, the Budget would help boost the medium-term growth potential of the economy.
Tarun Mehta, CEO, Co-founder, Ather Energy
Government has already moved GST Council to lower GST on EVs from 12% to 5% and the additional income tax reduction is a major boost for end consumers to purchase EVs. It addresses the concern of the upfront cost of purchasing electric vehicles. This is the best example of a consumer driven change and is also how Ather envisions the EV sector to achieve scale and growth. It now becomes imperative that OEMs chalk out plans that allows the industry to scale up and meet the demand for compelling products.
Meena Ganesh, MD & CEO, Portea Medical
The budget is definitely pro-entrepreneurship and provides clarity and relief in respect to the arbitrary Angel Tax that has been stalling startup growth in the country over the past few years. Startups no longer need to be worried about coming under the scrutiny of the Income Tax Department as long as there is a full disclosure of the identity of the investor and source of income which is fair and straight forward. The exemption of capital gains from the sale of residential property for investment in startups till FY 21 is a welcome move.
The new dedicated stat-up channel to be operated by the Doordarshan Group will encourage people in the remotest parts of the country to take the path the entrepreneurship and will help SME's strengthen their operations. The relaxation of conditions for carry-forwarding and setting off company losses will also boost the ecosystem.
Arun Thukral, MD & CEO, Axis Securities
Though the finance minister did not disappoint by continuing with the borrowing and deficit targets set in the interim budget to contain the fiscal, the immediate steps needed to energise the economy were missing. The diversification of government borrowings with an increased share of sovereign external debt in external currencies was a welcome move.
This move was cheered by the bond markets as this would in-turn help to reduce the crowding-out of private borrowings and reduce the cost of funds for India Inc. There was not much relief for the middle-class in the budget. Additional cess of ₹1 on petrol & diesel acted as a dampener.
Surendra Hiranandani, founder & director, House of Hiranandani
While the government has taken several concrete measures, there is still a long way to go. We hope that the government looks into some of the key concerns raised by the industry and addresses the same soon. To bring back growth in the sector which is so vital to any developing economy, we expected the government to impart industry status to the sector which would enable developers to cut capital costs and pass on the benefits to consumers. We were also expecting single window clearance which has been a long pending demand from the sector.
There was significant expectation to cut GST rates to a single, standard rate, and not have multiple rates or taxes. The abolition of stamp duty or its incorporation under GST would have been an added advantage. The need of the hour is to lower interest rates which will help resolve the existing liquidity crisis and boost housing demand. Also, there is certainly a need to relook at the tax structure. There must be reconsideration to reduce the percentage for the ₹5 lakh to ₹10 lakh slabs as that will reduce burden and increase disposable income which will aid liquidity.
Ramaswamy Venkatachalam, managing director, Banking and Payments, FIS
We believe the Union Budget 2019-20 has laid robust foundation for digital payments growth in the country. The government has taken number of initiatives to promote digital payments in the country, this will indeed persuade people to purchase goods and services through digital banking transactions. The government proposal to levy TDS of 2% on cash withdrawal exceeding ₹1 crore in a year from a bank account will encourage MSMEs to conduct business through digital route.
We believe BHIM, UPI, Aadhaar Pay, NEFT, RTGS will be more used by the businesses making India less cash economy, as the government has announced that commercial establishments with annual turnover of ₹50 crore will have to use these modes of payments while no charges or merchant discount rates will be imposed on customers or merchants. This is a very reassuring move to stimulate digital payments in the country, particularly in Tier II and II cities.
Kalyan Krishnamurthy, CEO, Flipkart Group
It is good to see the government renew its commitment to boost ‘digital India’ in the budget presented by finance minister Nirmala Sitharaman. The government’s vision on bridging the rural-urban divide with Internet penetration will be pivotal in transforming India into a $5 trillion economy.
It is good to see the impetus given to startups, MSMEs and FPOs -- which form the backbone of our economy and also to electric vehicles. Further, by setting up a National Research Foundation, addressing challenges faced by startups, and committing to transforming the education system, the Budget is set to boost innovation in the country. Innovation will form the bedrock of the digital economy in India.
Puneet Dalmia, managing director, Dalmia Bharat Group
It is reassuring that the FM at the very outset of her incisive speech acknowledged members of India Inc as creators of India’s wealth and India’s jobs. The Budget this year has its heart in the right place, specifically in context of balancing the rural and the urban developmental priorities, boosting investment to spur growth and the eco-friendly development thrust as is evident in the government’s emphasis on green and sustainable practices.
For India to reach its goal of a $5 trillion economy by 2025, rapid investments in infrastructure is key. Towards this end, the proposed investment of ₹100 lakh crore will provide the right impetus. I am optimistic that the proposed restructuring of the national highway program will prove to be another significant boost for infrastructure with renewed focus on dedicated freight corridors and road and waterways development.
Anupam Pahuja, managing director, PayPal India
The budget provides a blueprint for the Prime Minister’s vision of a $5 trillion economy, with a focus on ease of doing business for MSME’s and ease of living for citizens. The Budget emphasizes on enabling growth for traditional industries and artisan while offering them business and technology incubation facilities, which is commendable.
VS Parthasarathy, CFO, Mahindra Group
- This was a governance-focused Budget pivoting around technology, digital and enhancing the ease of doing business in India.
- There was a clear focus on structural and administrative reforms – for ease of living, MSME’s, and IT assessments.
- There was a reimagining of solutions to old problems, for example sovereign bonds, one-time six month first 10% guarantee on NBFC loan pools, 100% FDI in insurance intermediaries, allowing FII investment in NBFC debt security, and NRI portfolio route to be merged with FPI for seamless investment in stock markets
- The Budget has a clear stamp of sustainability with a focus on growing the infrastructure and demand for electric vehicles.
Sampad Swain, CEO & co-founder, Instamojo
With India set to become a $3 trillion economy this year, the first Union Budget by the Modi 2.0 government has introduced several benefits for the MSME sector. Over the years, MSMEs have been battling to get loans, given their inability to produce relevant assets as evidence. In fact, the current gap between the demand and credit supply within the Indian MSME sector is about $230 billion. The introduction of the ₹1 crore – 59 minute [ for approval] MSME loan brings great relief to small business owners, making easier accessibility and processing of loans through a single portal.
This in turn will translate into the stability and growth of the sector, with the sustenance of existing business and birth of new ones. Also, the pension programme for 30 million retail traders is an encouraging move, keeping in mind that the Indian retail space is still majorly driven my small business owners and traders. This not only brings a long-term life plan for these traders, but also helps towards the gradual formalizing of this majorly unorganized sector.
Sreeraman Thiagarajan, co-founder of Agrahyah Technologies
The Union budget 2019 presented by Finance Minister Nirmala Sitharaman is an anti-populist strategy that will strengthen the core of our economy by creating multiplier effects that would set the nation on course to achieve the targeted of $5 trillion economy by 2024. All entrepreneurs, whether tech startups, a MSME or an artisan have equal incentives to make and thrive in India. The resolution of ambiguity around Angel Tax will lead to more capital infusion into the startup ecosystem.
The 2% hike on duty for Gold may lead to people choosing SIPs and MFs for savings and wealth creation, the waiver on MDR and introduction of 2% TDS on cash transaction exceeding 1 core will boost digital payment adoption.
Dinanath Dubhashi, managing director & CEO, L&T Finance Holdings
Union Budget has taken several measures to reduce risk aversion and increase lending to NBFCs. Measures like one time partial six-month guarantee to PSBs to buy sound NBFCs' loans and higher recapitalisation of PSBs require a special mention. Higher regulatory powers to RBI over NBFCs and return of regulation of HFCs back to RBI will definitely restore the confidence for well governed NBFCs.