Dhiraj Relli, MD and CEO, HDFC Securities

Propriety demands that not too many changes should be made in a vote on account or Interim Budget. This is all the more true when the vote on account (on February 01) will precede the unveiling of the Direct Tax code report on February 28. Tinkering with the tax rates or tax provisions before the release of the report will lead to avoidable controversies.

While some reliefs that no political party can dare to roll back (like raising exemption limit for individuals under Income Tax Act) some relief measures for rural population etc can be expected. We do not foresee any measures having substantial impact on businesses. While the speech may include a lot by way of vision statement for the next 3-5 years, its implementation will be postponed to the new government.

Shortfall in GST collections (despite customs duty revenues being better than budgeted, net indirect tax receipts till November were only 49.4% of estimates compared with 57% last year), telecom sector revenues, divestment revenues and some shortfall in direct tax receipts (going by the caution displayed by CBDT chairman recently) could upset the targeted budgeted revenues. This might happen at a time when the expenditure may overshoot budgeted numbers (including fertilizer subsidies which alone could be closer to ₹1 lakh cr vs ₹0.70 lakh cr budgeted). While some shortfall may be recouped from higher RBI dividends, a minor overshooting of fiscal deficit (easily justifiable as usual, due to unpredictable events) is likely unless severe expenditure cuts are undertaken (which does not seem likely ahead of general elections).

We do not foresee any measures having substantial impact on businesses. While the speech may include a lot by way of vision statement for the next 3-5 years, its implementation will be postponed to the new government.
Dhiraj Relli

Atleast five states may go into polls along with the Lok Sabha elections in April-May 2019. With the outcome of the recent assembly elections, rural distress has emerged as a key pressure point. Dealing with agri stress and generation of employment could be key focus areas in the budget speech. While Universal Basic income transfer is one of the options, it needs a lot of study/analysis in terms of total spend required, the current schemes that it will replace and the mode of distribution.

As per the current available data (till November 18), India's fiscal deficit has already breached the budgeted target and touched 114.8% of budgeted estimates vs 112% last year. While central government’s finances remain tight, state governments’ finances are relatively in a better position with their GFD-GDP ratio being 1.8% in H1 2018-19 vis-à-vis the budgeted target of 2.6%.

Given that serious fiscal constraints looms, the government is unlikely to go the fiscal profligacy path. While the government has the option to resort to off-budget financing of expenditure to display a healthy picture, this is just pushing the hard decisions for future. The national and regional parties need to sit together and find out a way to stick to fiscal discipline (implement laws strictly, increase compliance and desist from giveaways that damage credit discipline year-after-year) so that the future generations are spared the ill-effects thereof by way of hyperinflation and currency weakening.

Capital markets may expect little from the vote on account though the speech may give media and analysts enough to debate upon. The markets would be driven more by the macro developments across the globe hinting at the pace of slowdown, Q3 corporate results outcome and political noises, arrangements leading to shifting expectations about the post poll arithmetic.

Rikhil Shah, chief financial officer, SBI General Insurance

2018 has been an important year for the Insurance sector with multiple announcements and regulatory changes. From the merger of three PSU non-life insurers, Ayushman Bharat, changes in rules for motor insurance and inclusion of mental illness in health insurance, we’ve witnessed a lot of changes in the interest of the consumer. With the budget coming, we are positive and optimistic that it will bring more good news for the insurance sector. There might be some tax exemptions for the patrons. We’ve already seen a GST cut which was a welcome move for the insurance industry. We are hoping for positive tax benefits in the home insurance area as in the last year we have seen some major calamities and home insurance has certainly gained importance. We are also hoping for some regulatory framework in the healthcare/pharma industries to make insurance a reality for all in India. Like last year we are expecting the focus of the government to be more on the protection space for the well-being of the population.

We’ve already seen a GST cut which was a welcome move for the insurance industry.
Rikhil Shah

Bhavin Turakhia, co-founder and CEO, Zeta

The Government of India’s Digital India vision has come alive and is slowly bridging the digital divide. This has also ensured transparency and accountability in the system.  Overall, in the upcoming budget, the government should create initiatives to simplify the tax-filing process, incentivise digital transactions and formulate easier regulations to enable digital banking. In line with the government’s vision to promote digitisation in India, it is imperative for people in the lower socioeconomic strata to become a part of this revolutionary change. For example, people without a PAN number, still have to rely on paper-based Form-60 to complete the account creation process. So, I would request the government to work out a strategy to manage this digitally.

Also, in the past few decades, we haven’t seen an increase in various allowances offered to the salaried population in the country. For example, the meal allowance is only ₹50 per day; while children education allowance has a limit of just ₹100 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.

The government should create initiatives to simplify the tax-filing process, incentivise digital transactions and formulate easier regulations to enable digital banking
Bhavin Turakhia

Indroneel Dutt, chief financial officer, Cleartrip

Today, when India has achieved the position of a fast growing travel market in the world, provisions to ensure that the growth impetus does not hit any infrastructure roadblock is key. The budget should consider supporting India’s digitization journey keeping in mind all slabs including big-ticket transactions like travel.

We hope that this budget will create a roadmap for ‘One GST Rate’ on accommodation services as against four different slabs. Simplification of input credit mechanism on air and accommodation services as well as of GST return filing process will give a further boost to the sector. Further, Airline industry operates with wafer-thin margins, and TCS (Tax collection at source) leads to blockage of working capital and operational difficulties.  With the airline industry being one of the most organized and tax compliant sectors, removal of TCS should be considered strongly.

We hope that this budget will create a roadmap for ‘One GST Rate’ on accommodation services as against four different slabs.
Indroneel Dutt

Shreeraj Deshpande, principal officer and key managerial personnel, Future Generali India Insurance

The Union Budget 2019-20 holds many expectations even as India's domestic economy is going through a critical phase of growth.

Each year during the pre-budget time, the Indian healthcare industry focuses on the one statistic that refuses to change: government spending money on healthcare stays put at around 1% of the GDP. The healthcare sector can only get affordable if the government revises this upwards. The other point is that hospitals are treated on equivalence with the entertainment industry regarding charges for utilities like power consumption. Cost of medical equipment’s is another pain point which the government needs to work on.

Medical inflation is growing at 18-19% every year and the healthcare expenses of the average household can easily exceed the medical allowance limit of ₹15,000 per annum. Companies usually cap the medical allowances at the tax-free limit of ₹15,000. If this limit is revised upwards, the companies will also be encouraged to hike the allowance.

We expect the government to revise the 80 D limits for health insurance premiums under IT Act and further reduce the GST for health insurance premiums especially for retail policies.
Shreeraj Deshpande



We expect the government to revise the 80 D limits for health insurance premiums under IT Act and further reduce the GST for health insurance premiums especially for retail policies. We would also like to see if the government can make health insurance mandatory either through membership of government schemes or a policy from commercial insurer. This will help achieve a goal of universal health.

2018 saw many disasters across the world and in India. Due to the unusually high rainfall during monsoon season, Kerala witnessed the worst floods in August that killed over 400 people and many more missing. Chengannur and Thrissur were the worst hit places in the state. A total of 2,923 houses were completely damaged in the floods.

Because of such uncertainties, the government should make home insurance compulsory and incentivise home buyers by providing income tax benefits for the premium paid towards a policy. This will not only ensure protection against financial loss for customers, but also aid in deepening insurance penetration in the country.

Heena J. Akhtar, co-founder, TripXOXO

The online travel operators are experiencing a radical change in terms of growth and this is possible with the continuous government support. Our wish list from the upcoming Budget 2019 will be to lessen the tax burden, ease the regulations and create a holistic tourism infrastructure to attain an annual growth of 15-20% in the coming years. The increasing budgetary provision will certainly boost the digital and payment infrastructure for high level transaction sectors. The growing disposable income in the market is changing the pattern of consumption which will eventually generate immense potential for direct and indirect employment.

Our wish list from the upcoming Budget 2019 will be to lessen the tax burden, ease the regulations and create a holistic tourism infrastructure to attain an annual growth of 15-20% in the coming years.
Heena J. Akhtar

Shishir Baijal – chairman & MD, Knight Frank India

The real estate industry has been facing some rough weather given the tough demand environment, which got aggravated further with the recent NBFC crisis. While the industry undertakes measures to revive demand, a much-needed impetus from the Union Budget will go a long way in helping turnaround the fortunes of the sector. Considering the current set of challenges, here are a series of recommendations that we believe will help the cause of real estate sector in general and housing demand in particular.

‘Industry Status’ to real estate

Real estate is one of the major contributors to the economy supporting various ancillary industries and providing employment to millions directly and indirectly. Growth in real estate has a multiplier effect on the economy. Despite such strong fundamentals the government does not recognise real estate as an industry. It is time that real estate gets industry status. This will enable developers to raise funds at lower rates and reduce their cost of capital which would eventually have a bearing on overall project cost. The move would provide a fillip to the stress-stricken sector amid the reforms-driven new order.

GST on overall real estate: Abatement for land should be increased to 50%

The single-tax regime in India ushered in additional cost pressure on real estate. Presently real estate falls under the 18% tax bracket of the Goods and Services Tax (GST) Act with 1/3rd abatement for land taking the effective tax rate to 12%. However, in major metros, the share of land is more than 50% of the project cost. We therefore recommend that the government aligns this with market realities and accordingly increase the abatement for land to 50% thereby bringing down the effective tax rate to 9%.

While the industry undertakes measures to revive demand, a much-needed impetus from the Union Budget will go a long way in helping turnaround the fortunes of the sector.
Shishir Baijal

GST on affordable housing: Abatement for land should be increased to 50%

‘Housing for all by 2022’ is one of the pet projects of the government and it wants to deliver 10 million houses under this program. Out of 10 million, 95% are to be constructed for Economically Weaker Sections (EWS) and Low-Income Groups (LIG). As the affordability of this segment and the house value is low, the impact of the slightest upward cost pressure is magnified and becomes a deal breaker. The current GST rate of 12% coupled with 1/3rd abatement for land, making it an effective GST of 8%, is adding huge upwards pressure on the overall cost of house. We recommend lowering of the GST rates for affordable housing projects to effective 6% by enhancing the abatement for land to 50%. This shall provide a boost to the cause of housing for all by 2022.

Deduction on the principal repayment of housing loans (Section 80 C)

In the Indian context, the ownership of a house is a lifetime goal. At present, Section 80 C of the Income Tax Act does not give a singular focus on housing because of numerous competing investment alternatives. To augment the house purchase decision and provide some fillip to real estate sales, it is suggested to carve out a separate annual deduction of ₹1,50,000 for the principal repayment. Considering that in the later years of the home loan tenure, while the buyer is still paying a significant component of his income in the form of principal, he isn’t getting any tax benefit as the interest component in that period is insignificant. To address this dilemma of the home buyer, a separate deduction of ₹150,000 for principal repayment will help the cause of his house purchase for the entire loan tenure that extends to as many as 20 years.

Real Estate Investment Trust (REIT)

Despite the regulatory approval being in place for quite some time, REITs, a potent instrument of change in the real estate industry, have been held back. REITs have the potential to enhance the supply of commercial real estate – an enabler for the employment ecosystem. For unit holders, the long-term capital gains holding period for REIT units should be brought down from 3 years to 1 year (at par with equity investments). This shall make REITs more attractive for the investors.

Saurabh Gadgil, CMD, PNG Jewellers

We are hoping that the interim budget would bring an extensive change in policy for gold and, the gems and jewellery industry. We look forward to the removal of GST on job workers to protect encourage employment and also to save handcrafted jewellery business. Furthermore, elimination of commodity transaction tax (CTT) will curb dabba trading. Moreover, we are hoping that the budget will have some provisions to encourage gold investments and loans, establish bullion banks to deal exclusively with gold and silver, start gold savings and recurring deposit accounts, and easy availability of Gold Loan through bullion bank for domestic and export purpose.

We are anticipating a cut down on duty on bullion by 2% every year and to cease import of gold or gold-related items from ASEAN countries permanently.
Saurabh Gadgil

Similarly, ease availability of working capital finance for jewellers by moving this sector as a priority sector for lending. Immediate start of bullion exchange, inline of Shanghai gold exchange to keep transparency and price discovery and availability of GST set off to bullion dealers only when bullion is purchased through spot exchange. From this budget, we are anticipating a cut down on duty on bullion by 2% every year and to cease import of gold or gold-related items from ASEAN countries permanently. Also, we hope that the Government may start presumptive income tax mechanism for this industry based on turnover for the manufacturer, wholesalers, job workers, and retailers to improve transparency. We also expect exemption of income tax from interest received under gold monetization scheme and sovereign gold bond scheme.
(Gadgil is also the director and national vice president of India Bullion and Jewellers Association)

Sameer Vakil, co-founder & CEO, GlobalLinker

The government has gone the extra mile in introducing a series of initiatives to help the very important SME segment, particularly in creating greater employment opportunities; in growing India's exports; in being able to borrow more conveniently; and in their direct and indirect taxation rates. Long may this continue and I hope that the budget follows the same thread and offers greater relief to the sector. With SMEs becoming increasingly digitally adaptive, I would like the government to continue recognizing and supporting the digital lending sector. The recent announcement of loans upto ₹1 crore being approved online in 59 minutes is a step in the right direction and the sector will benefit from similar initiatives. I am expecting the Finance Minister to announce tax sops that include reduced tax rates and easing working capital blockages. GST in particular needs to be addressed and whilst the wheels have already been set in motion, I feel optimistic that a formal announcement will be made during the budget about simplifying the compliance requirements by SMEs. I also believe that the sector will benefit tremendously with the introduction of incentives and subsidies.

I am expecting the Finance Minister to announce tax sops that include reduced tax rates and easing working capital blockages.
Sameer Vakil

Amol Arora, vice chairman & MD - Shemford Group of Futuristic Schools

For any country, the most significant returns are those garnered from investments made in its children. The next generation is going to enter a globalized world and will be competing for jobs not just against other students but also innovative technologies that are quickly replacing human jobs. In order to keep our children in the competition, we need to ramp up our Ed-Tech sector in the years to come. To that end, Budget 2019 should give certain tax breaks to Ed-Tech startups to enable them to reach sustainable levels. The government should also grant financial incentives for organizations setting up educational institutes in rural and underserved areas. Currently, the private sector in education is viewed with distrust which is why concrete steps should be taken to show that public-private partnerships can be a win-win for all – delivering quality without fleecing the parents. The government has made significant strides in the direction of technology-enabled learning with the launch of SWAYAM, which offers free online courses by teachers from reputable institutions. Another notable achievement was giving more autonomy to institutions of higher education. The Prime Minister Research Fellows (PMRF) program has helped meritorious students tremendously. However, the promise to boost education expenditure to 6% of GDP is still a distant dream and quality of education in schools and colleges is still a worry. Most importantly, the implementation of policies & programs still remains a key challenge. We hope to see more from the government this year for this most vital sector of the economy.

Budget 2019 should give certain tax breaks to Ed-Tech startups to enable them to reach sustainable levels.
Amol Arora

Mahesh Balasubramanian, MD and CEO, Kotak General Insurance

The Hon'ble Finance Minister took some significant steps in the last union budget with respect to revising deduction limits on health insurance policies and allowing flexibility in claiming deductions for multi-year policies. This I am sure, has greatly benefited the consumer. On the back of such initiatives, Health insurance is likely to grow at around 25%, higher than the general insurance industry which will around 15-17%.

Increasing insurance penetration is very important for the country since insurance guards against losses arising out of eventualities and has a direct impact on the country’s GDP. Lowering the GST rate for insurance products will make it more affordable for customers and aid in increasing penetration. Lowering the GST from the current rate of 18% to 5% will greatly benefit the industry and consumers. Also, today the investment returns on both shares and securities for general insurance companies are treated as business income and hence taxed at the corporate tax rates which are between 25-30%.  If this can be brought on par with Life Insurance companies where the applicable rate is 12.5% or treat the same as capital gains and tax it at the rates applicable for short team or long-term capital gains as the case may be, it will be a significant boost for the industry.

Lowering the GST rate for insurance products will make it more affordable for customers and aid in increasing penetration.
Mahesh Balasubramanian

Rituparna Chakraborty, Co-founder and EVP, TeamLease Services

Apart from increasing investment in education, the government should lay down policies that will support the employment and employability ecosystem. One of the areas that needs attention is the GST levied on third party services rendered to educational institutions. The GST levied on third party services should be brought down. Further, the GST levied on staffing industry also needs to be re-looked. The other area the budget should consider are investing and extending the digitisation drive to education sector. While Maternity Benefit (Amendment) Act is indeed a good move, it creates financial strain on corporates, hence the government should come forward and share the financial burden. Further, from an ease of doing business point of view, the government should  look at adopting PAN number as the UEN (Unique Enterprise Number). They should also allow the filing of Single Online Return for multiple labour acts through a single window. It will not only help companies to adhere to the compliance requirements but also will enable various government entities to monitor better. Lastly but most importantly, in this budget the government should make provisions for employees to decide the amount and platforms that they would want to invest their social security funds in as well.”

One of the areas that needs attention is the GST levied on third party services rendered to educational institutions. The GST levied on third party services should be brought down. Further, the GST levied on staffing industry also needs to be re-looked.
Rituparna Chakraborty

Sambhav Rakyan, head of talent and rewards consulting, India at Willis Towers Watson

Companies in India expect use of automation in the workplace to increase from 14% to 27% in the next three years which is higher than the global average. Giving this background, there is no doubt that focussing on skilling and employment should be one of the top priorities for the FM in the upcoming budget. Apart from labour reforms, the finance minister (FM) should consider innovative provisions to strengthen the skilling ecosystem and one way could be by providing greater incentive for employers who make skilling a priority. All key stakeholders including the HRD Ministry, industry bodies and corporate India should think through the challenges and opportunities presented by the future of work, ensuring that India’s demographic dividend combines with technology enabled skilling, upskilling and reskilling programmes to create employment opportunities and deliver strong profitable growth. I also think the FM should consider providing some relief to the salaried class by increasing the income tax exemption threshold from ₹1.5 lakh currently and reinstating the tax-free status for medical expenses and transport allowance.

FM should consider providing some relief to the salaried class by increasing the income tax exemption threshold from ₹1.5 lakh currently and reinstating the tax-free status for medical expenses and transport allowance.
Sambhav Rakyan

Vineet Chaturvedi, co-founder, Edureka

‘Skilling' and 'continuous learning' have become sufficiently important requirements in today's competitive professional landscape so much so that even the Indian Govt. has taken note of it and launched skill development initiatives. What could accelerate India's skill development story even further and provide fodder to corporate growth is a 'skilling allowance' for all tax paying individuals. Such a rebate that rewards continuous learning will go a long way in creating an industry relevant workforce that can make India a skill hot spot. Continuous learning is a necessity and not just an option anymore and by treating it on par with necessary allowances such as HRA, LTA, DA & others, GOI would be doing India a great service. After all, India's biggest strength is its human resource. Such an allowance will also be beneficial to IT, ITes industries which are subject to frequent skill churn and the ed-tech industry which has been working towards addressing this skilling need on ground.

Speaking specifically of the ed-tech industry, a reduction in GST would greatly help boost a culture of up-skilling among Indians and this is indeed the need of the hour for India to maintain an edge in technical skills. Education and up-skilling is no luxury and it should not be taxed as such. It's said that India lags behind even Sudan when it comes to its investments in education and healthcare mapped as a measurement of its commitment to economic growth, according to Institute for Health Metrics and Evaluation. It's time to change that.

What could accelerate India’s skill development story even further and provide fodder to corporate growth is a ‘skilling allowance’ for all tax paying individuals.
Vineet Chaturvedi

Madhusudhan G, chairman and managing director, Sumadhura Group

While there are numerous expectations from the upcoming interim Budget 2019, there a few which we as an industry hope sees the light of day. Firstly, a rationalization of GST in real estate can help create a conducive business environment. Secondly, granting of infrastructure status to the entire sector along the lines of what was done for Affordable housing is another step we hope is taken. Last but not the least, an effective and structured implementation of single window clearance by central and various state governments would contribute significantly to streamline the process within the real estate industry.

A rationalization of GST in real estate can help create a conducive business environment
Madhusudhan G

Prasun Sikdar, managing director and CEO, Cigna TTK Health Insurance Company

Health insurance sector in India needs immediate attention, as healthcare continues to remain one of the most demanding subject in the country. There is an absolute need to spread awareness about health insurance amongst the population, considering the rising healthcare cost in the country. To promote health insurance in the country, enhancing the tax rebate limit under Section 80D from the current value of ₹25,000 can be a great booster, further a waive off GST charges on insurance premium which are currently 18 percent can help increase insurance penetration in the country. To make healthcare in India more accessible new digital payment methods can be extended to consumers, this will certainly make health insurance payment process more convenient.

To promote health insurance in the country, enhancing the tax rebate limit under Section 80D from the current value of ₹25,000 can be a great booster.
Prasun Sikdar

Rajesh Mittal, managing director, Greenply Industries Limited


Continuing with the thrust on make in India the government should also incentivise capacity expansion in existing industries which can go a long way in boosting capital investment and generating employment. Similarly, in the Middle-East, plywood is the second most imported item but Indian players are not able to compete with China, Vietnam in this market. Incentivising plywood exports can go a long way in establishing a much needed export market for Indian plywood. Most of our dealers are partnership firms with a tax rate of 30% whereas corporate tax for companies with turnover of upto 250 crores is 25% only this anomaly needs to be corrected and will benefit a majority of plywood dealers and go a long way in making the sector more organised. The reduction of GST from 28% to 18% has been a great booster.

Incentivising plywood exports can go a long way in establishing a much needed export market for Indian plywood.
Rajesh Mittal

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