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BW Businessworld

Reactions: Report Card

The good, the bad and the so so. Corporate India gives the Union Budget 2017 a mixed rating By Team BW

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Rajan Bharti Mittal, Vice Chairman, Bharti Enterprises
I wouldn’t call it a populist budget to begin with because they have addressed the rural economy including MNREGA, transport and railway in a big way which will spur investment and growth. So having kept the fiscal deficit at 3.2 per cent instead of 3 per cent, as committed, shows the intent that the government wants to kick start the spending.

Demonetisation has its own role to play. So some effect will happen on the GDP. But the growth side has been kept intact. Doing away with FIPB is a great move but we will have to see the final print. Earlier there was one nodal point and everything going automatic is a good thing. Transparancy in electoral funding is great. I would say that in a way it has never been done earlier.

Personal taxes, we may say, is a minor change but for a lot of people it’s a huge one. As for corporate taxes, yes of course, we were expecting some concession. But instead of cutting corporate taxes for large corporates, the FM has brought in a major push for the MSME, which is a large number in itself and will spur growth in a very impactful way. The budget is not a yearly statement on expenditure and revenues, but a tone setter of the governments. It clearly shows that they want to spend, grow in terms of infra, economy, etc. It is more effective to see for the years to come. I wouldn’t want to rate this budget, but overall, it looks promising.

Sunil Duggal, CEO, Dabur India Ltd
The Union Budget for 2017-18 is a consumption focused statement that seeks to drive consumerism, particularly at the Bottom of the Pyramid. It may lack any big bang announcements, but it certainly contains measures that are seen as the right steps in the right direction, and are aimed at improving the quality of life in rural India.

The only disappointment, I would say, is the absence of any cut in Corporate Tax rate for larger firms, which most people had expected.

The Budget was expected to be focused at boosting consumption, and FM has delivered what was expected. This Budget has taken some positive steps that will boost overall consumer confidence and go a long way in generating employment. The focus, this year, has clearly been on farmers and people in the hinterland. These, coupled with the skill development initiative, would not just strengthen the hands of the rural poor, but also help put more disposable income in the pockets of the rural consumer and ensure continued rural demand for branded consumer goods. The Income Tax rate cut to 5 per cent for individuals with income between Rs 2.5 lakh to Rs 5 lakh is a big positive that would put more disposable income in the pockets of the common man.

Sumit Sawhney, Country CEO & MD, Renault India Operations
This was a balanced and a cautious Budget. It could have been aggressive especially on the manufacturing side, where the jobs are created. I was expecting some sops for larger corporates — some incentives to boost R&D, and also manufacturing sector especially the automobile sector which holds 40 per cent of manufacturing GDP, but nothing was announced for the manufacturing industry. We were expecting some incentives for R&D to be declared that would help Make In India. Now is the time where aggressive measures need to be taken to take India into the big league in manufacturing. Having said that, the positive moves on infrastructure and rural economy are good, but we have to move from good to great now. We expect the government to do great things and not settle for good things.

Rahul Bajaj, Chairman, Bajaj Auto
OVerall it is good. The electoral funding part is very good. Changes in taxation is good for low income people. There are good provisions for MSMEs as well but nothing has been given for the richer people; we will see next year.

There is nothing for the auto sector. We will have to wait for the GST roll out to see what is there for the two wheeler segment.

All the leading sectors have got benefits such as Start-Ups, Youth and Agriculture.

We never have a budget with no disappointments but in the circumstances I think, one thing which happened last year was exit tax from charitable trust. Nobody is talking about it except a few people who control charitable trusts.

Naina Lal Kidwani, Chairman, Max Financial Services Ltd
This Budget is very pro-growth because they have recognised the need for the required push in the infrastructure sector, where the transportation gets a big focus. Transport is a sector where the government has been doing quite well in terms of investment already. For the Railways, I do think that we can see more investment there and the recognition that there are subsidiaries which can go for IPO and therefore, money can come from the capital markets into that sector.

So, it is pro-growth in terms of investment and progrowth in terms of individual consumption-led demand which comes from putting more money in the hands of people, i.e. lowering the tax rate, which has been done.

The challenges do remain, especially in the banking sector. Is Rs 10,000 crore enough for capitalisation, given the NPAs of PSU banks? Overall I would rate this budget as 8/10.

Manish Sharma, President & CEO, Panasonic India & South Asia
THE Union Budget 2017 will have a long term impact, it needs to be analysed further when it comes to the appliances and consumer electronics industry. In this Budget, a lot of impetus has gone to the rural economy and allocation on infrastructure by the finance minister. As a consumer electronic company, we were expecting direction on the upliftment in the supply chain and logistics in India. The Budget allocated towards MSIPs and EPF looks progressive and will surely reduce dependency on imports in the industry.

We look forward to the next draft of the GST. However, the government’s move on imposing a two per cent special additional duty on populated printed circuit boards (PCB) used for mobile phones imported into the country, will provide adequate protection to the domestic industry and give the necessary impetus to Make inIndia under the GST regime.

Naresh Trehan, Chairman, Medanta
IT is not a big bang Budget. Let us see how the electoral reforms announced in the Budget in terms of funding pans out. Much was doled out for the agriculture and rural sector, which is good. Again on the healthcare front, nothing significant was announced — except two new AIIMS to be set up in Jharkhand and Gujarat. And new rules regarding medical devices will be devised to reduce their cost along with establishing 1.5 lakh health sub-centres to be converted to health wellness centres, which is already happening. No medical reforms, nothing for below-poverty line patients, only some sops for senior citizens. I rate it very highly 8/10, only because the intention of the Budget was very inclusive. Not much for the healthcare sector, but the direction was right and a lot of encouragement. In the last three years of the government, step-by-step they have put a squeeze on the illegal economy, all steps in right direction, for the common man’s point of view it is a well balance Budget. The electoral reform is a game changer, reduction of taxes will have ripple effect. Quality of education in the medical sector will improve. Steps for eradication of chronic diseases is a good step.

Piruz Khambatta, Chairman, Rasna India Ltd
I thought the UP elections are nearing so it will be a reformist Budget. The rural economy is getting a boost, so much capital investment is infused. A bold step ensuring that political funding limit is tapered down to Rs 2000 in cash — are all positive steps. On the negative aspect, private manufacturing sector is not growing and employment is minus, not plus, after demonetisation. The expectations for the manufacturing sector are not met. No service tax exemptions on digital payments, only IRCTC is an exemption. The FM should have taxed the cash transactions to encourage digital transactions, which was not done. Secondly, I was expecting that the industry will get a lot of employment generation benefits and export benefits because export industry is a big employment generator. In R&D, technology, nothing was announced. No tax benefits for higher income level above Rs 5 lakh. See the surcharge has gone up and it will affect the salary class, so people with income above Rs 50 lakh or more, will have to pay more surcharge. There were no measures as to how they will get more out of people from high income class people.

Sunil Kant Munjal, JMD Hero Motors
AN amazing array of areas got covered in the Budget. Very significant changes proposed in terms of infrastructure, maintaining fiscal deficit and focusing on both the rural economy and the poor. The FM has tried to create an environment for a cleaner fiscal system. For consumption, we had earlier said that he should focus on indirect taxes which FM will not do, because GST will take time.

Anirudh Dhoot, Director, Videocon
THE 2017-18 Budget, based on the objective to Transform, Energise and Clean India, is aimed at spurring economic growth, synergising investments and establishing greater transparency. With 100 per cent rural electrification, lowered tax rates for MSMEs, and increased allocation towards schemes like M-SIPS and Electronic Development Fund (EDF), the Budget fosters positive steps to further accelerate manufacturing capabilities and boost employment in the country. High disposable income, as a result of lower tax rates, will lead to higher purchasing power of the individuals. This will lead to increase in demand of consumer goods.

Also, we are happy to learn that GST is on track. In addition to this, the abolishing of the Foreign Investment Promotion Board to ease the inflow of Foreign Direct Investment (FDI), will expand investments significantly. All this will play an extremely important role in realisation of the Union government’s dream of Make in India.

Sidharth Birla, Chairman Of XPRO India Limited
IT’S a sort of carry- in budget, which needed to cover too many sectors. The most important theme going forward this year is going to be confidence building, not only for investors but also for the operating businesses, as the GST would be coming in. We need confidence building among the consumers, because unless demand rises, we are in trouble. Further, the government needs to continue doing the same for foreign investors, because that is still 10 to 12 per cent of our investment. So, I think in those terms, they have made a good beginning. But it has promised a lot of things. Again, everything on the Budget is going to depend on the implementation, because much of it is soft factors like tax administration, decision taking, removal of FIPB. So if we remove one law and come up with another law, it is going to be crazy. So basically, it has made a beginning, let us see the implementation.

The job creation has to come out from the negative right now. So as of now, what I see is that the manufacturing industry is not going to be that job creative tomorrow morning. Perhaps, pumping money into the rural and agriculture sector is likely to bring back some jobs on the agriculture sector. Building roads and trains will also bring some jobs at the bottom of the pyramid.

Saugata Gupta, Managing Director & CEO, Marico Limited

THE Budget is forward looking, consistent and pragmatic with overall focus on broad-based growth. We expect it to boost consumption, create more jobs especially in the rural and infra sector, given the thrust provided by the government to agriculture, MNREGA, infrastructure and rural productivity. The impetus given to digitisation of the economy, coupled with the implementation of the GST, will lead to higher compliance and will help organised players in the sector. This Budget is likely to provide the much required stimulus for reigniting the consumption growth after a slump caused by demonetisation.

Som Mittal, Former President Nasscom
I think the pre-Budget expectations were large. The Budget will not be able to stimulate private investment. The tremendous expectations on change in corporate taxes were not delivered. I am also disappointed that they continue to use surcharge, as a means to increase taxation. Oil prices have been falling for two years, but the government has not passed on the benefit to oil companies. It has instead, increased the excise duty. And now oil prices are flaring up.

The FM didn’t mention how he was going to reduce government expenditure, or create more jobs in a more sustainable manner. This Budget is about throwing more freebies and subsidies (to the people).

I would rate this Budget 6 out of 10, because it was the last opportunity the government had, to call it a show before the elections. The next Budget will also be a populist one. This government has taken some bold steps like demonetisation, but it has not been able to make an impact on the whole system.

Industry leaders spoke To BW Businessworld’s Monica Behura, Abid Hassan, Naina Sood, Soumya Gupta and Taniya Tikkoo