India Inc and experts react to Finance Minister Arun Jaitley's maiden full-year Budget for the 2015-16 financial year. Here's what they have to say:
Sumit Mazumder, CMD, TIL; and President-designate, CII:
"It is a Budget for the country. We have had budgets where they said it is a budget for the aam aadmi or the industry. All budgets were classified. This Budget can't be classified. It has looked at what is good for the country and has gone after it. Let's take manufacturing. It is only 15 per cent of the GDP and the target is 25 per cent. We need to create a demand for it. The easiest way to create demand is to get the infra going. Because if the infra demand grows, the commodity demand goes up, so does the equipment demand. It will also generate employment. Importantly, because of the demand, it would energise investments. There are two more things to support investments. One is the reduction of taxes (corporate taxes from 30 per cent to 25 per cent in four years), which means more disposable money for investments. Second is the bankruptcy law. Investors had the fear that if something goes wrong, they don't have a way out. Now, there will be a lot more confidence. The other aspect is labour who had no social protection, which is why labour laws couldn't be changed. But now they have created a safety net - it says that there will be a pension for them, there will be insurance. We can now, perhaps, look at changing the archaic labour laws." (As told to Goutam Das, Anilesh S. Mahajan and Manu Kaushik)
Kiran Karnik, former chairman, NASSCOM:
"What I liked is that he started with a vision. Second, there were a few things about technology that were positive. The self-employment and talent utilisation (SETU) scheme recognises that entrepreneurship and start-ups are important part of it. It would lead to job creation rather than just job-seeking. It comes at the right time because there is lot of enthusiasm in the country with regard to start-ups. There was also a passing mention of innovation. The future will be about innovation. Third, from the point of view of technology, were the mention of broadband and the scheme of getting 250,000 panchayats connected. It has fallen behind but now they will accelerate it. That is part of the infrastructure for digital India. I think there is recognition to leverage technology. One negative is the move from wealth tax to taxing rich people by adding a two per cent surcharge. Wealth tax is for wealth you store - it is like a stock and it can be inherited. But income tax is on the income you earn. That's a big difference. You have a young start-up that does well. I would credit them more than those who have inherited wealth. I am not happy about this conceptual change." (As told to Goutam Das, Anilesh S. Mahajan and Manu Kaushik)
Radhika Ghai Aggarwal, Co-founder, ShopClues:
"Hiking the service tax to 14 per cent is a dampener for e-commerce, which is predominantly service-oriented, since it would increase the cost of operations. Also, increase in excise to 12.5 per cent would impact prices of goods sold. But overall, it's a progressive Budget. The assurance to speed up GST implementation is a welcome announcement for the industry as it will boost the country's manufacturing competitiveness. Rate of corporate tax to be reduced to 25 per cent over the next four years is long-term step and would help companies in India to be more competitive in long run. The Budget has reinforced the Modi government's progressive and liberal stance that will fuel GDP growth and will drive up the global investors' sentiment for India."
Ajay Garg, Managing Director, Equirus Capital:
"The Finance Minister has done a good job in balancing various expectations, given the limited fiscal space he had this year. Although the market was expecting a fiscal deficit of 3.5 to 3.6 per cent, we can do with 3.9 per cent as that additional Rs 50,000 crore spend in infrastructure will help kick start the investment cycle, which is very much needed. We like the innovative way the FM is going about the gold bond and gold loan credit, if this is followed through it will help bring down the current account deficit and correcting that will help the rupee in the long term. Clarity around GAAR, DTC and clarifying PE treatment for overseas funds will help improve the perception around administrative challenges of investing in India. Also, if Parliament passes GST in this Budget session, the government would have achieved lot of milestones around taxation policies."
Ratul Puri, Chairman, Hindustan Power Projects:
"The Budget has put forward the government's vision, it wants people to learn fishing, than to catch fish for them. It is inclusive, yet a very practical and balanced Budget. The overall vision of the government is encouraging for the industry, and addresses the challenges they face. The tax-free infrastructure bonds, national infrastructure investment fund, all this would not only de-bottleneck the financial institutions, but would also provide the fresh capital, and can spur next round of growth." (As told to Goutam Das, Anilesh S. Mahajan and Manu Kaushik)
Anshuman Magazine, Chairman and Managing Director, CB Richard Ellis (South Asia):
"There are some very good announcements but many things were missed by the Finance Minister. The good part is REIT (real estate investment trust). It is major area which can be a game-changer for real estate and infrastructure sectors. The two major issues with REIT were capital gains and dividend distribution tax. He has addressed both. However, the fine print would have to be read because there are many issues on the tax side on the REIT front. But it seems the government is ready to discuss to remove all the issues so that REITs can function in India. In addition, he has given a lot of emphasis to infrastructure. Real estate and infrastructure sectors need long-term capital, and one of the ways to get long-term capital is through more financial instruments in the sector. The announcements of developing a bond market will go a long way in mobilising more money into the sector. However, there was nothing on special economic zones and industrial parks. When you talk about 'Make in India', these things should have been encouraged. There was no talk of smart cities project. On the housing side, people were expecting tax exemption on housing loans. So, there were no direct sops. I would say that for the real estate industry, except REIT, there were no direct announcements as such." (As told to Goutam Das, Anilesh S. Mahajan and Manu Kaushik)
Adish Jain, Age: 30 years, CEO, PR Genes (a PR agency):
"Setting up of a new Mudra Bank and reduction in corporate tax heralded FM's efforts to create an entrepreneurship-friendly budget, urging inclusive growth. On the other hand, increase in service tax dampens the confidence that this budget invokes, especially amongst the SME & MSME sector. I hope it delivers the economic progress that the nation wants and lives up to fostering a conducive business environment"
Reetika Garg, Assistant Professor, Delhi School of Economics:
"The Budget does have many long-term economic reforms when it comes to infrastructure. But I was a little disappointed with what it has announced of removal of subsidies in general. Given that the government has come with majority, there were greater expectations on this front - especially for the removal of petrol subsidy. Of course, now the international petrol prices are down, but how will they deal with it when they go up? I also found it lacking when it came to measures on agriculture. For instance, I was expecting some kind of foreign direct investment that would have allowed more technology and productive measures to come into this space. But barring these factors, I think this Budget has been good in taking steps to tackle the black money issue and also how it has sought to ease into GST."