Industry Leaders Reaction on Budget 2019: Adi Godrej says Budget is not growth-oriented; stock market comes down considerably

  • The first Union Budget by the Modi 2.0 government has introduced several benefits for the MSME sector

  • The Budget is not very different from the interim budget even as market participants await fiscal deficit proposals

  • The global demographic trends clearly indicate that major economies will have a skilled labour shortage

Prime Minister Narendra Modi’s government unveiled the Budget for 2019/2020 on Friday, seeking to reverse weakening growth and investment that threaten to take the shine off a recent landslide election victory.

Finance Minister Nirmala Sitharaman, presenting the annual budget statement to parliament, said the government planned structural reforms to kickstart foreign and domestic investment.

Adi Godrej, chairman of the Godrej Group said he does not think the Budget is growth- oriented. "The stock market has also come down considerably", he said.

Ajay Piramal, Chairman, Piramal Group

The Union Budget 2019 is marked with a long-term 10-year vision while retaining focus on immediate priorities. The government’s roadmap to position the economy for future sustainable growth will resonate with both domestic and international stakeholders. India now approaching the global markets to raise sovereign debt, indicates the country’s readiness to be sized amongst the best in the world. This is a huge vote of confidence in the economy and its trajectory. The focused impetus for sustainable job creation via targeted investment in infrastructure projects and other productive sectors of the economy will have a cascading effect on secondary and tertiary employment. The mission to provide housing for all by 2022 has the potential not just for growth in downstream sectors such as cement and steel but also for overall job creation in these crucial industries.

We are happy to see the government signal its confidence for a well-financed, robust NBFC sector through the one-time six-month partial credit guarantee. This development would be an important milestone for the NBFC sector that is crucial for the sustained growth of the economy. We welcome the regulations and norms that have been proposed by the Finance Minister on the NBFC sector that would raise transparency and reinstate trust in this vital sector. The detailed plan of action provided in this budget to address long-standing issues like a deeper debt market by invoking higher foreign participation will certainly help in lowering the real borrowing costs of India Inc. and help revive the momentum in private investment.

Anand Kripalu, Managing Director and CEO, Diageo India

A balanced budget that draws from a long-term vision for the country. Through policy reforms to rejuvenate investment, ‘Make in India’ and Ease of Doing Business, as well as measures to tackle the country’s water shortage and climate change, the budget lives up to the government’s vison of a New India that aims at inclusive growth. The acknowledgement of India Inc’s role as the nation’s job and wealth creators is heartening. Operating with the high standards of compliance, in a sector that is in urgent need of regulatory reform, we are delighted at the Government’s Vision of ‘Minimum Government Maximum Governance’, which we hope the Centre will encourage States to adopt towards the alcoholic beverages sector.

Vishal Suri, Managing Director, SOTC Travel

The travel and tourism industry is a vital contributor to the country’s growth.  The proposal statements made by the Finance Minister in the Union Budget will provide impetus to the tourism sector. As India is poised to become the 3rd largest domestic aviation market, the Budget has focused on reviving the concerned sector by opening FDI doors. Liberalisation of FDI will attract investments from foreign players, which will revive the current cash-strapped aviation sector, thereby stabilising the aviation industry, which will in turn lead to incremental benefits for the tourism industry. India has a rich heritage of natural beauty which remains untapped and unexplored on account of their remote locations. Impetus to projects such as Incredible India, UDAN, new initiatives to promote our heritage destinations, better road connectivity, focus on developing 17 iconic tourism sites, and budgetary allocation of Rs 100 lakh crore for infrastructure development will help catalyze strong domestic tourism the under RBI umbrella. Hopefully, with greater financial integration, flow of money to the economy would ease.

Suvodeep Rakshit, senior economist, Kotak Institutional Equities

The government has the primary focus on infrastructure building. However, we need to see what the cost and budgeting of the same will be.

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 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.

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.

Gaurav Anand, Co-founder and Director, Namaste Credit

This is definitely a pro-business and pro-MSME budget. The interest subvention for all GST-registered MSMEs seeking new or incremental loans is a very considerate and welcome step. It will not only incentivise informal businesses to embrace the GST regime, but also ease and enhance the credit flow to eligible businesses. Most of all, I deeply appreciate the proposal to open a payments portal for MSMEs that will channelise a greater flow of investments in the sector. We do hope the government leverages relevant support from the fintech sector with proven capabilities in the digital lending space. If executed well, this plan can give a significant boost in improving the overall financial health of MSMEs and the fiscal health of India.

Dilip Asbe, MD & CEO, National Payments Corporation of India (NPCI)

The Budget confirms the government’s continuous focus on digital payments and will aid to create a robust payment infrastructure in the country. Adoption of RuPay National Common Mobility card (NCMC) shall trigger the consumer behaviour change for all the transit use cases. The budget facilitates the transformation of the Indian economy from Cash driven to less-cash. We believe, with all the efforts from the government and RBI, India could emerge as the world leader and innovation hub for digital payments in next five years.

Sachin Menon, Partner and Head, Indirect Tax, KPMG in India

The current budget proposals seem to reiterate steps to simplify the GST compliance recommended by the GST council by introducing single return, automated refund mechanism, centralized e-invoicing, the abolition of e-waybills etc. with an eye to improving compliance and revenue buoyancy. On the customs side, it seems the reduction and increases in customs duty on raw materials and capital goods are principally aimed at encouraging the “Make in India” initiative. The announcement of legacy dispute resolution scheme will give an opportunity to the taxpayers to settle legacy litigations related to service tax and excise duty.

Anita Rastogi, Partner, Indirect Taxes, PwC India

 The key theme has been to ease of doing business as far as GST is concerned. The proposals include single monthly returns, free accounting software for small businesses, fully automated refund mechanism etc. The focus on GST has also been on technology where E invoicing will be rolled out from January 2020. In customs the main theme has been Make in India and less imports. This meant that customs duty on many raw materials have been reduced so that goods are manufactured in India. On the other side customs duties on final products have been hiked to reduce imports. Electric vehicles are getting a big boost which means that environment concerns have been considered. Also dispute resolution for the legacy matters of excise and service tax is a welcome step.

Gaurav Chadha, Tax Partner, Ernst & Young

The numerous amendments proposed by the Finance Minister in the Finance Bill 2019 and tax policy road map provided in the Budget speech confirms government’s agenda of providing conducive environment to startups and raising India’s ranking in ease of doing business index. Eligible startups can now carry forward of losses where shareholders beneficially continue to hold 51 percent shareholding or voting power. The period for investment of capital gains tax in eligible startups extended from 31 March 2019 to 31 March 2021, also now only 25 percent investment in shareholding is sufficient to claim exemption. Startups are likely to get relief in ongoing tax audits. As for carrying enquiry or verification, now the tax officer is required to obtain approval from supervisory officer. For providing relief from angel tax, identity of investor and source of investment in eligible startups will be resolved by e-verification mechanism.

Abhishek Bansal, Co-Founder, CEO, Shadowfax - a B2B last mile delivery services platform

As Finance Minister Nirmala Sitharaman promised, the new Budget proposal surely gives us hope for a new and better India. Eradication of Angel tax has assured that the funds raised by starts ups will not require scrutiny by the tax department. Also, special measures should be taken by the tax department for pending scrutiny of startups. Introduction of exclusive start-ups TV programs on Doordarshan is a big boost to the sector industry and investors.

Vinay Singhal, Co-Founder & CEO, WittyFeed - content creator in the digital media space

We are welcoming the new initiative wherein the startups and investors filing returns will not be subject to the scrutiny for angel tax. Angel Tax has emerged as one of the key issues faced by the Indian startup ecosystem. A lot more though regarding the same needs to be addressed by the government to boost angel investments in the country. The Minister also stated that special administrative arrangements will be made by the Central Board of Direct Taxes (CBDT) for pending assessments of startups and redressal of their grievances. This vital step will help startups ecosystems of the nation.

Vinay Agrrawal, Founder & CEO, Hubbler

The abolishment of angel tax, one of the key concerns of the startup sector is a great step taken by the government to boost the economy. Further, the introduction of the e-verification mechanism will exempt startups from any kind of tax scrutiny. Also, the minister stated that special administrative arrangements by CBDT for all the pending assessments of start-ups to rectify their problems will boost the start-up's ecosystem of the country. The government’s efforts to improve the skill of youth with innovation like AI, IoT, and Robotics, etc is very commendable. This will reduce the skill shortage among the workforce especially by the technology and IT companies. We really hope the proposed initiative of starting a TV program in DD for start-ups will bring in a positive change in the start-up sector.

Gautam Seshadri, Head of Strategy, Blowhorn, an intra-city logistics provider

The conscious effort towards strengthening the electric vehicles ecosystem by the Modi Government 2.0 in its first Budget presentation is a welcome move. Promoting and helping build the infrastructure is the need of the hour for India to realise its vision of '30 percent EV mobility by 2030'. Further, incentivising EVs and batteries will prove to be beneficial for both commercial and private EV owners. A reduction of GST on EVs from 12 percent to 5 percent is again a positive move. This is undoubtedly a pro-EV budget and will not only drive the adoption and manufacturing prowess of EVs but also contribute to the realisation of the Government's Smart Cities project. The mobility sector is expected to gain considerable momentum if the proposed schemes are actioned.

Ravi Shankar Pooli, Managing Director, Smartiply India Pvt Ltd

It’s heartening to see the Government’s renewed focus on creating an enabling environment for startups. By 2024, the government promises to help set up 50,000 new startups, 500 new incubators and 100 innovation zones in urban local bodies. The FM announced several measures that can address issues that startups in India are grappling with. Startups in India have held their fort and are delivering on some of the social benefits which were earlier the preserve of large corporates. A wave of new employment being generated is a much-needed relief considering the tight employment situation in the country.  The Finance Minister announced today that the government will focus on imparting new-age skills in areas like Artificial Intelligence, Internet of Things, big data, 3-D printing, virtual reality and robotics to the youth in the country. This will help startups and the youth to be trained,  the spin off benefits accrue to the entire country as this accelerates commercialisation and adoption of newer technologies.

Vasanth Kamath, Co-founder, Smallcase Technologies

Finance Minister Nirmala Sitharaman's proposal to include the Bharat-22 & CPSE ETFs towards 80C tax-deduction is a great step forward that will now provide retail investors with an inexpensive way to save on taxes. ETFs are a cost-effective way to get diversified equity exposure, and we hope that this ELSS variation is soon extended to all ETFs.

Satya Kalyan Yerramsetti, Founder & CEO, Telebu Communications

The Union Budget has made adequate allocations for the telecom sector whose revenues have been tumbling since quite a while now. The government has set up a committee to rationalize tax structure, review USOF, and the spectrum usage charges, which will make the business environment more conducive within the sector. These measures will work in the favour of unified communications providers like us. It has also taken targeted steps towards rural infrastructure expansion and introduced PPP model for BharatNet to eliminate the prevailing rural digital divide.

Rahul Sharma, Managing Director-India, LogMeIn, SaS provider

The Union Budget is a step in the right direction and strengthening the ICT infrastructure and the digital penetration in rural geographies. The Finance Minister has introduced the PPP model for BharatNet and has set up a committee to rationalize tax structure, review USOF, and the spectrum usage charges. This will considerably improve the industry dynamics as revenues continue to fade in the market. The Honourable Minister has further proposed several schemes to build skills, infrastructure, and conduct R&D around cutting-edge technologies including Artificial Intelligence and Big Data, which is another key takeaway.

Aakrit Vaish, Co-founder and CEO, Haptik, AI chatbox firm

The demand for specialised skillsets in niche technologies like Artificial Intelligence and Machine Learning has increased drastically. The government has recognized and addressed this schism by pledging to train 10 million youth in industry relevant skills like AI, IoT and Big Data.

KV Srinivasan, CEO, Profectus Capital

The Budget has clearly recognised the critical role played by NBFCs. The measures announced are surely welcome at a stage when NBFCs have been facing liquidity headwinds, though the demand for a long term refinance mechanism has not yet been addressed. The first loss guarantee on Rs 1 trillion of pooled assets securitisation is a very good confidence building measure. Removal of debenture redemption reserve on public bonds issued by NBFCs as well as removal of Section 43D related to taxation of income on NPA will bring down the cost of operations. Opening up of TReDS to all NBFCs is a huge opportunity for the NBFCs which should channelise significant amount of working capital to the MSME sector. The interest subvention scheme for MSMEs will certainly boost additional loan disbursement to them, giving a further business opportunity to NBFCs.

Sabyasachi Mitter, Founder and MD, Fulcro, digital marketing and communication agency

This Budget is focused on all-round growth of the economy, rapid growth in infrastructure and generating employment by encouraging entrepreneurship. I particularly welcome the focus on startups especially addressing the waxing issue of angel tax as well as further incentives for women entrepreneurs. The increase of turnover of companies who can avail of 25% tax slab to 400 crores would lead to further capital in the hands of businesses to invest in growth. The focus on electric mobility for both manufacturers as well as consumers as well as incentives for components that are critical for electrification of commuting is especially heartening. Reducing our oil import bill through such measures would have a compounding effect on the economy. The allocation of hundred lakh crores for infrastructure is most welcome and long overdue if we have to have a realistic chance of being a $5 trillion economy.

Akshay Hegde, Co-founder & MD, ShakeDeal, B2B e-commerce marketplace

The Union Budget has ticked some of the right boxes for creating a supportive ecosystem for start-ups and entrepreneurs. The creation of payment platform for MSMEs for filing of bills and payments is a step in the right direction. The credit boost to MSMEs through 350 crore interest subvention and 2 percent interest subvention for GST-registered MSME on the fresh or incremental loan will help businesses and spur the waning economy. Also, a start-up channel on Doordarshan will help budding entrepreneurs to shape their ideas and guide them about complex issues of compliance and taxation. The proposal to discourage business payments in cash and levy 2 percent TDS on cash withdrawal exceeding Rs 1 crore in a year from a bank account will bring in tax compliance and also increase revenues for the government. Filing of single monthly GST return will provide a big relief for MSMEs on the compliance front. Start-ups and investors who file declarations will not be subjected to scrutiny in valuation - this is a positive development that will encourage angel and private equity investment.

Anil Talreja, Partner, Deloitte India

A special mention for the fisheries sector—a robust fisheries management system to formulate, monitor and maintain quality control is a very good move to provide fuel to the fisheries sector and the people working in and around this sector. The fisherman should have an agency to approach which will improve his income levels give him sustainability and assurance of growth. The proposal will enable the fisherman to have access and to be a part of the process of development of the sector. This will also bring about a sense of belongingness to the fisherman towards growing the sector. This will also inculcate a higher level of entrepreneurship among the people involved in the sector.

Deepak Jasani, Head, Retail Research, HDFC Securities

The Budget is not very different from the interim Budget even as market participants await fiscal deficit proposals. Trade will be fluctuating. Until the fiscal deficit proposals are heard, one should not jump to conclusions.

Saurabh Garg, Co-Founder and CBO, NoBroker.com

The introduction of modern tenancy law is a much-needed step in the Indian residential real estate sector. The need for such a reform is immediate, as the current mandate in most state-enacted rent control laws de-incentivise landlords from renting out their flats. The eviction process is also extremely long and cumbersome for homeowners. To bolster rental housing, the government should look to lower the cost of ownership and introduce measures to improve rental yields from the current 2-4 percent. Additional levies such as stamp duty and registration should be brought within the ambit of GST, while the GST slab for under-construction properties should also be reduced to bring down the overall cost of ownership for investors. Increasing the limit for principal repayment under 80C from the current Rs 1.5 lakh will also provide a big boost to the government’s mission to provide ‘Housing for All’ by 2022.

Self-employed professionals must also be incentivised to take up rental housing to stimulate activity in the real estate space. While the salaried class can claim income tax deductions on HRA, those who are self-employed or draw a lump-sum amount as contractors can only claim up to Rs 5,000 a month under Section 80GG. The government should address this irregularity by increasing the rental tax deduction limit for self-employed professionals in the Union Budget 2019.

Rajan Bandelkar, President, NAREDCO Maharashtra

The Budget by Modi 2.0 government inarguably lays forward a coveted plan structured with the ambition to achieve the “Housing for all” mission within the promised timeline. The managerial shift of housing finance to the Reserve Bank of India (RBI) is a thoughtful move expected to address and work towards eradicating the existing liquidity crunch. Given that a good part of demand in real estate is now driven by affordable housing, the deduction of additional 1.5 lakh on the loan amount for affordable housing will trigger more conversions and thereby stimulate further growth.

Tushad Dubash, Director, Duville Estates

Union Budget 2019-20 will ensure the all-round growth of the economy and boost the nation’s GDP. The government’s proposition on several reforms for rental housing will benefit tenants and owners alike. The modern tenancy reform will help reduce reluctance to rent, enhance the supply of rental homes allowing transparency during the agreement. The announcement made on additional income tax deduction of Rs 1.5 Lakh on interest paid on home loans will boost the affordable housing segment. Government's proclamation of tax holiday on profits earned from affordable housing will further motivate the developers.

J C Sharma, Vice Chairman and Managing Director, SOBHA Limited

Union Budget 2019-20 proposes to take the economy to the $5 trillion mark in the next few years, which will augur well for the country.  To provide further impetus to affordable housing segment, the Government has sanctioned over 81 lakh homes under PMAY Urban scheme with an investment of about 4.83 lakh crore. Of these, construction of 47 lakh houses has already begun. Besides this, an additional deduction of up to Rs. 1.5 lakh for interest paid on loans borrowed up to 31st March,2020 for purchase of a home valued at Rs. 45 lakh has been provided.  This will give the much needed fillip to the affordable housing segment. More importantly, this translates into a benefit of Rs. 7 lakh over the loan period of 15 years. Further, unavailability of land or high cost of land has been a hindrance to affordable housing projects. On this, the Government has proposed to make land parcel from public entities for such projects, which is a positive step.

Nesara, Executive Director, Concorde Group

The Union Budget has delivered on the Government’s agenda to pursue a strong reform roadmap. A substantial thrust on affordable housing, in the second phase of the PMAY scheme shall revive sentiments in the realty sector. It is heartening to note that the Finance Minister is committed to the rural and urban housing targets. The proposal to allow additional tax deduction of Rs. 150,000 on interest on housing loans, shall definitely boost retail interest in real estate. Along with these, the Government’s proposal to overhaul the tenancy law shall be a critical step in introducing newer models of leasing that shall empower the lessee. Apart from these, measures that focus on structural reforms such as easing the stress facing the NBFC sector by proposing regulatory parity, and allowing FIIs and FPIs to invest in their debt instruments as well as ramping up urban and suburban transport systems shall give a long-term boost to the real estate sector in the long run.

Samyak Jain, Director, Siddha Group

The Union budget announced will bring in a quick boost to the real estate sector as the government has decided to continue its focus in making housing more affordable for large population along with the promotion of affordable housing. The government’s imperative step on additional income tax deduction of Rs 1.5 Lakh on interest paid on home loans benefits the home buyers and will bring in the fence sitters back to the market. Additionally, the proposed tenancy law will help the tenants, as well as the landowners, that will enable streamlining of the Indian rental market. Further, the move taken to enhance the infrastructure and connectivity will not only favor the realty sector but also help other industries and create employment opportunities.

Hardik Agrawal, CEO, Radha Madhav Developer (Vrindavan), Sufalam Infra Projects 

The Union Budget has increased deduction of interest paid on home loans by Rs 1.5 lacs to Rs 3.5 lakhs from Rs 2 lakhs, which is a welcome boost for the real estate industry.

Saurabh Vohara,Business Head,NoBroker

This year’s Union Budget included a host of initiatives for the Indian real estate. There is an increased focus on augmenting construction of both, infrastructure as well as residential spaces to reduce the gap between demand and supply; with provisions to boost the initiative on the succession of the same. Government taking an initiative to fund NBFCs via private banks or allowing the domestic as well as NRI investors to purchase their high-rated assets will also be a positive step in avoiding the liquidity crisis in the real estate sector. The deduction in housing loan for the segment of affordable housing segment will be a boost to the segment.

Surojit Shome, General Manager and Chief Executive Officer, DBS Bank India

The Union Budget reiterates the government’s intent to accelerate digitisation in the economy. Incentivising digital transactions through measures such as a 2 percent levy on cash withdrawals from bank accounts above a cumulative one crore per annum threshold and reduced merchant discount rates can structurally change adoption levels. Additionally, encouraging measures for startups should boost digital entrepreneurship as well as efforts to increase digital literacy particularly in rural India will strengthen the Digital India transformation process.

Vikas Dawra, Joint MD & CEO, YES Securities

The overwhelmingly strong political mandate also ensures policy continuity, removes ambiguity, and boosts sentiment in the economy. The FY20 Union Budget by the new government is a testament to all of these. The measures announced will play a positive role in attracting more global investment, and much needed foreign direct investment (FDI) boost for key sectors. This, in turn, will translate into all-round growth of the economy and create a encouraging ecosystem for investors. The Budget continues to signal government’s commitment towards the revised fiscal glide path by pegging the headline deficit target at 3.3 percent of GDP, lower than the FY19 deficit of 3.4 percent. In the backdrop of slowing domestic growth momentum, the Budget furthers the ethos of reviving the twin growth drivers of investment and private consumption with job creation and inclusion as the common underlying theme. Through these comprehensive steps, the Finance Minister aims to take the Indian economy to a level of $5 trillion in the next five years from an estimated size of $3 trillion in FY20.

Amit More, Founder and CEO, Finzy, P2P lending platform

Finance Minister Nirmala Sitharaman's Budget for 2019 has a lot of welcome changes and initiatives to push India in direction of becoming a $5 trillion economy in the coming years. The proposed Budget tries to maintain a balance between growth, inclusion and fiscal prudence. The TDS of 2 percent to be levied on cash withdrawal over 1 crore rupees in a year is a step towards reinforcing digital payment in the country. Also, the removal of IT scrutiny for angel funding will further help in resolving tax issues for the startups.  Overall, the Budget comes as a support for startups by creating a specialized pool of talent and an environment for smooth business operations.

Yogesh Chande, Partner, Shardul Amarchand Mangaldas & Co

Capital is definitely core to banks for expanding credit, earning interest and growing their balance sheets, so that they can drive economic activities. The recapitalisation was needed and is a timely impetus. However, some radical changes like relaxing the statutory requirement of Government to hold not less than 51% of the paid up capital in PSU banks should have been considered.

D Narain, Managing Director & CEO, Bayer CropScience 

This Budget has infused new vigor to the government’s vision of enhancing India’s rural economy. The proposed measures around farming will give an impetus to the agriculture industry by plugging gaps in capital subsidies and structural support. The push for creating an enabling environment through 80 livelihood incubators and 20 tech incubators, will not only encourage a new breed of agri-entrepreneurs and vibrant start up community but also bring in high-end technology in farming. Plans to invest further in agri-infrastructure is a step in the right direction to make Indian agriculture more competitive globally.

Ullas Kamath, Joint Managing Director, Jyothy Laboratories

The Union budget has a major focus on the heart of our country i.e. agriculture and the rural economy. Being the sixth largest economy in the world and the 3rd largest economy in the terms of purchasing power parity, there is immense opportunity to rewrite the consumption story of our country. The Budget accentuates upon the need for heavy investment in infrastructure, digital economy and job creation in small and medium firms. The prime focus on initiatives such as ‘Make in India’ and’ Startup India’ will be crucial in fulfilling the aspiration of making India a US $5 trillion economy by 2025. We believe that the 10-point vision stated by the Finance Minister is expansive. It will create new benchmarks and efforts taken in this direction will boost the demand supply chain of the economy. The initiative of skill training 10 million youth employment, focus on skill sets needed abroad, new age skills such as AI, IoT, Big Data and 3D printing robotics will be instrumental in propelling job creation and overall development of the economy.

Siddharth Khinvasara, Co-Founder, EarthFood, startup

The Union Budget 2019-20 is very promising, especially for the agriculture sector. The incubation of the zero budget farming that involves zero credit for agriculture and no use of chemical fertilizers is a welcome move by the government of India. The government’s stance of setting up of 10,000 farm producer organisation by 2022 that will ensure economies of scale for farmers regarding access to inputs and markets will truly enhance the agriculture sector. Additionally, 80 livelihood business incubators and 20 technology business incubators will be set up to produce 75,000 skilled entrepreneurs in agro-rural industries will be a boost for a lot of budding entrepreneurs in the agri space. The governments focus on promoting entrepreneurship is quite evident. The announcement of an exclusive television channel for start-ups that creates a platform for discussing issues affecting the growth and match-making with venture capitalists is a move that is widely applauded by the start-up industry. Clearing the air around the Angel tax issue has been a relief for the startup community. Start-ups not being scrutinized by the IT department regarding the funds raised is a huge revolution for the start-up ecosystem as this would reduce the burden on the budding entrepreneurs.

Gurbaxish Singh Kohli, Vice President, Federation of Hotel & Restaurant Associations of India (FHRAI) & President, Hotel & Restaurant Association of Western India (HRAWI)

The industry expectations were high but the Union Budget has neglected us completely and we are disappointed yet again. While the government wants to give impetus to hospitality and tourism there is no mention except for the 17 tourist-friendly spots which we welcome but will need further details before commenting on it. We were expecting reforms in rate slabs of GST, Input Tax Credit and a definitive step to boost the domestic and inbound traffic. Hospitality plays a vital role in the growth of the economy, therefore, this sector cannot be ignored.

Anil Kumar Prasanna, CEO, AxisRooms

This is a supplementary Budget, though the expectations with regards to lower and single slab GST was not met for hotel industry and a very conservative approach adopted. There is a small win on MSME loans and Mudra loans for women. NRI investments in equity would be a boost for the start up sector. Additional Rs 1.5 lakh exemption on home loan would benefit the common man. MSME loans though taken up in this Budget is still a suspect in process and transparency is it applicable to tech industry and how the benefits would be delivered to them is still not clear.

Poorva Prakash, Senior Director, Deloitte India

Proposal to streamline multiple labour laws into 4 labour codes. This is a step to simplify, rationalise and consolidate the fragmented laws thereby leading to easier implementation.

Ajay Kakra, Leader-Food and Agriculture, PwC India

The SFURTI yojana is also an excellent initiative to organize farmers under bamboo and honey farmers and artisans who have been working in an unorganised sector. Also, beneficial step for NE states where bamboo is major produce. Bringing the allied sector such as fisheries in focus can help the development of fishing communities and fisheries as an occupation. ASPIRE scheme aiming to create 100 technology and livelihood incubation centres will boost the entrepreneurial spirit amongst the youth and encourage them to come out with innovative business ideas in the agro sector. This will go along way to make the Indian agricultural industry fit for the future. The creation of 10000 FPO's targets the much-required need of the agriculture sector to organise the farmer community and helping them to undertake agro-trade in an effective and profitable way.

Neeraj Bansal, Partner, Advisory Services, KPMG in India

“Significant boost to affordable housing with additional deduction on interest on housing loan with potential savings up-to INR 9.3 lacs for a single household for people with income less than 18 lacs on max loan amount is welcome. This will create new demand for houses up-to INR 45 lacs in the current year which is a big positive for the affordable housing developers.”

 Industry Leaders Reaction on Budget 2019: Adi Godrej says Budget is not growth-oriented; stock market comes down considerably

Avinash Saxena, Co-founder, ROPOSO

With startups being a major focus in Budget 2019, the government has showcased its seriousness towards the growth of startups in India. The Global Investors Meet will lead to investors now looking at India as an open market, directly leading to advancements in every sector in India. With the focus on resolving angel tax issue and not subjecting startups to any scrutiny in terms of valuation of share premium, the youth of India has seen a massive encouragement to become entrepreneurs of their own startups. We are definitely on the path to become a startup superpower really soon.

Rahul Jain , Head-Personal Wealth Advisory, Edelweiss

Overall, the Budget is comprehensive and focused on India’s long term growth. The recapitalisation of Rs 70,000 crore for Public Sector Banks (PSBs) is a positive sign. However, while some proposed reforms for NBFCs, MSMEs, EVs, and Start-Ups are commendable, we will have to wait and watch on how it is executed. The FY20 fiscal deficit target of 3.3 percent of GDP, is also ambitious, when compared to the Interim Budget Estimate of 3.4 percent of GDP. As expected, there has been no change in income tax slabs for individual tax payers, but there has been an increase for those earning Rs 2-5 crore and above. The effective tax rate for these categories will increase by around 3 percent and 7 percent, respectively. The proposal to extend Equity Linked Savings Scheme or ELSS-like income tax benefits to CPSE and Bharat-22 ETFs, will boost more retail participation in capital markets and increase tax saving options under section 80C. However, investors are advised to make careful choices.

Satyen Kothari, Founder and CEO, Cube Wealth, wealth creation service

The proposed global business summit shows India's growing confidence in the global financial stage. This is exciting and promising in its potential. Strategic partnerships are a critical element of growth for companies, and this kind of summit is the perfect matchmaking stage.

Naresh Sheth, Partner, N A Shah Associates LLP

A taxpayer now will be allowed to transfer excess balance lying in his electronic cash ledger under one head to any other head under which tax is payable. This is a great relief for tax payers who otherwise would have to claim refund of excess balance lying in one account and to pay cash to discharge liability under other head. A sensible amendment after 2 years of implementation of GST legislation.

Navin Makhija, Managing Director, The Wadhwa Group

Much on the expected lines, the government has announced to continue with its thrust for Affordable Housing. The Government aims to achieve its target of Housing for All by 2022 through Pradhan Mantri Awas Yojana (PMAY). This can be reiterated from the fact that it has sanctioned 80 lakh houses under PMAY Urban and an additional 1.95 crore houses proposed to be provided under PMAY Rural. The government has been consistent with its efforts in addressing affordable housing, be it giving infrastructure status to this segment in the previous budget to an exemption of Rs 1.5 lakh in income tax on home loans under affordable housing in this budget. This is a big move as it will benefit a broader segment of home buyers and increase demand going forward. Also, the support of Rs. 1 lakh crore by Government to NBFCs will help solve liquidity crisis to some extent which will indirectly help the recovery of the real estate sector.

Milan Mody, Partner, N A Shah Associates LLP

Ind AS is no longer a hurdle for demerger to be classified as tax neutral demerger.  The provisions under Income Tax Act were in contradiction to the requirements of Ind AS 103 Business Combination.  As per Ind AS the assets and liabilities are required to be accounted at fair value (except in case of common control transaction), whereas, to qualify for demerger with tax benefit it was mandatory that the resulting company records the assets and liability at book value. This issues has now been resolved by amending the definition of 'demerger' under section 2 of the Income Tax Act and permitting recording of asset and liability in the resultant Company at fair value in compliance with Ind AS.

Umesh Khatri, Co-Founder, COO & CTO, Rgyan, a socio-spiritual tech startup

It is good to see that the Finance Minister Nirmala Sitharaman is focusing on innovative skills of artificial intelligence, 3D printing and others. This will encourage in the growth of the startups in these sectors and people will get benefits of such technologies. Also giving a dedicated TV channel to the startups will help in creating more awareness among the mass regarding new innovations, upcoming future technologies, products and more. These factors will help the startup sector to continue with the growth.

Tapti Ghose, Partner, Deloitte India

The global demographic trends clearly indicate that major economies will have a skilled labour shortage. India proposes to leverage this by focussing on skilling India and reforming the education systems. This will also include skills sets required for working overseas such as language training in addition to an increased focus on skillset needs abroad - including language training and new age technology skills such as IOT, Big Data, Robotics. Focus on emerging new technologies in the form of artificial intelligence, data science, big data, internet of things, would revitalize technology companies. Connectivity, infrastructure, media, digital technology coupled with ease of living, ease of doing business and digital literacy is the focus of the government

The replacement of multiple labour laws into four codes is expected to streamline the process of registration, standardize the filing of returns, provide uniformity in definitions across labour codes, significantly easing business. These codes are labour code on social security and welfare code on social security and welfare, Code on wages, Code on industrial relations and code on occupational safety, health and working conditions.

Pravin Agarwala, Co-Founder and CEO, BetterPlace

Creating more jobs is the need of hour. Skilling people to meet the industrial needs and at the same time creating local jobs by promoting local entrepreneurs in agri and related fields will definitely boost the opportunity for people. I think we should also keep promoting SME's with better access to credit and keep growing the startup ecosystem which is actually creating lot of new jobs. Well done. Looking forward to the execution now.

Sameer Gupta, Tax Partner, Financial Services, EY India

Presently, neither are NRIs/ OCIs permitted to register themselves as FPIs nor an entity which is more than 50 percent owned by NRIs/ OCIs is permitted to obtain FPI registration. There are also other restrictions on investment by NRIs/ OCIs—transactions to be pre-funded, no netting off of transactions, transaction to be executed through Category I AD banks, etc. The proposal presented for merging of the FPI and NRI-PIS route with appropriate KYC norms will provide a single route for all types of portfolio investments into India resulting in simplification and ease of doing business for NRIs/ OCIs. If implemented, this could further pave the way for majority NRI/ OCI owned entities/ funds to access the Indian markets.

Nilaya Varma, Partner and Leader Markets Enablement, KPMG in India

With the government focused on initiatives such as Bharatmala, Sagarmala and Udaan which are aimed on bridging rural urban divide and improving our transport infrastructure, infrastructure will get a major impetus. Restructuring of National Highways Programme will ensure creation of a national highways grid of desirable capacity. The government has a clear focus on driving demand in rural India with a slew of schemes initiated to boost investment in the rural sector for upliftment the farmers. Opening up FDI in aviation, insurance, media and animation sectors will pave the way for  reviving investments.

Vineet J Mehra, Managing Director, DOT for EV Industry

Reduction in GST on EVs as well as tax rebate on interest for purchasing EVs should give the requisite demand push to the Electric Vehicle sector, however specific financial option for purchase of EVs by aggregators and E-logistics players still not addressed in the budget.

Vishal Gada, Partner, Dhruva Advisors LLP

Individuals who borrow car loans from banks to purchase an electric vehicle during the current financial year can claim an interest deduction upto Rs 1.5 lakhs per annum. This welcome proposal would bring down the cost of an electric vehicle, making it more attractive for an individual buyer.

Sambitosh Mohapatra-Partner and Leader Energy & Utilities, PwC India

Aspirations and support of manufacturing new age technologies—solar PV, EV, storage, batteries, charging infra will go a long way in making the energy sector fit for future. It can be transformational for attracting private investments to the sector. The Focus on group captive can trigger a massive interest of large international utilities to invest in the power sector. Captive rules amendment which has been in discussion since long should conclude soon.

Ankit Chitalia, CEO & Director, KisanKraft Ltd

We welcome the Union Budget’s focus on last mile delivery with an emphasis on improved rail and road connectivity. The development and maintenance of transport infrastructure to reduce congestion and improve access to rural markets will have a positive ripple effect on the Agriculture sector. Emphasis on the skilling of labourers, setting up of Farmer Producer Organizations, encouraging private entrepreneurship and business incubation in Agriculture leading to improved farmer price realization is progressive in outlook.

However, the broad nature of these schemes needs to be better tied to details and specifics of implementation. The Government should chart an immediate action plan on critical areas of agri-function such as farmer education, irrigation, groundwater recharge, R&D of seeds, advanced weather technology, disbursal of subsidies, and reduction of GST on agricultural machines, supply chain and storage of produce amongst others. While the Government’s emphasis to improve economies of scale at a broad level is appreciated, it is disappointing to see a lack of clarity and information with respect to on ground developments in agriculture. Promoting a package of practices and advanced solutions to mitigate various diseases and pests to address crop failures is required. Policies encouraging private players to look at seed development coupled with the abolishing of processes, restrictions hampering seed development will result in significant impact. The current state of negligence, if not addressed, will result in a negative trajectory of the Agriculture sector.

Rajiv Agarwal, MD, Essar Ports

The Budget has laid down a definitive road map for realising the dream of five trillion economy. Finance Minister has addressed many issues like of job creation investments infrastructure, encouraging start-ups, support to MSMEs liquidity issues Bank recapitalisation, through bank recapitalisation, improving water availability through water grid across the nation. The renewed focus on rural housing is a step in the right direction. The focus on logistics through Bharatmala, Sagarmala and Railways seek to improve connectivity that is much needed for a growing economy. Overall, it is a progressive Budget.

Rahul Garg, Founder, Moglix, e-commerce firm

The Union budget 2019-20 has come with a series of good news for the Indian startup community. With a host of incentives announced for the startup ecosystem, the most noteworthy effort being the tax relaxation for VCs and private equity firms. The intent of the Budget is clearly to provide much-needed impetus to the entrepreneurial spirit. Government's plan to aid in a setting up around 80 ‘Livelihood business incubators’ and 20 tech business incubators by FY19-20, will help create around 75,000 skilled entrepreneurs leading to job creation. Having a dedicated channel focussed on Start-up will definitely lead to awareness amongst the public at large about the scope and opportunity start-up ecosystem offers.

Keshav R Murugesh, Chairman, NASSCOM; Group CEO, WNS

In Budget 2019, there is an incremental thrust on infrastructure upgradation, job creation and digital economy--clearly the key tenets for the year 2019-20. Strategic thinking and an elaborate development of the 10-point agenda announced early in the year are evident in this budget. Job creation and re-skilling created a lot of stir last year. By introducing industry-relevant skills training for 10 million youth under the Kaushal Vikas Yojana, the government is clearly addressing the pressing issues in the country. The IT industry, for its part, is geared to partner with the government to enable skills training in Artificial Intelligence, Internet of Things, big data analytics, 3D printing, virtual reality and robotics — highly valued skills within and outside the country.

Vikram Agarwal, MD, Greendot Health Foods

Very encouraging budget for SME/MSE sector. With the government’s initiative, farm output has increased which leads to the promotion of Agri processing industry. We have planned to invest in developing value-added healthy agro-based products. Another big policy put forth by the finance minister on 'One nation One grid' for easy power availability at one price across states is also very stimulating for the industry.

Rakesh Soni, CEO & Co-founder, LoginRadius

We would like to congratulate the Modi govt 2.0 on Budget 2019. It captures the government’s vision of New India accurately, promoting ease of business and living. As a startup ourselves, we welcome the move to organise a Global Investors’ Meet in India to ensure equal opportunities for startups with growth potential. It will put India on the global map as a land of business opportunities. The initiatives to train the Indian youth in technologies of the future—AI, IoT and Big Data is another welcome move by the Government. With more than 50 percent of the population below 25, India has a significant advantage compared to the developed nations and these skills will serve as doorways to help contribute to the global workforce of the future.

Rikhil Shah, CFO, SBI General Insurance

Growth of insurance sector is directly related to the development in major sectors like infra, SME, etc., contributing to India's GDP. The Budget proposes to invest Rs 100 lakh crore in the infrastructure sector, Rs 50 crore for 2 percent interest subvention for all GST-registered MSMEs on fresh or incremental loans. This will give the required impetus to the infra and SME sectors which in turn will lead to growth in commercial insurance. Tax benefits on electric vehicles and home loans for affordable housing will give boost to motor and home insurance respectively. We welcome the move of proposed 100 percent FDI hike for insurance intermediaries. This will infuse capital and will translate in deeper penetration of insurance in India thus ensuring that the growing India stays adequately protected. Also, the proposal of hike in FDI in the insurance companies would be a welcome move for the industry.

Jairaj Purandare, Chairman, JMP Advisors,a professional services firm

Budget 2019-20 brings in important announcements to encourage foreign investment, both from FDI and FPI perspective. It is proposed to further open up some of the sectors for FDI, such as aviation, media, insurance while local sourcing norms are proposed to be eased in respect of FDI in single-brand retail trade. In presenting the Budget, the Government has taken due cognizance of the fact that FPI is a significant source of capital for the economy and hence, with a view to streamline the KYC compliance process and to facilitate Ease of doing business for FPIs, measures are being proposed to make the KYC process investor friendly.

In addition, the statutory limit for FPI investment in a company has been increased from the existing 24 percent and is proposed to be brought in line with the sectoral foreign investment limit. Further, it is proposed to permit investments made by FPIs in debt securities issued by Infrastructure Debt Fund – Non-Bank Finance Companies (IDF-NBFCs) to be transferred/sold to any domestic investor within the specified lock-in period.

Prasun Sikdar, MD & CEO, ManipalCigna Health Insurance Company

I strongly believe the level of education and health of the people, plays a key role in the development of the country, and the government’s endeavor to make India $5 trillion economy by 2024, will certainly give healthcare financing sector a big boost. Also, the government’s move to increase the FDI limit to 100 percent in insurance intermediaries, will further open up the Indian economy, and ensure higher penetration of insurance products in the country.

Rajan Sharma, Founder & CEO, Excess2sell, B2B wholesale platform

Taking the Startup India initiative and its focus ahead, the government has reinstated its intent of resolving key concerns of new technology businesses. Measures announced in this Union Budget will reinforce and help scale up the growth of startups that are on the verge of their next phase of consolidation. By taking concrete measures and a clear roadmap on taxation, capital gains, corporate tax and GST rates this budget will help startups like ours to grow and expand to its fullest potential.

Prithvi Singh, Founder and CTO, Gameskraft

The announcement in connection to address issues faced by entrepreneur and startup community is a relief. With the implementations of the policy discussed startups, especially who are dependent on angel investors, will be able to operate business without much of a hassle. The no-scrutiny by IT dept encourages small angel investors to boost the ecosystem. The initiative of kick-starting TV channel program will help to reach out to more people and also investor community thereby becoming an encouraging platform to boost startup culture in India.

Ravi Panchanadan, MD and CEO, Manipal Global Educational Services 

As stated by the Finance Minister in the Union Budget, the National Education Policy shall help transform India's higher education system, as one among the best, globally. The creation of a National Research Foundation (NRF) shall ensure that the overall research ecosystem in the country is strengthened with focus on identified thrust areas. An allocation of Rs 400 crore, exclusively, to create world class institutions of repute, is a tremendous step towards reversing brain drain. To amplify these, the ‘Study in India’ initiative shall attract talent from foreign countries to invest in their educational careers in India. We are eagerly awaiting the rollout of the new HE policy, as it promises to be game changer.

Vishwanathan Iyerprofessor and associate dean (academics), TAPMI

The establishment of the National Research Foundation to promote research in India is a great move to strengthen overall research ecosystem in the country. Research is one area where we have been lagging behind compared to the West and even China. ‘Study in India’ is expected to be a game changer in terms of bringing foreign students into Indian higher education system. While we have always aimed at ‘Internationalisation’ of Indian students in higher education, it is time we started seeing ‘Indianisation’ of International students in the higher education space.

Subrat Mohanty, Group President, Manipal Education & Medical Group, MEMG

The Government has comprehensively addressed the issue of employability in the Union Budget. At the outset, the ramping up of the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) to leverage India’s unique demographic dividend is a crucial step to boost the economy. The intent to train youth in new age skills (such as AI, ML, Big Data, IoT, and robotics will position the country as a hub for highly skilled labour. This will help drive employment considering the demand for these skills in the wake of Industry 4.0. Also, the increase in courses through the Swayam platform will empower the disadvantaged sections of the society in acquiring employable skills and for upskilling. Supplementing these reforms, the government’s decision to provide connectivity in every Panchayat through the Bharat Net initiative will facilitate a broader base for upskilling across rural India.

Gopal Devanahalli, CEO, MeritTrac Services

Under the Skill India (PMKY) initiative, the finance minister has talked about focusing on new age skills like Artificial Intelligence (AI), Internet of Things, Big Data, 3D Printing, Virtual Reality and Robotics. This is a welcome move as more jobs will be created in these areas in India and abroad. The Minister has also talked about reforms in the regulatory systems for higher education sector which I believe will help in improving the overall quality of research and addressing employability gaps.

Pallavi Mody, Professor, SPJIMR

After the landslide victory in the elections, surprising the educated intelligentsia and media, the Finance Minister Nirmala Sitharaman presented a Budget that focuses on Bharat with 10-year vision, 5 year- target and 1-year allocation of resources. Broadly speaking, the mandate for this Budget was twofold. Reward the voters and kick-start the economy. There are plenty of evidence that they have done sufficient for both. Be it more money for rural India in form of taking care of farmers, fisherman, small businesses, self-help groups of women, start-ups, pension scheme extended to small businesses of having turnover less than 1.5 cr. It is a pleasant surprise that there are no more special schemes announced.

The Budget for the first of time has spoken in terms of ‘ease of living’ of people in the country. The government is taking responsibility to make the people in the country to be comfortable; sanitation, cooking gas, power, water, connectivity, transportation are the kind of issues that have been given importance in the past five years and they continue to be the priority. Should not this be the primary function of any government? We can only say that it is good that the government in India is working on this.

Pankaj Muthe, Program Manager, Academic Program, APAC, Qlik

The government’s continued push to improve the quality of higher education in India is extremely commendable. The allocation of Rs 400 crore to create a world-class higher education ecosystem in the country will definitely improve the quality of talent that joins the workforce. The government should also make stronger efforts to incorporate data literacy training at the grassroots level and incentivise organisations to launch data literacy training initiatives for their employees. Doing so will equip current and future Indian professionals with the required knowledge and competencies to navigate the data-driven world of tomorrow.

Kanak Gupta, Director, Seth MR Jaipuria Schools

Budget 2019 is a positive step in the right direction to focus on the education sector. As India marches towards being a $3 Trillion economy, as the Hon’ble FM said in the Parliament, important to bring the education ecosystem up to and beyond global levels. The status of education is often a healthy predictor of the country’s overall development and well-being. I’m excited about the proposed setup of the National Research Foundation; this could be the game-changer. Research is sacrosanct. I’m also hopeful that the National Education Policy will focus on upskilling of both teachers and learners to meet global levels, and ensuring we don’t send our brains abroad, nor do we spend millions of dollars in tuition and living costs. Study in India, Stock exchange for Social Enterprises will be a boost for the Tier 2/Tier 3 educational institutes as well. A TV channel dedicated to start-ups will be a win-win with Institutes and students on higher-ed as well. Overall, the Hon’ble Minister’s focus on improving education with the target towards the future, sustainable growth is commendable.

Mahendra Singhi, President, Cement Manufacturers Association

Skill, speed, and scale—all three developmental aspects envisioned by Narendra Modi are perfectly captured in the Budget 2019 document. The cement sector offers to further the circular economy practices on close partnership through government support.

--With inputs from Reuters

Updated Date: Jul 10, 2019 15:23:02 IST