The Union Budget day saw the who's who of the business world congregate at the Indian Merchants Chamber (IMC), Churchgate.
Eyes glued to the TV screen, dapper CEOs and Managing Directors (MD) of top companies in crisp suits scribbled furiously on notepads, nodding their heads as Finance Minister Arun Jaitley presented the Budget. Positive announcements, like the removal of applicability of DDT for real estate and increase in HRA limit, saw smiles all around, each negative or unexpected announcement elicited a collective sigh.
Deepak Premnarayen, Executive Chairman, founder, ICS Group.
"The budget has several good components like the boost to agriculture through schemes like crop insurance, mandi connectivity and roads program. However, the Finance Minister missed out on the banking sector. He had an opportunity to go in for a 'good bank-bad bank'. Equity cannot be raised in capital market and liquidation is also difficult. Given the assets we have lying with banks, we had an opportunity to consolidate them and take it for funds."
Bakul Mody, co-chairman, Indirect Taxes Committee, IMC
"We were expecting the Finance Minister to focus on small taxpayers, whose threshold is Rs 10 lakh, since 2008. but he did not touch that. A new dispute resolutions scheme that has been announced should be good. Overall, it is a good budget, but the Minister missed out some major expectations."
Deepak Doshi, chairman, MSME committee, IMC
"Macro-wise, this budget is a game changer since the boost given to agriculture and rural areas can trigger off a huge snowballing effect. Demands for retail sector will see a boost and cause sales to jump. As far as Micro Small and Medium Enterprises MSMEs are concerned, they have no big ticket in this budget. The 1 per cent corporate tax deduction is also an eyewash. Apart from the corporate dividend distribution tax, those with a dividend income of more than Rs.10 lakh will be charged additional tax at the rate of 10 per cent, which was unexpected, and has resulted in the stock market reacting negatively. Now in effect, this will amount to double taxation."
Niranjan Hiranandani, managing director of Hiranandani Group
"The 100 per cent deduction for profits in housing projects for flats up to 30 sq. meters is too small for metros. On the positive front, those companies that have assets on rent and were waiting to liquidate those assets will be able to do so, since the long-pending demand of real estate sector to remove applicability of DDT on real estate investment has been met. Agriculture has benefited greatly, for which the government deserves applause. The seventh pay commission has increased the Housing Rent Allowance (HRA), so by increasing the tax deduction limit to Rs. 60,000 per annum from the current Rs. 24,000 on housing rent, salaried individuals will also benefit indirectly, which is a welcome step."
Sanjay Kirloskar, Chairman, CII Western Region
"With adequate focus on farming, social sector, infrastructure and fiscal prudence, the Union Budget 2016-17 is broad-based. The target to double farmer’s incomes by 2022 is ambitious and higher allocation for irrigation schemes and crop insurance will positively impact the sector going ahead. Increased thrust on government investments in infrastructure will aid economic growth now that private sector investments are subdued. Substantial enhancement in allocation to Gram Panchayats and municipalities will empower them and help accelerate development."
Chandrajit Banerjee, Director General, CII
"The Finance Minister presented a well-rounded package of reforms and growth-oriented measures in the Union Budget 2016-17. The Budget proposals addressed issues in nine critical areas ranging from agriculture and the rural sector to financial sector and banking. Given the current global context of slowing growth and threat of financial turbulence, the Budget needs to be commended for giving a boost to growth and investment without disturbing the path for fiscal consolidation. In line with recommendations made by CII, the Budget has announced critical interventions in areas such as agriculture, infrastructure, education and skills. Financial sector reforms have been taken forward including a plan for revitalising public sector banks. A lot of emphasis has been given to accelerated implementation of direct benefits transfer through the widespread use of JAM trinity, so that subsidies reach the intended beneficiaries. The well-thought out interventions presented in the Budget make it a growth and development oriented Budget."
Soumyajit Niyogi, Associate Director - Credit & Market Research Group, India Ratings & Research.
"Room for RBI rate cut opens up, as early as in the April 2016 policy meeting, following government sticking to both FY16 and FY17’s fiscal deficit target. Additionally, the ongoing supply pressure in bond market is likely to ease in the near term- as government budgets for net borrowing of INR 4.25 trn in FY17 via dated securities (compared to INR 4.41 trn FY16 RE). This along with intent of enacting Insolvency and Bankruptcy Code is likely to benefit domestic bond market outlook as well as have salutary positive impact on currency."
"Closer look at the fiscal arithmetic suggests that government continues to be optimistic in its outlook – projecting a 11% growth for FY17 (nominal) against global slowdown. On the revenue front, reliance on high double digit growth in income tax, big ticket non tax revenue may warrant caution- proceeds from spectrum sale is budgeted at INR 990bn while total proceeds from disinvestments and strategic sales is expected to earn INR 565bn."
"Although budget FY17 stuck to the road map presented earlier, it has announced constitution of a committee to review the implementation of the FRBM act with a view to make it more dynamic and counter cyclical. This will give government more elbow room to undertake growth boosting measures while adhering to fiscal discipline. Consequently, fiscal targets and its implementation during upcoming years may undergo a change. The union budget FY17, has also provided the structure of monetary policy committee with 3 members each from government and RBI. RBI governor will have the deciding vote in case of a tie. Ind-Ra believes while this arrangement will facilitate the two way flow of thinking and result in a better synchronization of monetary and fiscal policy, it will also protect the supremacy of RBI in case of monetary policy.”
Arun Ganapathy, CFO, Spykar Lifestyles Pvt Ltd
"Budget 2016 doesn’t augur well for the apparel retailers. Excise Duty which was withdrawn in Finance Bill, 2013 has again been imposed on Branded Readymade garments with MRP of Rs. 1000 and above under two options - 2% tax without input tax credit and 12.5% with Input Tax Credit. The tariff value has also been changed from 30% of MRP to 60% of MRP. This would be an additional cost on apparel players. Krishi Kalyan cess of 0.5% which will be imposed effective June 1, 2016 is an additional impact for us. The non-litigious approach proposed by the Finance Minister is a welcome move. It will reduce the time spent on tax appeals and litigations. Also, as we are in the discretionary spend sector, no increase in personal income tax slabs or any major tax benefit for the common man is a negative for us as his net cash flow has not improved."
Ashish Mehrotra, CEO&MD, Max Bupa Health Insurance
"This year’s 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. The government has announced a universal health insurance programme that will cover the BPL population. Given that the category is seriously underpenetrated, this will provide health protection to one third of the country’s population. With this scheme, the existing health coverage limit for BPL families (Rs. 30, 000 under RSBY) has been significantly increased, with the provision of one lakh health coverage for each BPL family. This will boost health insurance penetration which is currently under 5% and mostly restricted to urban areas, curtail OOP expenses, stimulate industry growth and provide access to those below the poverty line to avail quality healthcare."
"An additional top up cover of Rs 30, 000 for senior citizens will help extend adequate coverage to the elderly, who are more likely to utilize the health cover. This is an important move given that, at present, there is no such scheme that exclusively entitles health protection to senior citizens. As a committed healthcare partner to millions, we look forward to partnering with the government to make quality healthcare accessible and affordable to all."
"These are pertinent measures given the double digit increase in health inflation year on year. In the long term, these steps will help curtail issues like escalating healthcare expenditure and control personal insolvency rates in a developing economy like ours and boost our GDP."
A Vellayan,Executive Chairman, Murugappa Group
"The emphasis given to Irrigation, Soil Health, increased use of organic fertilisers and developing a Unified Agriculture Marketing e-platform are steps in the right direction. The reduced excise duty on micronutrients will help its wider application. The creation of the dedicated Irrigation Fund with an initial corpus of Rs. 20,000 crores will help to increase the overall area under irrigation over the long term. The increased allocation to MGNREGA & the announcement of Rs. 5500 Crores under PM Fasal Bima Yojna are welcome moves. The Government is also piloting the Direct Benefit Transfer for Fertiliser to curb leakage. However, the much-anticipated demand of increasing urea prices to help in balanced nutrient use has been given a slip."
"The Price stabilisation fund created earlier for Sugar, has been now extended to Pulses. We look forward to a similar support in the coming years for other critical crops as well. The Finance Minister has also ensured fund availability for these schemes, through the Krishi Kalyan Cess."
"In the Financial Services sector, we welcome the announcement allowing tax deduction in respect of provisioning of bad & doubtful debts. We hope that the amendment of the SARFAESI Act and the Bankruptcy code will strengthen the Financial Services industry. We look forward to the notification of SARFAESI Act on Housing Finance, announced in the last year’s Budget, to be expedited."
"There is continued focus on financial inclusion by the announcement of ATMs & Micro ATMs in post offices. The Government’s plan to list Public Sector General Insurance companies in Stock Exchanges will help strengthen the General Insurance Sector."
"The announcements for settlement of pending taxation matters will help resolve long overdue cases, and the simplified process of declaration of undisclosed income is likely to bring in new tax payers."
"From an infrastructure perspective, the increased focus on construction of roads and highways, creating an enabling ecosystem for Public-Private partnerships for projects and easing the passenger traffic system by creating avenues for more operators, will have a positive cascading effect in the overall economy."
Rajesh Magow, Co-Founder and India CEO, MakeMyTrip.com
"The Finance Minister today announced that 160 non-functional airports will be developed at a cost of Rs 50-100 crore each. This is a welcome move as it will improve connectivity within the country especially in tier2 and beyond towns and cities and thereby, help boost the travel and tourism industry. The budget also proposed to increase the excise duty on Aviation Turbine Fuel from 8% to 14%. The financial health of the aviation industry of the country was just beginning to stabilise but this move will have some adverse impact on the demand side for the industry. Lastly, service tax has now been increased to 15% from 14.5%. Krishi Kalyan Cess at 0.5% will be levied on all taxable services. While it is understandable that this move is aimed towards financing initiatives for improvement of agriculture and welfare of farmers, this will lead to paid services becoming dearer. Worth mentioning that service tax has been consistently increasing over the past few years, it stood at 12.36% in 2013-14. Not only will service based companies but also the end consumer of the services will bear the brunt of this move."
Chirag Haria, CEO of Aarogyam Energy Jewellery
"The overall Union budget 2016-2017 is an optimistic step by the government for entire e-commerce and start-ups industry. We welcome the recent developments and applaud the government's decision to support start-ups by increasing limit for 44AD from 1 crore to 2 crore, this will help start-ups to efficiently focus on work rather taxations."
Rajeev Vyas, Director of Steel Users Federation of India (SUFI)
"It's a positive budget as neither import duties nor vat has been tweaked. Increase rural spending and exemption on house rent will improve housing sector and thereby giving a boost to steel consumption. As steel users apex body SUFI would have liked if issues pertaining to MIP, Safeguard duties and BIS were addressed in this budget and some relief was given to users of steel as the protection for Steel Plants has been given which was also necessary. The Govt. has to strike a fair balance between the legitimate needs of steel user industry as well as steel producers."
Adarsh Chilukuri, CEO of Bulkhouse Trading India Pvt. Ltd
"Modi's new Start-ups India is an excellent and an encouraging move to enable the entrepreneur’s to stand up for themselves and to change traditional Indian trade to a modern e-commerce country. It’s also quite interesting to see how the agricultural sector, which contributes a major part in the Indian GDP, has been emphasized in the current budget. With increased support through more funding sources, insurance and infrastructure, the Indian Agricultural business is set to boom. The e-commerce schemes announced in these lines is the most desirable way of on enabling the farmers to sell their produce at a fair price and even the end customers will get to purchase it at a relatively lesser price. Knowing that the logistics industry has not received the desired attention or recognition in India, it’s good to see how the Infrastructure is set to build up rapidly especially with more road networks which will enable timely movement of goods. Overall the Modi government has set an extremely encouraging budget for Indian market to keep the engines running even faster when the global markets are melting down. India could take a major advantage of the current International economic situations and emerge as a new leader in the global market.”
Brijesh Lohia, Managing Director of Global Ocean Group
"Just the fact that the Finance Minister used the word 'warehouse' more than 10 times indicates the Union Government Focus on warehousing and logistics. The move to set up logistics support to E-Commerce players by providing designated pick-up centres at identified stations. It would offer supply chain and E-Commerce industries and alternative to the expensive air cargo that they now rely on for delivery. Rail cargo will be very much cheaper than the existing rates. Increasing 24x7 customs clearance at ports and airports with a solid intent to implement goods and Service Tax (GST) in the coming year. Introduction of GST has been given a thrust."
"This Budget promises to address several issues faced by the roads, power , ports and airport sector. The proposed huge financial investment into NHAI and State Roads and a specific focus on development of select expressways in parallel to the development of industrial corridor will improve overall infrastructure, connectivity and lend efficiencies to supply chain."
"To develop inland navigation in certain areas will showcase newer opportunities and cost advantages to the industry. There is a decision to increase public investment in infrastructure development including National Highways. Better service connectivity will provide better speed and cost effectiveness for the logistics service provider and consumer alike. The logistics sector gets a boost with railway budget emphasizing on augmenting freight handling capacity through a slew of measures increasing the speed of trains, transport development and multi-modal depots is bound to improve connectivity and efficiency with airports and railways."
- Compiled by Team mid-day
Kareena Kapoor Khan looks in fab shape after weight loss! See photos
Mumbai food: 9 dishes to try during 9 days of Navratri
Photos: Hrithik Roshan, Nidhhi Agerwal and Adah Sharma walk the ramp
Photos: Shah Rukh Khan spotted with new set of wheels
Photos: Kareena Kapoor Khan, Kangana Ranaut at the Mumbai airport