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Budget 2019: India Inc says it will boost economic growth

Finance Minister Piyush Goyal with MoS Finance ministers Shiv Pratap Shukla and P Radhakrishnan leaves the North Block to present the interim Budget 2019-20 at Parliament. (PTI Photo)

The corporate giants welcomed the interim Budget presented by the central government on Friday, calling it a balanced budget which will stimulate demand and boost economic growth without subverting the economy. Some market leaders, however, also showed concerns over the revenue side taking a hit due to the tax rebate provided to the middle class.

Here is how the market leaders reacted to the interim Budget:

Gautam Adani, Adani Group Chairman and Founder: "India’s middle class, small traders and farmers are the lifelines of its economic growth. By catering to these ambitions Budget 2019 infuses hopes for millions of dreams."

Anand Mahindra, Mahindra Group Chairman: "I was bracing for a populist, profligate budget driven by ‘election panic’. I’m just grateful that the reliefs to the key middle class and farmer segments were delivered in a measured way without risking bankruptcy of the economy. This was a controlled, pump-priming exercise."

Chandrajit Banerjee, CII Director: "The Budget for 2019-20 touched the right notes for stimulating demand and growth in the economy. By strongly addressing the major consuming sections of society such as farmers, the middle class and unorganised sector workers, it aims to stabilise incomes and reduce risks for vulnerable people."

Krish Iyer, Walmart India President and CEO: "The Budget rightly focused on the middle class, rural sector and on enhancing farmers’ income."

Sunil Duggal, Dabur India CEO: "The Budget 2019 can be summed up as "a series of sops" for the middle class, farmers and millions of employees in the unorganised sector."

Simon George, Cargill India President: "There was quite a strong rural economy and agri push in the interim Budget. We are particularly optimistic about the central government-sponsored PM Kisan Yojna, the Direct Benefit Transfers to small-holder farmers. Though a lot more can be done but nevertheless a good move that will help farmers align better with the market."

Sunil D’Souza, Managing Director, Whirlpool India, termed the budget as a forward-looking one and said it is expected to increase liquidity in the hands of the consumer. "Along with the recent reduction in GST on appliances, this anticipated increase in consumer spending can be a catalyst for higher demand in our sector," he added.

Sudhir Rao, Bombardier Transportation India Managing Director, stated that the Budget highlights the outlaying of investment opportunities, improvement of operating ratio and introduction of new semi-high-speed trains elicits the vision to transform the rail experience for Indian commuters.

Harsh Pati Singhania, JK Organisation Director: What is laudable is that higher sops and outlays were provided without additional levies on corporate and high-income earners, and without any significant breach on the fiscal front.

Souma Das, Managing Director, Teradata India: The investment proposed by the government in the field of Artificial intelligence and allied technologies will pave a strong foundation for making a revolutionary transformation in the scope of governance and the opportunity to provide seamless and improved citizen services experience.

Lakshmi Iyer, Chief Investment Officer (Debt) and Head Products, Kotak Mahindra Asset Management Company: The key focus among other things for bond markets was the fiscal math. While the fiscal deficit as per cent of GDP has been pegged at 3.4 per cent, the gross borrowing program of INR 7.10 lakh crore has spooked market sentiments. The market is also worried about how the revenue side estimates will actually pan out. Additionally, a key to note is that 60 per cent of net government supply in FY19 was cushioned by RBI OMO bond purchases. Uncertainty on how much would be the quantum of OMOs and will they actually be needed will be an uncertain sword hanging in the market.

Harshil Mathur, Co-founder & CEO, Razorpay: Commitments such as setting up 1 lakh digital villages in the next 5 years will go a long way in improving financial infrastructure and inclusion for these under-served geographies – we’re already witnessing the impact of few of the efforts taken. This is especially beneficial for companies which are focused on MSMEs and inpiduals.

With reduced tax and higher disposable incomes, we see them spending more online as compared to the generation before. However, the Indian millennial is also concerned about wealth management and investments. And so, with a rise in disposable incomes, the adoption of mutual funds will rise in 2019, it will be interesting to watch how the mutual funds industry will influence the digital payment ecosystem this year.

Rahul Patni, Partner & Tax Digital Leader, EY India: Rural digitisation, once achieved, is expected to have fundamental positive impact in the way economy operates. Further technological enablement of tax administration with measures as 24 hours return processing, faceless e-assessments, etc., will increase efficiency and transparency, and also help increase tax collections.

Paresh Parekh, Tax Partner, EY India: Digitisation and automation is the new mantra – online income tax compliances, online tax assessments, automated return processing, single point approval for carrying out manufacturing activities and processes in warehouses, Full and comprehensive digitalization export/import transactions by leveraging RFID technology, etc., are highly impactful on how businesses interact with government authorities.

Rajiv Chugh, Tax Partner, EY India: Would like the legislator to look at the Information technology/Information technology enabled Service (IT/ITES) sector. As per NASSCOM, Indian IT/ITES sector has weathered uncertainties in the global business environment to reach a significant milestone-aggregate revenue of over USD 150 billion. Without a doubt, the IT/ITES sector has become one of the most significant growth catalysts for the Indian economy but its growth seems to be stagnating with alternate jurisdictions coming into play.

Surendra Hiranandani, Founder and Director, House of Hiranandani: The rise in inpidual tax exemption up to Rs 5 lakh will impact consumer sentiments positively. The tax savings that the salaried class stand to benefit will lead to higher consumption including investments into residential real estate.

Amongst the notable announcements for the real estate sector, the decision to eliminate tax on notional rent on second self-occupied house is a welcome move. This will prep up demand for second homes substantially.

Relaxation of notional rent on unsold inventory to 2 years will also ease burden on developers, who now have more time to sell their projects. Continued thrust on affordable housing through tax benefits on projects allows for expansion of this class of the asset even further. The benefit of exemption of capital gains up to Rs 2 crore for investment in two houses will increase sales in the residential sector.

The decision to grant significant capital for rural development and infrastructure is a step in the right direction. The impressive development of roads, infrastructure over the last five years has been significant and if the same momentum is continued then the increased connectivity will have a positive rub off on all segments of real estate including commercial and industrial developments.

Dr Subho Ray, President, IAMAI: The announcement of National Artificial Intelligence portal is expected to propel India on the path of leveraging advanced and disruptive technologies for growth and economic prosperity and growth.

Rajesh Agarwal, co-Founder, Micromax: The emphasis on establishing a programme to bring in direct efforts towards building a holistic ecosystem for Artificial Intelligence is an impressive development. The government's announcement around expanding Common Service Centres and creating digital infrastructure in the villages will be a significant step in the Digital India mission and growth of the Make in India initiative. With India leading the consumption of voice calls and mobile data usage, it is fascinating to note our constant progression towards becoming a global hub for manufacturing.

Ola Mobility Institute: We welcome the budget’s impetus on revolutionizing the transportation and energy sectors with a holistic industry-wide focus on electric vehicles, energy storage, and renewable energy. This clean and green India initiative will secure and strengthen the economy by reducing our dependency on fossil fuels. With such government support, 2019 could be the start of an era that witnesses rapid electrification of high utilisation vehicles, i.e. shared mobility solutions such as public transit, commercial vehicles, three-wheelers, delivery services, etc.

Bipin Preet Singh, Founder and CEO, MobiKwik: This Budget is a boost for India's fintech companies, and we are now very hopeful that the government would continue to drive the industry with its forward-looking policies and policies intervention. The interim budget has announced major incentives for farmers and industrial workers, which will help in boosting their affordability and spending, especially in rural India and in turn, help in expanding smartphone users and digital penetration within the masses.

The budget also highlighted that mobile data has increased 50 times in the last five years. This is a fantastic piece of news for fintech companies like ours, as we will be able to reach out to the masses, beyond urban India and make a huge impact on driving financial inclusion.

Venkatraman Swaminathan, VP and Country GM, IT Division- India and SAARC, Schneider Electric: The commitment towards setting up of 1 lakh digital villages in the next 5 years is sure to benefit the small & mid-size industries that form the backbone of the Indian ecosystem. This would result in the overall expansion of rural industrialisation by harnessing digital technologies.

Sanjiv Puri, Managing Director, ITC Ltd: The Interim Budget proposals should augur well for the Indian economy by providing a growth impetus through a boost in consumption as well as an inclusive framework designed to benefit agri and rural communities, unorganised sector workers as well the middle class. The PM Kisan Samman Nidhi programme, the move to set up 1,00,000 digital villages and the increase in allocation to rural infrastructural development will indeed go a long way in enabling empowerment of rural communities.

Sunil Jose, Senior Area Vice President, Salesforce India: We are delighted and welcome the government's visionary step to support and democratise access to AI and related technologies.

V Ramakrishnan, CFO, Tata Consultancy Services: The budget strikes the right balance between progressive initiatives and fiscal prudence, and merits an 8 out of 10.

(With inputs from PTI)