India Inc. hails ‘populist’ Budget, but says disappointed on tax front

Arun Jaitley
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New Delhi–India Inc on Thursday welcomed the Union Budget 2018-19 — the last full budget of Finance Minister Arun Jaitley before the 2019 general elections — and praised the populist approach of focussing on infrastructure and rural India.

However, what came as disappointment for the industry was that the government did not provide any relief in the income tax rates for 2018-19, along with the imposition of long-term capital gains (LTCG) tax on equities exceeding Rs 1 lakh at 10 per cent.

Here is what the industry players have to say:

Sandeep Jajodia, President, Assocham: “Finance Minister Arun Jaitley has placed a huge emphasis on agriculture and rural India, allocating bulk of resources to interior landscape, while helping the middle class, salaried employees along with relief to senior citizens, measures which would boost consumer demand and help revive economic growth.”

Chanda Kochhar, MD and CEO, ICICI Bank: “The wide-ranging measures announced for various segments of the rural economy will boost income levels and create gainful and sustainable employment. This, in turn, will help increase consumption levels in the economy.”

Arun Jaitley

Anshuman Magazine, Chairman, India and South East Asia, CBRE: “It is fair to say that this year’s budget is populist, focusing on providing social security at the grass-roots level. The various announcements and funding provided are towards promoting further growth of small-scale industries as well as improving infrastructure, particularly across rural India.”

Neeru Ahuja, Partner, Deloitte India: “On the taxation side, industry and individuals are a little disappointed that no significant tax relief has been provided in spite of increased compliance by taxpayers. Even the standard deduction given is in lieu of two other deductions that have been taken away.”

K. Suresh, President, Association of National Exchanges Members of India: “While the tax (LTCG) will adversely affect serious investors funding the India Growth story, it won’t have any impact on short-term traders. Instead of introducing LTCG in its current form, the government could have done better by changing the tenure of this tax or given the corresponding benefit by re-introducing 88E to take the deduction of STT (Securities Transaction Tax)”

Joy Rankothge, Vice President, Credit Strategy, Moody’s Investors Service: “The direction of the fiscal deficit announced in the Budget is in line with our forecasts. The government continues to aim for a gradual narrowing of the central government deficit to 3.5 per cent and 3.3 per cent in fiscal 2018 and 2019. We expect that the fiscal deficit targets will be broadly achieved.

“This year’s divestments exceeding targets marks a break in a recent trend of missing ambitious targets. Moving forward, increased divestments could contribute to higher government revenues, greater efficiencies within state-owned enterprises and help reduce the government’s high debt burden.”

Manish Agarwal, Partner and Leader-Infrastructure, PwC India: “Rs 50 lakh crore for infrastructure is welcome as it reaffirms continued funding of various initiatives in roads, railways and urban infrastructure. Quantum leap in airport capacity is a key requirement to keep pace with the rapid growth in aviation.

“Other initiatives, outside the Budget, to revive private sector play in these sectors, will complement and further the impact of the Budget allocations.”

Ashishkumar Chauhan, MD and CEO, BSE: “Overall, this is a positive budget, with continued focus on fiscal prudence, boosting the manufacturing sector, augmenting MSME’s, improving healthcare and skill development. Impetus to GIFT City IFSC, Gold Exchanges, Disinvestment, ETF’s for debt financing and measures to reviving corporate bond markets augers well for the capital markets.”

Subho Ray, President, Internet and Mobile Association of India: “For the second year in running, the Union Budget recognises the importance of digital services and gives a direction. It is now up to the relevant departments to act on these directions and help realise the targets envisaged in Budget 2018.”

Nilaya Varma, Partner and Head, Government and Healthcare, KPMG in India: “The Union Budget 2018-19 focuses on an integrated social reform agenda. Proposals on agriculture, gender, rural infrastructure, when implemented, can help bridge the income and gender divides. While people can have views on the long-term implications of demonetisation, the 12.6 per cent increase in direct tax collection along with 85 lakh new taxpayers is a good sign and can help widen the direct tax base.”

C.P. Gurnani, Managing Director and CEO, Tech Mahindra: “Budget 2018 is overall positive and ‘common man-centric’ with clear boost to rural, health and insurance sectors. Specific to the information technology industry, the steps taken to strengthen the presence of Fintech in the MSME space and the plans for Smart Cities such as Smart City Command Centres, Smart Roads and Solar Power shows that we are on our way to achieving our goal of being a trillion-dollar digital economy by 2025.”

Ramesh Mamgain, Area Vice President, India and Saarc Region, Commvault: “Doubling allocations towards Digital India and enhancing the National Mission on Cyberspace Security sets the tone to protect the data of India Inc and its citizens. Unique IDs for companies will definitely go a long way in contributing towards interest of the nation and increasing transparency by corporates.”

Gopal Srinivasan, Chairman, Indian Private Equity and Venture Capital Association (IVCA): “We welcome the decision towards parity on long-term capital gains (LTCG) between listed and unlisted stocks. The 10 per cent rate is a first step. We hope that eventually, risk taking, long term capital invested in unlisted companies will ultimately be taxed at the same rates as public market equity.”

Sunil Duggal, CEO, Dabur India: “Overall, the Union Budget 2017-18 is on expected lines and is focused on improving the quality of life in rural India. The Budgetary allocation for cultivation of specialised medicinal and aromatic plants is another big positive and will help promote India’s ayurvedic heritage.”

Arun Gupta, CEO and Founder of MoMagic Technologies: “This budget has recognised the importance of artificial intelligence, machine learning and robotics as tools to further growth at national level. NITI Aayog’s plan to establish a national programme to direct efforts in artificial intelligence is a welcome move which will push investments and research in this space and will put India on the right path for tech innovation.”

Gautam Kalani, Director Corporate Finance, Lotus Greens India: “There are indirect benefits through major announcement in infrastructure but it lacks any direct benefit for the real estate vertical. Once again, major disappointment was the non-granting of the industry status to the sector.”

Harsh Pati Singhania, Director, JK Organisation: “The Finance Minister has also duly addressed the current job situation in the country. Besides extending the fixed-term contract hiring to all sectors, the government will also contribute 12 per cent of the wages of the new employees in the Employees Provident Fund for all the sectors for the next three years.”

Vivek Nirmal, Joint Managing Director & CEO, Prabhat Dairy: “We are glad at the government’s proposal for funds allocation which would help dairy farmers involved in animal husbandry. This move is a boost to dairy farmers as it will further enhance the yield from animals, quality milk and hence, more income for farmers.”

Anand Kandadai, Executive Vice President, Cleartrip: “The Budget does seem to have some promising measures and provisions for the Indian tourism and hospitality industry that has emerged as one of the key drivers of growth. It is heartening to see the government backing up the ambitious UDAN plan with budgetary provisions for airports. What is noteworthy is that the thought process has been comprehensive, and in addition to connectivity there is a separate mention of expanding airport capacity by five times, which is a pressing problem, for many congested airports of the country. (IANS)



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