Finance Minister Piyush Goyal proposed the interim budget on Friday.
Goyal's speech had sufficient points to be labelled as a populist one. There was something in it for agriculture. A proposal to increase tax rebates for salaried class with salaries up to Rs 5 lakhs too received a thumbs-up. FM Goyal also pitched for pension for unorganised sector wage-earners.
While announcing his budget speech, Goyal reiterated that this was an interim-budget, and the conventions of such a budget do not allow proposing sweeping orders. But Goyal still managed an hour and forty minute long budget speech, the longest interim-budget speech in history.
Although a few expectations remained unaddressed, overall India Inc seemed to be happy with the announcements. Here is what India Inc thinks about the interim budget of 2019-20.
Anand Mahindra, the Chairman of Mahindra Group, considered as the most active businessman on Twitter shared his opinions.
I was bracing for a populist,profligate budget driven by 'election panic.' I'm just grateful that the reliefs to the key middle class & farmer segments were delivered in a measured way without risking bankruptcy of the economy. This was a controlled, pump-priming exercise...— anand mahindra (@anandmahindra) February 1, 2019
Before any discussion on the numbers around the budget, it's clear that if anyone were to ask 'How high was Piyush Goyal's Josh?' the answer would not be in doubt...— anand mahindra (@anandmahindra) February 1, 2019
Harsh Goenka, Chairman at RPG Enterprises tweeted a humourous tweet on the budget.
A volley of sixes, a victory for farmers and middle-class, two major pillars of our economy. Balancing both hosh and josh, the Budget will stimulate consumption demand and alleviate lives in rural areas. The stadium reverberates with Modi applause. Markets rejoice. So do I.— Harsh Goenka (@hvgoenka) February 1, 2019
Kiran Mazumdar Shaw, CMD at Biocon felt that the budget had something in store for everyone.
Welcoming the budgetary proposals, industry body Confederation of Indian Industry (CII)President Rakesh Bharti Mittal said: "The measures announced in the Budget are likely to provide a significant impetus to consumption spending in the economy, which will boost growth in the near to medium term."
"In an astute balancing act, the Finance Minister has presented a budget, which addresses issues of every segment of society. This a true people's budget".
However, K.G. Purushothaman, Partner, Advisory, and Telecom Leader at KPMG expressed concerns for the telecom sector. "With a strong focus on overall fiscal growth of the Indian economy, the telecom sector remained forlorn in the interim budget 2019."
Purushothaman said that the telecom sector, despite being the foundation ground of the digital India, remained wanting for critical support needed by the sector to reinvigorate itself. The ailing telecom sector had huge expectations from the budget in terms of relaxation and reduction of huge taxes and levies paid by them. Adding that the significant financial distress faced by the sector due to huge debt pile up and the impending infrastructure spend which is estimated to be over Rs 1 trillion, the industry was expecting a financial relief and resolution of some disputed issues like SUC (Spectrum Usage Charge).
Hailing the announcement of an assured Income Support Scheme for Small and Marginal farmers, Rajnish Kumar, Chairman, SBI said: "The Union Budget for FY 19-20 is growth oriented and forward looking in nature... Interest Subvention announced for farmers pursuing Animal Husbandry and Fishery will provide a fillip to this sector".
"Raising the full tax rebate up to Rs 5 lacs will surely be welcomed by country's emerging middle class. We believe, this will further strengthen the purchasing power of the growing middle class thereby providing a welcome fillip to the economy at large."
B.K. Goenka, President, Assocham explained that India is an agrarian economy and has the largest number of people depending on it. "The PM Kisan Samman Nidhi where Rs 6,000 assured income benefit would be provided to all farmers with land holding of less than 2 hectares would encourage small farmers to continue in the field."
"An additional 3 per cent interest subvention to farmers repay loans on time would also encourage timely repayment of bank loans," he added.
Sandip Somany, President, FICCI said: "It is a progressive budget that addresses both the current challenges being faced by the economy as well as presents an outline of the vision the government has for the future of India ten years ahead".
"It's good to see the focus of the interim budget on rural sector, middle class. More money in the hands of rural and middle class is good for driving consumption in the country And hence good for economic growth." said Kalyan Krishnamurthy, CEO Flipkart Group.
"More and more local MSME manufacturers and sellers can cater to this increased demand from rural, tier 2-3 towns and we at Flipkart marketplace will be happy to support thousands of such sellers to access the consumers cost effectively and efficiently."
Dhiraj Relli, CEO at HDFC Securities said, "This Budget has not caused any major disappointment; also it being interim in nature, we can safely park any questions on missed opportunities. To be honest, the budget presented today might have exceeded the expectations of many market analysts and evaluators.
"The allocation towards alleviating farm distress at Rs.75000 cr per annum is much less than expected, transfer expected from RBI is also not unusually high. The push to consumption by way of sops to farmers and middle class families has resulted in buying in Auto and FMCG stocks."
"GST collections growth at 18.3% may seem a bit aggressive, while net borrowings remaining flat at Rs.4.48 lakh cr in FY20 may also be challenging given the risks due to slowdown fears. The markets will over the next few days take their own trajectory after this small time window of anticipation of and reaction to the Budget."
According to Mr. Amar Ambani, President & Head of Research, YES Securities, ""If Math adds up, i.e. they can generate revenue to fund, then this is a positive budget."
Ambani in a note said that the support to farmers, middle-class and small businessmen (MSME) were expected. Outside of the budget, lifting of PCA norms on 3 PSU banks was excellent news for improved credit access. The Sensex had soared by over 600 points after end of trading hours on Friday. Ambani explained, "Markets are also rejoicing, bcause the fear of over- populism impacting the fiscal math has not materialised."
Dinesh Kanabar, CEO at Dhruva Advisors, explained, "The proposal to give a rebate effectively providing that those earning less than Rs 5 lakhs (post incentives on savings) is welcome jump instead of the marginal tinkering we have seen in the past. While it is a populist move, it will result in increased consumer spending. "
Real estate sector seemed to be happy with the budget proposals. Kanabar explained, "The extension of tax holiday for affordable housing, the doing away with notional rent for two houses, the capital gains tax exemption for investment in two houses and the non taxation of notional income on unsold inventory for two years are all welcome relief."
Chartered Accountants across the country felt proud that a fellow CA had created history, becoming the first CA to present the Union Budget.
Startups, however seemed to be disappointed. Prior to the budget, the aspect of angel tax had created a huge fear in their minds. There was no mention of Angel-tax. "Although this was an interim budget, I had hoped for some relief on Angel Taxes and measure for employment generation," said Kanabar.
Manas Mehrotra, Chairman at Incubex NestaVera, a company offering co-working solutions was disappointed about the aspect of angel tax. Although he was happy about the policies that could improve the overall growth of the economy, he felt startups, especially those in the coworking sphere were left out of the budget.
He said, "Coworking firms were expecting that the government would curb or altogether eliminate Angel tax this Union budget as it would enable the firms to lease more spaces for start-ups, enterprises, MSMEs and entrepreneurs. Angel tax would hurt the start-up edifice and indirectly co-working firms would desist from leasing co-work spaces. Angel funding is now being considered as income and is being taxed at the full income tax rate of 30 per cent. This will detract higher investment in co-working spaces."
Tejas Parulekar, Co-Founder at SaffronStays, a startup from the travel and logistics sector said this budget supported women. She said, "It is encouraging to see the support that the government wants to provide to the women in India to join the workforce and the 3% tax benefit for the women owned MSMEs is a big boost for the women entrepreneurs in the country. Women today are valuable resource pool for the Indian workforce. Supportive and inclusive initiatives which are supported by the government are likely to spur more active participation of women in India's growth story."
The interim-budget announcement on Pension was cheered by many, but the Indian Staffing Federation had mixed responses.
Rituparna Chakrabarty, President for Indian Staffing Federation pointed out a few unmet expectations. "Whilst the Indian Staffing Federation had several expectations from this year's budget - we did not see specific actions that would improve ease of doing business, employability and formal employment – our asks around UEN, Paperless, Presenceless, Cashless initiatives for Shram Suvidha Portal, reduction of financial burden on the employers who now have to pay for 26 weeks of maternity benefits, employees having the choice and flexibility on salary and reduction of GST on outsourced services for higher education – have not been addressed," she said.
However, she also added, "Having said this, what is heartening is to see the government take a long-term view of growth and outline its vision for 2030, vide its 10 developmental themes. We also think government's focus on simplifying GST and tax administration, investment commitment for improving rural economy, internal trade, infrastructure and the MSME sector will be good for the Indian economy. This augurs well from an employment perspective – and we hope this helps in creation of more formal jobs – which is will not only aid the growth of staffing industry in India but also spur the overall economic progress."
The full budget for 2019-20 would be presented post the elections. It is likely that some of the unmet expectations may find some place in the full budget.