How Was Budget 2016? Post-Budget Reactions From Industry Leaders
Jaitley's third budget marked a strategic shift by addressing rural distress in a country of 1.3 billion, where two-fifths of families rely on farming and are reeling from two years of drought
Photo Credit : Subhabrata Das
Finance Minister Arun Jaitley's new budget is being described as a fire-fighting measure that seeks to win back support among rural voters for Prime Minister Narendra Modi's government and sustain growth against a grim global economic backdrop.
Jaitley's third budget marked a strategic shift by addressing rural distress in a country of 1.3 billion, where two-fifths of families rely on farming and are reeling from two years of drought.
Here are reactions from experts and business leaders from various sectors:
Swati Bhargava, Co-Founder, CashKaro.com
I would view this budget to have a positive push to industries across the board. This budget focuses clearly on growth, development and job creation with particular focus on empowering the rural sector. In January, Prime Minister Narendra Modi had launched "Startup India, Standup India" initiative with the motive to take this sector to a new horizon. Clearly, this budget is in all support to the initiative. Corporate tax for companies with turnover not exceeding Rs 5 crore has been reduced to 29 per cent plus surcharge and cess. This is a welcome advantage in union to last year's promise of gradual reduction of corporate tax from 30 per cent to 25 per cent over four years and hence will encourage more to start up.
Girish Patel, CMD, Cengres Tiles Limited
The 2016 Union Budget’s push for affordable housing is a laudable move. 100 percent deduction for profits to housing projects building homes up to 30 sq metres in the 4 metro cities and 60 sq metres in other cities will spur demand for affordable homes. Further, deduction for first time home buyers of an additional interest of 50,000 per annum for loans up to 35 lakh sanctioned in 2016-17, where house cost does not exceed Rs 50 lacs, will attract foreign and domestic investment for such projects.
Adhil Shetty, CEO and Co-founder, Bankbazaar.com
The budget makes a push for Financial Transparency and Efficiency in delivering subsidies by making the payment process more digital. We strongly believe that statutory backing for Aadhaar will be a game changer. The subsidy scheme and the social security scheme will be automated and Aadhaar-based, thereby increasing the role of the digital in the financial sphere.
Snehdeep Aggarwal, Founder and Chairman, Bhartiya Group
We are enthused by the steps taken for promoting affordable housing. Tax breaks for companies making homes of less than 30 sq m in the four metros and 60 sq m in other cities are welcome. Similarly, to ease construction, ready mix concrete being exempted from excise is a very laudable step. Doing away with service tax for homes up to 60 sq m is going to help the end user and create more demand.
Aloke Bajpai, CEO & Co-Founder, ixigo
The Union Budget 2016 has laid out big investments for the infrastructure sector which include allotment of funds for the development of roads and highways and an action plan to revive 160 non-functional airports. These steps come as a welcome move for the travel and tourism sector.
Chandra Shekhar Ghosh, Founder, MD and CEO, Bandhan Bank Ltd
The biggest take away from this budget is Finance Minister Arun Jaitley’s commitment to the path of fiscal consolidation. There was pressure on him to have an expansionary budget targeting growth but he has not compromised on fiscal discipline even as his focus remained on growth, driven by domestic demand and a slew of reforms.
Ashutosh Pande, founder and chief innovation officer at PaySe
The recent budget announcement is focused more towards uplifting the rural sector. The focus on skill development for the SC-ST and women is an act that will promote entrepreneurship in the roots of our country. A sum of Rs 500 crore which has been allocated in the budget for Stand Up India scheme is expected to benefit over 2.5 lakh entrepreneurs.
Sriram Mahadevan, Business Head - Happinest, Mahindra Lifespaces
It is heartening to note how the government has taken cognizance of the importance of the Affordable Housing segment towards making "Housing For All by 2022" a possibility. This budget provides some of the long standing stimulus needed to drive growth in the segment. Additional exemption of Rs 50,000 on housing loans up to Rs 35 lakh for first time home buyers (on homes that cost upto Rs 50 lakh) coupled with exemption of service tax on construction of affordable houses up to 60 square metres will reduce the cost of home ownership for the price-sensitive affordable home buyer.
Alok Sanghi, Director, Sanghi Industries Ltd
The government has focused predominantly on the development of agriculture sector, which should aid rural demand generation. I am also glad to see the attention being paid towards building infrastructure especially roads. The infrastructure sector creates highest employment and is imperative for the growth of our country. The government’s focus on start-ups and entrepreneurs is also commendable.
Arijit Basu, MD & CEO, SBI Life Insurance
The Government’s endeavour to educate the common man on the importance of having life security related products like Life Insurance, Health Insurance has continued in this year’s budget also. The implications of providing health insurance of up to Rs 1 lakh per family and a top up of Rs 35,000 for people above 60 years is that people will be more aware of the need for insurance and Life Insurance companies can capitalize on the same.
Pankaj Bansal, Co-Founder and CEO, PeopleStrong HR Services Pvt. Ltd
The government’s nine pillars of budget are very interesting, especially the fourth pillar which talks about education, skill development and job creation. The government has hit the nail in the head by providing 8.33% employee provident fund (EPF) contribution towards new employees for three years and Rs 1,000 cr have been allocated towards it. This will not only promote employer to generate more jobs, but will also encourage employers to move towards professional employment.
Amit Modi, Vice President CREDAI Western UP and Director, ABA Corp
We have to say that though the Union Budget 2016 has been great on infrastructure, same is the not the case when it comes of real estate and housing. The Rs 97,000 crore for road construction was indeed the need of hour. We would have liked the government to announce long-pending demand of single-window clearance for real estate projects to bring in more transparency.
Bhavik Chinai - CEO, Vamaship
For startups, there have been positive announcements, one being possibility of a new company formation in 24 hours. Also, manufacturing startups will gain from a reduced 25 per cent taxation in comparison to the current rate, also supporting the Make In India initiative. Startups would also gain from application of only MAT, not corporate tax for 3 out of 5 years.
Mukesh Butani, Managing Partner, BMR Legal
It’s a balanced budget with an overarching theme of realizing inclusive and staggered economic growth, without stepping down on the path of fiscal prudence. Amongst positives, focus on infrastructure development, fixing distressed asset concerns of financial sector, employment generation through indigenization stand out. Bankruptcy code and a framework for commercial dispute settlement under PPP framework are the two most significant regulatory reforms rolled out.
Jyoti Vaswani, Chief Investment Officer, Future Generali India Life Insurance
The Budget is a very well balanced one. Adhering to fiscal consolidation target of 3.5% in FY2017, no Long Term Capital Gains tax on equity investments and no increase in service tax are the key positives from the Union Budget. There has been a clear focus on reviving the rural economy and continuing with spending on infrastructure which will boost economic growth.
Prafulla Mathur, Founder and CEO, WudStay
I see this as a promising budget for entrepreneurs and startups. I am glad that the government has relaxed its taxation policies for startups. It will be a great opportunity for startups to utilise these funds into further scaling its business and operations. Also, the Finance Minister’s decision to relax taxes on capital gains for investors, will generate a positive sentiment amongst the VC community which could help entrepreneurs looking to raise funds.
Sunil Duggal, Chief Executive Officer, Dabur India Ltd
Finance Minister Arun Jaitley’s nine-point-agenda Budget is a balanced statement that seeks to move away from offering freebies to promoting investments. It is highly encouraging to see that fiscal discipline has been given priority in this year's budget, with an emphasis on improving the quality of life in Rural India. Opening up FDI in Food Processing, the Finance Minister has taken positive steps that would not just boost overall confidence, but also go a long way in generating employment.
Bhargav Dasgupta, MD and CEO at ICICI Lombard General Insurance Co Ltd
The Union budget has rightly focused on the key enablers i.e. infrastructure, skill development and agriculture to foster India's growth momentum. The adherence to fiscal prudence also augurs well for the overall strength of the economy.
Ashish Mehrotra, CEO and MD, Max Bupa Health Insurance
The budget takes forward the Government’s clear resolve to accelerate the momentum in the health insurance space and make quality healthcare affordable and accessible to all sections of the society. Healthcare needs of the rural sector and those of senior citizens have been declared as of the critical pillars of the Union Budget 2016-17.
Debjani Ghosh, Vice President, Sales and Marketing Group, and Managing Director for South Asia at Intel
The budget is strongly focused on bridging the divide between the 'haves' and ‘have not’s’, and good work by the Government in identifying the right priorities for focus under the 9 pillars called out by the FM. This budget, unlike any other, has not treated technology in isolation but integrated the effective use of technology across all the strategic imperatives in keeping with the intent of a Digital India.
Krish Iyer, President and CEO Walmart India
The Union Budget 2016 continues to rightly focus on rural and infrastructure sector. The planned investment in these two critical sector will not only create jobs but also give impetus to demand generation and economic growth. The government’s proposal to create e-market for our farmers through ‘Unified Agri Marketing platform’ is very bold and forward looking and will positively impact country’s farmers.
Prashant Singhal, Global Telecommunications Leader at EY
Telecom sector had high expectations from the Finance Minister since several existing tax provisions were exerting additional burden on the industry and required urgent revamp. Proposals introduced in Finance Bill 2016 is a mixed bag for the telecom sector. While clarification introduced in the taxation of spectrum fee and applicability of BCD may result in increased financial burden for the ailing telcos, the same may reduce future litigation.
Ratnesh Kumar Jha, MD, Cambridge University Press, South Asia
The budget has laid out a good roadmap for improving education systems at school and higher education levels with a focus towards job creation and skilling. The emphasis on higher education and setting up of a higher education Financing Agency with a fund of Rs 1,000 crore is a step forward towards enhancing the quality of education and talent of the workforce in the country.
Apoorv Ranjan Sharma, Co-founder, Venture Catalysts
The union budget 2016-17 is a welcome sanction for the startup ecosystem with major relief announcements such as tax exemption for three years after setting up the company.
Shashank ND, Founder and CEO, Practo
The Budget is a clear indicator by the Government to bring development at the grass root level for its citizen. The Finance Minister’s focus on health as one of the key pillars proves to show that everyone should have the right to live a healthy lifestyle. The fact that quality drugs will be made available by setting up 3,000 stores in rural India along with health insurance of up to Rs 1 lakh per family; top up of Rs 35,000 for individuals above 60 years indicates that incentives should be made available to every Indian, irrespective of old age or income limitation.
Dhanraj Bhagat, Partner, Grant Thornton India LLP
With regards to 100 per cent FDI through FIPB route in marketing of food products produced in India, it is still not clear whether this will be permitted for retail marketing or only wholesale marketing. We will need to study the fine print before concluding on the same.
Rajesh Sud, Executive Vice Chairman and Managing Director, Max Life Insurance Company Ltd
On the BFSI front, FDI through automatic route in the insurance sector is a welcome move as it will attract foreign investments in this capital intensive industry. The Finance Minister could have provided greater allocation for bank recapitalisation to promote better credit availability, which is important to support growth.