As finance minister Nirmala Sitharaman presents her maiden Budget on July 5, the expectations from all quarters are going to be high. Here is what India Inc. expects from the Narendra Modi government’s first Budget of its second term in office.

Rajiv Sabharwal, MD and CEO, Tata Capital

Non-banking finance companies play an important role in nation building and drive economic growth. The recent measures introduced by the Reserve Bank of India pertaining to asset quality, asset liability management and solvency augurs well for the sector. To support financial stability and growth, the budget should focus on a robust and accessible system for fund flow especially to well- performing NBFCs with an established track record.

Banks should be allowed to extend Term funding against the on-lending and re-finance of agricultural and affordable housing originated by NBFCs and HFCs. Such exposures should be considered eligible under the Priority Sector Lending guidelines which should be over and above the LE norms with limit specifications.

Thomas John Muthoot, CMD, Muthoot Pappachan Group

The challenge in front of the Central government will be to lift the GDP growth which is now projected at 6.6% for FY2019-20. The key sectors of agricultural and manufacturing have contracted, the global environment looks fragile from both emerging political and economic factors.

A lot of hope is residing on this budget given the dismal shadow cast on the NBFC sector. We are expecting significant measures towards incentivisation, consolidation and sustainability, as that will give some impetus to spending in the domestic economy. Rural economy, particularly the agricultural sector, needs comprehensive measure like higher allocation for Kisan Samman Nidhi along with sustainable employment opportunities. There is a need to drive growth by enhancing private consumption through measures like policy rate cuts and direct tax sops. We are looking forward to measures ensuring that policy rate cuts benefits are passed on to NBFCs and end-consumers. There has to be transparent, structured and process driven framework for NBFCs to be able to access credit from banks.

Bhavin Turakhia, CEO, Zeta & Flock

For the upcoming budget, two key areas to focus on are – technology and India’s salaried population.

India’s online economy has made significant strides, shifting from a largely ‘cash on delivery’ model to now clocking a massive number of online digital transaction. In the upcoming budget, an increased focus on giving better sops to build an infrastructure that can continue to empower individuals digitally will further boost our economy. Also, with technological disruption being key for startups’ growth today, we would urge the government to encourage investments in technology hubs that will help strengthen technologies such as AI, ML etc. The government must also work towards bringing in some respite to GST, by reducing the tax slab for technology services and products, encouraging the early adopter market to flourish.

For salaried employees, in the past few decades, we haven’t witnessed any increase in several allowances that are offered. For instance, the meal allowance is only ₹50 per day; while children education allowance has a limit of just ₹100 per month and the driver salary limit is only ₹900 per month. It would be of great benefit for the salaried people employees if the Union Budget 2019 considers increasing the limit of such employee tax benefits.

Rajesh Sharma, managing director, Capri Global Capital

The new government is expected to come up with some strong reforms to overcome the liquidity crunch faced by NBFCs. A dedicated liquidity window for the continuous credit supply would help the sector to regain normalcy. NBFC are the actual bridge between the priority sectors and are major enablers of credit inclusion. Thus benefits of tax exemptions like non-applicability of TDS on interest portion and shelter on taxability of interest on NPAs/ sticky loans would be an added advantage. Further, simplification of GST and relaxation to other reforms would contribute towards ease of doing business.

Tarun Mehta, CEO and co-founder, Ather Energy

As a manufacturer, we would like the centre to review the current taxation framework applicable on raw material and the final product. There is an inherent inverted duty structure as the GST input on raw material and other overheads are on average of 18% wherein the output is pegged at 12%. The proposed reduction of the GST on EVs to 5% will increase this delta. This structure results in significant working capital blockage. Even with the existing GST inverted duty refund framework in place, there is working capital blockage on the overheads and capital investments. A comprehensive GST refund structure of electric vehicle manufacturers or a reduced GST liability on the raw material should be assessed for seamless cash flows in the long run.

Kamal Nandi, business head and executive vice president – Godrej Appliances and president – CEAMA

The consumer electronics and appliance industry has witnessed low to no growth in the last three years. The penetration level for durables has traditionally been low in India and despite more than five decades, it stands at as low as 30% for refrigerators (92% in China), 13% for washing machines (88% in China) and 60% for televisions (95% in China). Revival of growth, therefore, is the biggest ask that industry has from the government.

As an industry, we expect the government to reduce the customs duty on open cells from 5% to 0%, as presently there is no ecosystem for local manufacturing of Open Cell in the country. In fact CEAMA has submitted a plan for phased manufacturing of TVs and its sub-parts to the government in 2018 to encourage local and end-to-end manufacturing of televisions in the country. Expedition in implementation of the phase manufacturing programme (PMP) is the need of the hour. We, also recommend implementing a PMP for components of air conditioners as many of these key inputs – especially compressors – are mostly imported. Therefore, there is a significant need to promote indigenisation of AC’s in the country. It will give a positive signal to potential investors as well as help in aiding the ‘Make in India’ initiative.

Surendra Hiranandani, founder and director, House of Hiranandani

We hope for measures that will enhance the overall economy instead of specific sectors. Also, the announcements must be backed by concrete plans to ensure that the benefits are percolated to the consumers. From a real estate standpoint, the last year was largely spent getting acclimatised to the new policies which ushered better transparency and accountability in the sector.

The Indian real estate sector is the most highly taxed with the combination of high direct and indirect taxes, stamp duties and levies for development approvals. These extraordinarily high taxes coupled with high interest rates have been crippling growth. To bring back growth in the sector which is so vital to any developing economy, we expect the government to impart industry status to the sector which would enable developers to cut capital costs and pass on the benefits to consumers. The government should speed up its measures for infrastructure development which will ensure cheaper land for housing and push affordability.

Avneet Singh Marwah, director and CEO, Super Plastronics

Taxation (Custom Duty, GST and Make in India)

As a part of the television manufacturing industry, we request the finance minister to reduce the GST to 18% on all the TV panels as 28% is the highest tax charged on televisions in the world.

Additionally, there has been more than ₹2500 crore worth of import of TVs in the past UNDER FTA (Free Trade Agreement) under zero percent duty. This doesn’t favor the companies who support Make in India Campaign of the government. This agreement must be cancelled or it should be confined to import of selective goods.


The government should lay more focus on building express corridors to connect Tier 1 cities with Tier 2 and Tier 3 cities. This will help many companies in reaching out to these cities without any hassle.

Harish Sheth, CMD, Setco Automotive

As the Medium & Heavy Commercial Vehicle (MHCV) & farm industry has witnessed a hard time recently – For MHCV it would be in the best interest for the government to pull forward the implementation of the vehicle scrappage policy over 10 years in age. This will immediately spur growth and improve logistic efficiencies due to advanced technology. Over and above, bringing more liquidity into financial services is critical for further spurring all around growth.

From a farm sector standpoint, we need strong reforms to ensure sustainable growth such as easier credit and insurance; relook at the land ceiling act. We are hoping the budget would start stimulating growth now that the elections are over and a stable government with a good mandate is in place. Lastly, irrigation and groundwater management need to be audited and implemented with a standard operating process to avoid leakages and cause overall harm to the farm sector thus affecting the industry.

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