Budget 2020 points to the government’s focus on skill development and efforts to boost growth and entrepreneurship. Here are some reactions from India Inc. about the Budget.
Anil Agarwal, executive chairman, Vedanta Resources
The government has chosen fiscal prudence over a massive spending programme. Now, it’s priority should be to efficiently finance and rapidly implement the National Infrastructure Pipeline worth ₹102 lakh crore it has previously announced. This will provide the necessary boost to demand in the economy.
The budget has done away with the Dividend Distribution Tax, which was a deterrent to investors, particularly foreign investors. That the government has decided to divest a part of LIC is a bold step and should pave the way for aggressive divestment of various other public sector enterprises.
Puneet Dalmia, managing director, Dalmia Bharat Group
It is evident that the government has chosen to take focussed steps and provide sector specific boost, keeping the compulsions of fiscal deficit in mind. At the same time, a lot now hinges on the government’s ambitious National Infrastructure Pipeline programme that aims to attract investments of over ₹100 lakh crore in the next five years. If the 6,500 identified projects are executed well, this one single programme has the potential to significantly alter the Indian landscape, create lakhs of jobs, provide robust business to ancillary industries like steel and cement, and prime the broad economy. It is now imperative that the government gets down to immediately rolling out the fine print of this gigantic infrastructure push so that projects can take off in right earnest.
Anil Chaudhry, zone president and managing director, Schneider Electric India
he plan to provide standalone solar powered pumps to 20 lakh farmers, allows farmers to generate solar power and set up large solar power capacity along the rail tracks will encourage the use of clean and renewable energy. Further, the decision to extend concessional corporate tax rate of 15% to new power generating companies engaged will give a major boost to the renewable sector.
Additionally, the focus on ensuring ‘smart metering’ replacing conventional energy meters by prepaid smart meters in the states and UTs over the next 3 years will prove to be a positive step in addressing the financial stress of DISCOMs, if there is 100 percent compliance. This will also give users the right to choose their distributor and decide how much they want to pay.
Rajiv Agarwal, CEO & MD, Essar Ports
It is a well-rounded budget with focus on infrastructure development, new age technologies, and growth of agriculture, and allied sectors. This will definitely be good for economic growth in the long run, which in turn will foster trade.
A. K. Das, Managing Director & CEO, Bank of India
Union Budget 2020-21 is forward-looking in as much as it aims to revive demand and elevate economic growth. Higher allotment of budget for rural, education and infrastructure pipeline is certain to improve effective demand. Other feel good elements of the Budget include sizeable increase in DICGC insurance threshold, subordinate debt facility and extension of restructuring window for MSMEs, Liquidity support to NBFCs and Tax holiday in the affordable housing segment. These, alongwith rationalisation of taxes are likely to revive demand and bring about impetus in the real sector.
Kamlesh Rao, CEO Aditya Birla Sun life Insurance
The Finance Minister has announced a balanced budget inspite of existing challenges in hand. It has focused on generation of employment and inclusive growth through increased expenditure on rural economy, infrastructure, MSME and healthcare. Abolition of DDT, tax relief to middle class and lower middle class segments along with simplification of the tax regime will improve public sentiment and augur well for the economy.
Ravneet Gill, MD & CEO, Yes bank
"From an allocation perspective, the total budgetary provision for the rural sector, which includes farm and non-farm development, is poised to grow by 13.4% in FY21 after a significant jump of 34.8% in FY20. In addition, the relaxation on personal income tax should also offer some relief to the salaried class and buoy overall consumption demand in the economy. On the investment front, increase in the capital expenditure ratio to a four year high of 1.8% of GDP in FY21 generates hopes of crowding in of private investment.
Ritesh Gandotra, director, Xerox Business Services
The focus on data, digital records, connectivity and data security across key citizen services underlines the government’s faith in technology to deliver better governance, a safer society, and a more competitive economy. The proposals for building data centre parks and setting up the ambitious National Mission of Quantum Technology and Application are significant announcements to put the technology intent into practice.
Ameera Shah, MD & Promoter of Metropolis Healthcare
There are two good highlights of the budget for the corporate sector. Hundred percent tax emption for sovereign wealth funds for their investments in the infrastructure sector is expected to give a boost to the infra investments in India. The tax dispute settlement scheme is a positive move that has the potential for quick fund infusion into Government coffers before March-end. There are also several welcome measures to give the start-up sector a big boost. With the tax changes for the middle class, the already complex tax framework has become even more complicated. The budget did not provide much relief for the healthcare sector. The increase in overall outlay to Rs 69,000 crore, up from Rs 62,659 crore last year, is clearly inadequate considering the health challenges facing the country and the stated goal of turning India into a caring society.
K Ganesh, serial entrepreneur, partner, GrowthStory.in
Some encouraging policies have emerged in the budget for the startup ecosystem to ensure ease of doing business. While the seed-fund to support early-stage startups will motivate more entrepreneurs, the advisory cell on investment will help in tackling some existing challenges. The portal to facilitate faster clearances for businesses at a state and central level is a welcome move. It is good to see a resolution of the issue of dual taxation on ESOP shares held by employees. The tax payment has been deferred by five years, or until employees leave the company, or when they sell their shares—whichever is earlier. This needs an amendment to ensure tax deferral is applicable till the slave of the shares and not till end of employment.
Anil Rai Gupta, CMD, Havells India
The Union Budget 2020 has managed to address some key issues around infrastructure spending, electrification, affordable housing that present significant business opportunity. We particularly see this having a positive impact on the demand roadmap on the electrical and building segment players. Further the allocation of Rs 22,000 crore to power and renewable sector and 27,300 crores for development of industry and commence for year 2020-21 will accelerate growth opportunities for the electrical industry. In addition the income tax slab revisions and rural and farm sector measures will enhance consumer spending with more money in the hands of these consumers that is likely to drive greater demand for products.
Rajiv Bhalla, managing director, Barco India
Budget 2020 has been drafted around the key themes of talent, technology, entrepreneurship, and sustainability, and we applaud the Centre’s efforts at boosting the economy. The finance minister has maintained focus on tourism by announcing that iconic destinations will be connected by “corporate” trains like Tejas and with the plan to develop five archaeological sites into iconic sites. Five new smart cities have also been proposed and Barco looks forward to partnering with the government in this direction.
Sanjay Gupta, vice president and India country manager, NXP Semiconductors
We are excited to know that the government aims to make India a manufacturing destination for mobile phones, electronic components, and semiconductors; and keenly look forward to a detailed policy for the sector as it can pave the path towards making India a major semiconductor hub in the coming times. We also welcome the Budget allocation of ₹8,000 crore for quantum computing that can open up a lot of new opportunities and commercial applications in the future.
Vikramjit Singh Sahaye, founder and CEO, Hiring Plug
For startups, deferring the ESOPS tax by five years and a provision for seed funding is a vital impetus towards boosting the sentiment of small businesses and achieving India’s $5 trillion vision by 2025.
Supriya Paul, co-founder, Josh Talks
The government’s push to infuse ₹3,000 crores for skill development and mainstreaming industry-level skill training in the areas of Big Data, AI and Virtual Reality would bring the Indian skill competencies up to the league of training in countries like China and the U.S. Online degree programmes for underprivileged students would also extend the reach of formal education to the far-flung corners of the country. The direct implications of the various initiatives can be better understood once the new education policy is unveiled.
Padmaja Ruparel, founding partner, IAN Fund
We are pleased to see that the government has paid heed to our concerns and rolled out reforms like five-year tax holiday for ESOP, tax exemption for startups with turnover ₹100 crore for 10 years, reducing DDT and the establishment of a seed fund that will definitely serve to spur the startup activity in the coming years. This Budget has informed the industry of the empathy the government caters towards Indian enterprises. This positive sentiment is evident in the government’s drive to roll out “no tax harassment” policies along with the establishment of the investment clearance cell for assisting entrepreneurs in India.