Amid huge uproar by opposition to delay the budget by a day following the demise of IUML MP E Ahamed, the decision was taken to present the Budget as scheduled on Wednesday morning. Undoubtedly, people were expecting a standout budget from the finance minister, including a number of reforms, and income tax exemptions to give respite to the wider public section in the wake of the nuisance triggered by the govt’s demonetisation move. But, did FM Jaitley live up to the expectations of the public and corporate world? Here’s how the corporate world reacts:
Here’s how the corporate world reacts:
Bipin Preet Singh, Founder & CEO, MobiKwik: Big digital push is the thrust of the Budget and is a very welcome and the right move for the future growth of the economy. I commend this progressive budget that invests heavily in technology and digitization. The focus on digital payments will lead to a revolutionary transformation in Indians’ payment habits.
Digital payments will be the new normal in 2017 and we are very excited about this. As we become more digital, India will see new taxpayers and better transparency in incomes.
Upgrading digital infrastructure to support cashless transactions in rural and semi-urban areas will encourage more merchants and consumers to transact on non-cash and online platforms. However, we feel that the government must have also considered promoting STARTUPS in the digital payments and digital security areas. Secure digital transactions are the only way to sustain India’s habit of cashless payments.
The budget also promoted the startup ecosystem with tax benefits. Reduction in the corporate tax for Medium and Small Scale Enterprises (MSMEs) to 25% will also go a long way in attracting more investment in the country. It will surely give the domestic sector a massive push and indirectly help the country in restoring its healthy GDP growth forecast.
Overall the Budget proposals look to boost consumption. The impetus on affordable housing and rural infrastructure will boost lower and middle income and translate into consumption.
Dinesh Rohira, Founder & CEO, 5nance.com: Build Bharat, Digitize India, Growth & Investment for Masses, Create Long Term Growth sums up Budget 2017. The Finance Minister has captured majority population of this country into a positive mood vide this budget. The message is clear, the government is for the masses and the economy, industry has to wait.
However, even the industry has been taken care by no major negatives. This is a momentous budget clearly aimed at Socio-Economic reforms to achieve a higher growth rate that would eventually benefit the common man in the long term. With a huge push to rural economy, farmers & agriculture growth (expected at 4.1%), rural housing, affordable housing, skill development, reduction in taxes for the entry slab, focus on infrastructure, fiscal discipline, reducing capital gains tax timeframe to 2 years for fixed assets, enabling smaller businesses with tax sops, cashless economy and regulating political funding, Mr. Jaitley has struck the right chord with the country.
He has set the country for long-term growth as well as defined the mood for future budgets. Increased allocation for the rural reforms, increase of 25% in capex and 5% reduction in personal income tax for the lower slab are the hallmark of this budget.”
Killol Pandya, Head, Fixed Income, Peerless Funds Management Co. Limited: The budget seems to be well-balanced. The government appears to have done a reasonable job of managing growth requirements, social development, nation building and managing the fiscal deficit and inflation. From the domestic bond market perspective, the borrowing numbers seem to be manageable. We may consider the budget as mildly positive one.
Vishal Malhotra, Tax Telecom Leader, EY India: The FM while acknowledging the importance of the telecom sector for the economy as also the digital initiative of the government hasn’t proposed much for the telecom sector at least in his budget speech. Extension of the period for claiming MAT credit to 15 years from 10 years presently as well as an extension of the period for availing lower withholding rate of 5 percent on External Commercial Borrowings and Masala Bonds, is expected to benefit the industry.
The relaxation in transfer pricing compliance on specified domestic transactions should also assist in lowering the compliance burden of the telecom players other than those who continue to claim profit linked incentives.
S C Ralhan, Presient, FIEO: The budget has drawn a road map for bringing the economy back on track and accelerating it in a medium term. The investment of close to Rs 4.00 lacs crore in the infrastructure encompassing road, railways, aviation would not only improve the competitiveness of manufacturing and exports sector but would reduce the logistics cost of exports as well.
While Trade Related Infrastructure Scheme is welcomed, it would require sufficient funding to make an impact. The MSME sector with a turnover of up to Rs.50 crore will get a boost with the reduction in income tax, while SEZs may draw a consolation in carrying forward of MAT from 10 years to 15 years.
A status quo in service tax and excise duty (with few aberrations) is indicative of the fact that we are on our course to introduce Goods & Services Tax in this fiscal.The global challenges highlighted in the Union Budget requires us to be on our toes and revisit our strategy to push exports in such volatile global conditions.
The global challenges highlighted in the Union Budget requires us to be on our toes and revisit our strategy to push exports in such volatile global conditions. Mr Ralhan expressed his disappointment as aggressive marketing strategy through an Export Development Fund did not see the light of the day.
Anshuman Magazine, Chairman – India and South East Asia CBRE: Overall, the Union Budget 2017 augurs well for real estate, affordable housing, and the infrastructure segment. The affordable housing sector is finally set to get infrastructure status. This was a long-awaited announcement. While we are yet to read the fine-print, this is indeed an important step to promote access to priority lending thereby spurring supply of low-cost housing units across various cities in India.
Relaxation in area measurement, as well as completion timelines to seek tax exemption, are welcome steps. Further, the government has also increased allocation under the PMAY scheme. This will encourage home buyers and further boost participation from the Private players.
The airport authority of land act amendment is yet another positive move which will allow development of land around the airports. This will further improve infrastructure and more importantly, increase funding for the development of the airports. This is over and above the record allocation made to the overall infrastructure sector.
In order to encourage greater fund flows into the economy, the FM has announced the abolition of the FIPB. While a clear policy outline is yet to be revealed, this is another positive step to liberalize FDI policy framework and ease regulatory hurdles in attracting investments.
The government has also been accommodative of the concerns of the real estate sector. The relaxation on long-term capital gains, joint development agreements, tax rebates for builders will help reduce their tax liability.
While greater rebates were expected in individual tax rates, nonetheless the rebate for individuals earning up to 5 lacs will help increase their disposable incomes. This might help spur consumption and also have a positive impact on demand for housing.”
Chanda Kochhar, CEO, ICICI: It’s a very well-rounded budget which seeks to address requirements of various segments in the economy.
Brotin Banerjee, MD & CEO, Tata Housing: Infrastructure status to affordable housing comes as a landmark announcement for the consumers and the real estate industry. A long-standing demand of the sector, the government has realized that housing and infrastructure can be two pillars to increase GDP and accelerate economic growth.
Easy and dedicated access to institutional financing, higher limit on external commercial borrowings will attract more investments and assure sustained growth of affordable housing in India, making it the core driving segment for real estate. On the other hand, long-term financing at lower rates will reduce costs of construction for developers allowing them to pass on benefits to consumers. The new status will increase the resource allocation for the sector, catalyzing housing supply and reducing the supply gap.
This budget has brought us a step closer to achieving the mission of providing housing for all. Implementation of these schemes will be essential for its success. Clarity on the definition of ‘affordable housing’ will be useful. This is very beneficial for Tata Housing as a pan-India developer, which is currently developing more than 40 million sq. ft of affordable housing.
Sunil Jose, Managing Director, Teradata India: Budget 2017 highlights the government’s focus on enforcing greater transparency and accountability with a clear attempt being made to widen the tax base. Finance Minister Arun Jaitley made several references to using data mining to improve the efficiency of the various tax departments specifically with regards to transforming India from a cash-driven to a digital economy using new measures such as Aadhaar Pay. This is a step in the right direction, which will have a relevant impact in widening the tax base and make India fiscally stronger and have a positive impact on national growth and development.
Sumit Sabharwal, CEO (Managed Services) & Managing Director (SAARC), Excelity Global: We welcome the Union Budget 2017 where the proposals have a huge benefit for the growing India private sector workforce. It provides impetus and greater momentum towards a digital economy to make India more competitive on a global platform. The budget announcements will further encourage Excelity’s endeavor to add value to our client’s employees with superior, innovative, simplified and customized value-based technology and mobility offerings.
K Shankar, CEO, Feedback Business Consulting: I can confidently say that the budget has landed on its feet. I think India got fast-forwarded a bit in the last 90 minutes. The budget hit all the right notes and reiterated intent. The big plusses are the Rs 3.95 lakh crore allocation to Infra, 10 lakh crore for Agri, Tax cuts to MSME, 2.4 L additional allotment for lending etc are outstanding. On the hygiene side, the fiscal deficit is pegged at 3.2 %, funding of political parties has been dealt with, FIPB has been abolished and service charge on e-payments has been removed. This budget has also made a clearer statement than ever before on tax compliance and punishing the defaulters. The FM also connected demonetisation with an increase in taxpayers net, transfer of demonetisation gains to sectors that needed higher allocation – Agri and Infra the largest gainers. It addressed all stakeholders effectively.
Shanti Ekambaram, President – Consumer Banking, Kotak Mahindra Bank: There was a lot of anticipation and apprehension about Budget 2017. There was enough to satisfy those anticipating, and relief for those who were apprehensive. The big push to expenditure for farmers, rural sector, affordable housing, and infrastructure will give a fillip to growth and employment.
Putting more money in the hands of the common man through tax rate reduction, encouraging FDI, measures for education, skilling and employment of youth are all positive measures for economic growth over the next few years. A commitment to the path of fiscal prudence has been made, although fiscal deficit was pegged higher at 3.2 percent keeping in mind the need to increase public investments in the absence of private sector investments to ensure GDP growth. Reduction in the corporate tax rate for MSMEs, measures to increase transparency by restricting cash transactions to Rs 3 lakh and change in the framework of political funding are welcome.
The reduction in capital gains period for real estate is a positive move. A big thrust to digital transactions is a step in the right direction. Overall, it is a positive budget with a focus on the right segments, with an aim to increase tax to GDP ratio and targeted expenditure to give growth and employment a fillip.
