The interim budget presented by officiating Finance Minister Piyush Goyal was an out-and-out election budget as the BJP-led NDA government sought to made a strong re-election pitch. While the Lok Sabha elections are set to take place in a couple of months, Goyal converted his vote on account speech in the Lok Sabha into a full- fledged budget announcement. The Budget 2019 reactions from different quarters will be interesting to hear as the FM announced sops for all sectors.
The Budget 2019 proposed an array of incentives for both middle class and farmers. Small businesses will save on income tax, with the exemption limit doubled to Rs 5 lakh from the current Rs 2.5 lakh.
The fiscal deficit for 2019-20 has been pegged at 3.4 per cent of the GDP, up from the fiscal consolidation roadmap of bringing it down to 3.1 per cent in 2019-20 and 3 per cent in 2020-21.
Here is how the industry experts and leaders reacted to Budget 2019.
Indroneel Dutt, Chief Financial Officer, Cleartrip: “The Indian travel and tourism sector which has emerged as a key growth driver didn’t see any concrete provisions in the 6th and final budget of the current government presented by Finance Minister Piyush Goyal. While the list of 10 most important dimensions that will guide the government in Vision 2030 mentions next-gen infrastructure and digital India the budget lacked clarity on allocations and how these could push the sector.
Mitesh Shah, Head of Finance, BookMyShow: “Some thrust on boosting the digital and payment infrastructure for sectors with big-ticket transactions like travel and a tax relief especially for indirect taxes (levied on the tourism and hospitality sector which is considerably higher than some of the major tourist destinations globally) is something that we were hopeful of hearing. We hope these in addition to a purview of GST in accommodation space is something that the government will bring to its consideration in the months to come.”
“The interim budget for 2019 has been a shot in the arm for several sections of the society through its tax relief measures for the middle class and mega schemes for farmers.
“We appreciate the budget’s recognition of India’s startup ecosystem’s contribution to the economy and the creation of a Digital India in Vision 2030 is indicative of the long road ahead for this ecosystem. The budget however, did not offer clarity on issues surrounding the angel tax much to the dismay of the industry’s expectations. Facilitating a conducive growth environment for such companies is key and hence, clarity around taxation and the regulatory environment will further help build a strong technology ecosystem which can contribute to the government’s vision of India as a $5 trillion economy over the next 5 years.
“It is probably for the first time in several years that the entertainment industry has been hailed as a force of employment generation. While the Finance Minister has offered incentives to the film industry, it is also worth recognising the huge scope that live entertainment offers, for employment and growth of the Indian economy. We hope that the GST Council along with the government can find solutions to streamline the existing tax structures for this sector as well and bring it below the current rate of 28%, to enable a well-rounded ecosystem.
“We whole-heartedly support the government’s move to curb piracy through the introduction of the anti-camcording provision in the Cinematography Act. With these measures, we expect the regulatory framework of the entertainment industry to significantly change for the better.
“There has been a slight slippage in the fiscal deficit for FY19 with the government having revised it to 3.4% from the earlier budgeted 3.3% of the GDP. While the Budget has offered various increases in outlays, no new policy to boost revenue found a mention by the Finance Minister. This may further strain the government’s ability to meet its fiscal deficit target and may have an impact on India’s credit rating. The introduction of a new Direct Income Support Scheme for farmers and subsidized agricultural loans are likely to boost the rural economy but the government may have to be watchful of possible rise in fiscal costs as a result of this.”
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. We commend the government for its vision to make India a world leader in sustainable mobility. With such government support, 2019 could be the start of an era that witnesses rapid electrification of high utilization vehicles, i.e. shared mobility solutions such as public transit, commercial vehicles, three-wheelers, delivery services, etc.”
Ritesh Agarwal, Founder & Group CEO, OYO Hotels & Homes: “This is the Budget for a New India. The honorable interim FM has meticulously balanced priorities of various sections of our society and delivered on his government’s vision of ‘Sabka Saath, Sabka Vikas’. This Budget makes a strong promise to the people to India, which I hope will be backed by an equally strong delivery, especially in the areas of job creation and addressing the skill-talent gap. The announced tax breaks, together with low average inflation, are likely to spur domestic demand and spending, and inject liquidity in the market. This is great news for sectors such as hospitality and travel. The announcements on bridging the digital divide and improving efficiency through technology are also welcome. I am excited about India’s Vision 2030 and believe that it will empower more young entrepreneurs to set off on their entrepreneurial journeys.”
READ | Interim Budget 2019 Highlights | PM-KISAN, tax rebate and other announcements
Dr. Arun Singh, Lead Economist, Dun and Bradstreet: “The budget announcements are almost in the expected line especially in the election year. Announcements toward farms, farmers and middle income category are expected to create huge pressure on the fiscal deficit during FY20.
“While the announcement towards salaried income and middle class income tax payers would put additional pressure on the fiscal mathematics, it would help to kick start consumption growth story in India.
“If implemented in the time bound manner, announcement towards farm and rural sector would help ignite rural consumption which otherwise is muted.
“Support for the middle class, farm package, unorganised sector and income tax benefits will boost demand.
“Populist budget but structured pension plans for the unorganised sector is a welcome move.Structured income support to farmers is a small step towards implementation of Universal Basic Income.”
Manish Sinha, Managing Director, Dun and Bradstreet: “Given the election year, it was widely expected that the Interim Budget 2019-20 will be a ‘Populist Budget’. The budget has given more sweeteners than expected. Targeted towards the marginalized farmers, rural economy, workers in the unorganised sector, MSMEs, and low income earning population, this budget has addressed the bulk of the population which are most impacted by any turmoil in the economy. We believe that this will help in alleviating some of the stress in the rural sector, have a positive impact on consumption and kick-start the investment cycle. Given such an aggressive expenditure plan and deductions given in the direct tax with no new avenues for revenue collection, achieving the fiscal deficit target for 2019-20 seems ambitious. The latest data on fiscal deficit is that we will miss the target in FY19, the second year in a row and is not credit positive.”
Bhavin Turakhia, Cofounder of Zeta (HR & Personal Finance): “The 2019 budget has touched upon critical areas such as enhancing tax exemption for salaried employees and digitising the entire tax filing process. The decision to carry all tax verifications via an anonymous digital interface and processing all tax returns within 24 hours displays the Government’s strong intention to build a digital nation, whilst putting convenience in the hands of its citizens and ensuring complete transparency. Finally, the increase in the standard deduction for salaried citizens from INR 40, 000 to INR 50, 000 is an encouraging move as more than 3 crore middle-class taxpayers will now get the tax benefit of almost 4700 cr. In addition to this, the Government of India has also exempted tax for employees earning an annual income of up to INR 5 lakh which is a welcome move as it gives more liquidity to the taxpaying citizens of the country.”
Dr Sanjay Gupta, Vice-Chancellor, World University of Design: “Overall, the Interim Budget is focused on people, progress & prosperity and that will lead to the rise of a #NewIndia by 2022. Being an election focused budget, there was no big announcement for the education sector which requires a long term focus. The reduction in the interest on education loans is a good move towards ensuring education for all. At the same time, the allocation for Higher Education Financing Agency (HEFA) has been reduced from Rs 2,750 crore last year to Rs 2,100 crore this year. More focused announcements around skilling and higher education for youth would have made the Budget more holistic.”
Akshay Chaturvedi, CEO & Co-Founder, LeverageEdu: “It was good to have Piyush Ji talk about India’s growing startup ecosystem, reflecting it is something that the government takes pride in. The GST reforms are a welcome step too. Hoping different departments in the government will work with each other, for example the DIPP and Income Tax authorities, which will really make growth seamless for startups, so that they are able to better serve the New India.”
Nimish Gupta, MD, RICS South Asia: “The sanctity and prudence generated in the overall economy, on the back of continuous reforms over the last three years were expected to deliver a business environment that was conducive, opening up the economy for large hearted schemes. As RICS, we expect that the Real Estate and Construction sector, which suffered the maximum brunt of some of these reforms, is now expected to grow significantly in light of the changes that these schemes and reforms intended. RERA and the Benami transactions act have already resulted in wider semblance in the market on the back of increased transparency.
“While this has been an interim budget, it has been heartening that the real estate sector, in particular, will see the silver lining. Affordable housing continues to get an impetus with benefits under Sec 80(i)BA being extended for one additional year, for housing projects approved till the end of 2019-2020. RICS is also encouraged with the focus extended to the promotion of rental housing, with the TDS threshold on rental income raised from INR 1.8 to INR 2.4 lakhs. Homebuyers will also benefit from the rollover of capital tax gains being extended to investment in two residential houses, for an individual having capital gains up to INR 2 crores.
“It is also heartening to see the continued focus on infrastructure development, with new regions being brought under the ambit of railway connectivity and India now being the fastest highway developer in the world, ensuring there is wider motorable connectivity. We also have something to look forward to from the Union Budget, post the 2019 general elections, given the intent of the Government to reduce the incidence of GST on homebuyers.
“This budget has not just been the farmer and youth-friendly, but also housing and homeowner friendly. Given the focus on training and boosting the employability of the youth, we are hopeful that the real estate and construction will also benefit with employable manpower finding its way into the sector.”
Manish Sacheti, CFO, Ziqitza Healthcare Ltd: “We applaud the Government on the announcement of a budget directed towards the lesser privileged and middle class population. The budget this year has indeed addressed a lot of issues that will help the economy to prosper. The allocation of INR 19,000 crores for the development of the roads in the rural areas is a great initiative. Being an emergency medical provider, this will help us reach out to the remotest corners of the country which has connectivity constraints. The success of the Ayushman Bharat Scheme is commendable and we are glad that the healthcare sector of the country is undergoing a significant transformation.
“We hope that the Skill India program will include training of youths to become dedicated paramedics to help efficient and quality ambulance services. One avenue that should have been looked at is making Healthcare services “zero-rated” under GST provisions, instead of being exempted, as the cost of inputs throughout the industry could further be reduced by claiming refunds of taxes paid on these inputs. This would help to enable these specialized services to reach out to the masses. ”
Parveen Kharb, CEO and Co-Founder, Twenty Two Motors: “We welcome the Union Government’s budget announcement of making a Clean and Green India. The Union budget focused on making India pollution free and electric vehicles will play a key role in achieving the goal. The import duty reduction on electric vehicle components will further reinforce this and lead to wider acceptance of electric vehicles however some SOPs for Li batteries could fast track the move.”
Sudhir Kumar, CEO and Founder, Tambo Mobiles: “The interim budget has put the efforts of homegrown budget mobile phone brands of deeper penetration in rural areas in the right direction. Tambo supports the Government’s goal of increasing job opportunities in rural areas and with an enabling environment, the company looks forward to driving deeper mobility. For the same, we are also looking forward to setting up our own facilities for production. In 2019 as we strengthen our distribution network further, we aim to play our part in helping the country move forward economically and technologically.”
Vishal Gondal, CEO and founder, GOQii: “The 2019 budget looks promising for the healthcare sector; we have seen some major initiatives and announcements that will potentially change the health Index of India. One of the key highlights is the establishment of a system that ensures a stress free environment and comprehensive wellness for all. Keeping in mind that 55 per cent of India’s workforce are millennials, this is definitely need of the hour. Therefore, paving way for a stress-free India is directly proportional to its growth. The healthcare announcements made in the budget are a welcome move and will help build a strong economy. This will provide opportunities for companies like GOQii to contribute to making a stress-free India and creating a space that encourages preventive healthcare over curative.
“Further, Ayushmann Bharat’s vision of improving the lives of 50 crore Indians which will potentially result in cumulative savings of INR 3,000 crores by the poor, is a testimony that the Government of India is strengthening the nation’s health ground up. We support the same philosophy that is making healthcare easily accessible for all Indians and governments efforts are evident through increased focus on making medicines, healthcare services and other health related instruments more affordable.”
Maulik Doshi, Senior Executive Director – SKP Business Consulting LLP: “As expected the budget has been populist where many sops have been provided to middle class tax payers and farmers. Overall it appears to be a good budget with a mix of populist and pragmatic statements. The most important aspect was maintaining the fiscal deficit targets even after doling out benefits. Real estate sector has also been given impetus by extending tax holiday for affordable housing, increasing period from 1 year to 2 year for taxing notional rent on unsold inventory, rollover capital gains benefit for 2 houses, etc. This will go a long way in meeting government aim of housing for all by 2020.”
Rajesh Uttamchandani, Director, Syska Group: “As India is poised to become a USD 5 trillion economy in next five years, there is an immense opportunity for Indian organizations to develop and flourish. With the rapid proliferation of new age technologies such as internet of things, artificial intelligence and others, we welcome the Government’s keen focus on building a digitally vibrant India in the next few years. This will provide an opportunity for companies such as Syska to introduce IoT enabled products that are affordable in the Indian market and help in developing smart cities. Additionally, as energy efficient product & solutions are seeing increased adoption, we are pleased with the Government providing 143 crore LED bulbs to rural areas. This resonates with our mission of providing energy efficient LED lighting solutions that are ‘Made in India’ to every Indian household.”
Sunil Gupta, MD and CEO, Avis India: “The statements given by the government in toady’s Budget highlight the intention of the government to promote road transportation by building new highways. Building 27kms of highways per day will make India the fastest highway developer in the world. The growth in the network of highways will lead to the creation of direct jobs and contribute to tourism. The Sagar Mala project will improve port linkages and drive the export of cars, critical for Make in India. We are supportive of Vision 2030 mentioned by Mr.Goyal in the context of electric vehicles (EVs). The Budget was largely silent on concrete incentives for EVs but we hope that in the next FAME policy, the Government will spell out incentives for all stakeholders in the EV ecosystem – manufacturers, charging infrastructure providers and operators. Promoting the manufacture and use of electric vehicles is a rare multi-benefit initiative, reducing the carbon footprint of transportation, air pollution and crude imports. Also, abolition of customs duty on components for assembly of lithium batteries for EVs in India and promotion of green-field EV battery capacity in India will drive Make in India.”
Surajit Das, Co-founder and CEO, Routematic: “Not much was talked on startups in the budget this year. The 2% interest subvention on MSME loans will help to get access to capital. Areas, where we wanted more allocation, were higher education to improve talent pool and some innovative thinking around reducing capital gains tax for VCs which could make India the preferred investment destination for VCs.”
Sunil Sharma, Managing Director Sales, India & SAARC, Sophos: “With India poised to become a USD 5 trillion economy in the next five years, we welcome the Government’s proposal of ensuring the growth of SME’s & rural India through initiatives such as promotion of digital villages. Additionally, through steps such as the establishment of a national centre on artificial intelligence, the Government plans to skill India’s youth, through the adoption of new technologies such as AI, so that they can reach their full potential. As the technology landscape evolves rapidly, along with the infinite opportunities that it provides us, there are also a myriad of new challenges especially in terms of IT security and data protection. Even though Indian businesses (67%) were the highest hit by ransomware with an average impact cost of approximately USD 1.17mn and 2018 being the year of serious data breaches, there was very limited focus on IT security in the budget. That said, while we welcome the Governments proposed steps in strengthening the MSME & SME sectors that provide employment to millions of people, there still remains a pressing need for further investment in technology for data protection and IT Security, both from the Government and organization’s standpoint.”
Neha Bagaria, Founder & CEO, JobsForHer: “The Government mandates 26 weeks maternity leave with a 400Cr proposal from last year to reimburse employers for 7 of the 26 weeks of extended maternity leave. Amendments to the Maternity Act, 1961 is significant, but what about balancing paternity leave directives? Men should be incentivised to take longer periods of paternity leave as well. Paid paternity leave can have positive effects for gender equality at home and at work, disrupting prevailing stereotypes.
“The conversation needs to move to ‘Parental Leave’ policies. Equal time off should be given to both parents and called family-friendly policies. The Government needs to be committed to reducing the burden on working parents, particularly in the first 12 months, when it is difficult to secure quality childcare as seen in an online survey we conducted for women restarters, where 38% cited childcare as one of the biggest challenges to restarting their careers. The Government has to mandate ‘Parental Leave’ as opposed to just maternity leave to balance the scales which will definitely enable women to engage and remain in paid employment and progress in their careers.
“The Government’s announcement of tax exemption for income up to Rs 5 lakhs, although gender-neutral, is optimistic for women returning to work. But is this enough of an incentive for women leaving the workplace by the millions? We need to see a stronger focus on hiring and retaining more women in the workforce. We need to see impactful women specific employment policies that can absorb and support women in the Indian workplace.”
Greg Moran- CO-Founder & CEO, ZoomCar: “These statements by the government certainly shows that the policymakers are looking forward to a strong ecosystem driven approach to the problem statement of urban pollution. This should create an environment for long term investment on the part of the private sector.”
Amit Kumar Singh, VP, Products & Digital Marketing, Travelyaari: “Travelyaari welcomes the continued push on road connectivity, especially the rural road connectivity with budgetary allocation of ₹19,000cr under the Pradhan Mantri Gram Sadak Yojana. This continuation in infrastructure development is in right direction to push road connectivity which shall enable last mile connectivity, benefiting the remotest corner of country. The CSC initiative to create 1 lakh digital village is another welcome step which shall remove inefficiencies in market and unlock new fair markets across India through eCommerce. We look forward to partner with government on such CSC initiatives. The mobile data penetration has already enabled 3 digits growth rates even for Travelyaari on mobile platform and with these initiatives we see this to be the story for next 5 years.”
Dinesh Kumar Kotha, Co-founder & CEO, Confirmtkt: “This is truly welcome step by the government towards focus on infrastructure. On the Railways end primary focus in safety is the need of the hour but also government should focus on solving one more bigger problem of waitlist tickets. As per the Indian Railways annual Report the passengers carried is almost constant from last 2 years.So there needs to be a focus on the improving the infrastructure, add more new trains , Cut down trains on the routes where there is a low fill rate and introduce these trains in the demand routes. The budget has given focus to improving facilities and maintaining the existing trains, over announcing new trains.”
Suraj Mahtre, Business Head, WarrantyBazaar.Com: “Mobile & parts manufacturing firms have increased from 2 to 268 which will help in supply of affordable and domestically manufactured devices in Indian market. This will increase the number of smart phone users in India which will further propel manufacturing in the country. Also, it will lead to the rise in demand for Warranty Services and Service Network for after sales support. Domestic supply of spare parts will make servicing quicker and less costly. With the budget 2019, we predict that refurbishing of phones will be cheaper adding more inventories in market with attractive prices.
“With the vision of reaching every village by 2030, Union Budget 2019 has a major focus on Village industries and start-ups through digital mediums. This will increase penetration of Smart phones in India, which will further benefits our business with increasing our Universe. ”
Ashwin Bhandari, CEO, iVOOMi: Focus on Digital India in the budget, vision of creating 1 lakh digital villages will empower the real India and fuel overall growth in the economy and will bring comprehensive growth for the industries
Declaration on schemes for incentives for SMEs and start-ups is a welcome move, to enable small businesses that in turn will support services to different businesses, this should promote smaller manufacturers too to build on the ecosystem
Boost in the direct tax collections, enabling bigger capital expenditures (declared in budget), incentives to farmer, basic tax slab raised to 5 lakh – are noticeable moves towards economic growth that will fuel the industrial growth in mid-term.
Nikhil Mantha, Co-Founder & COO, Piggy – Mutual Fund Investment App:
Markets seem to be satisfied with the fiscal prudence shown by the FM especially before elections with fiscal deficit target being 3.5% and Current Account deficit target being 2.5% of the GDP in line with expectations. Though the final mathematics of expanding benefits and foregoing taxes remain to be seen. Biggest plus is introducing the Rs.3,000/month pension scheme for the unorganised sector. Also positive steps taken for Agriculture with the interest rate subvention and Rs.6,000/ year direct benefit to farmers with upto 2 hectares land. The budget seems to have covered major constituencies of Farmers, SMEs and Middle class. Yet I feel not enough was done for job creation and to boost our crumbling industrial infrastructure.
No clarifications on Angel tax was disappointing. But the increased focus on AI from announcement to launch a National Artificial Intelligence (AI) Portal is a step in the right direction. AI will have a major role in disrupting multiple Industries and as a nation it is important that we understand it’s significance and take steps to promote innovation in it.
Taxation and Middle Class Benefits
Welcome move by the FM to give tax breaks to people with income upto Rs.5 lakh and effective income of Rs.6.5 lakh taking section 80C into account. Also increase in standard deduction to Rs.50,000 and exemption on interest income on savings to Rs.40,000 are a big plus. This will go a long way in boosting consumption in the economy. No sops for mutual funds though which is a little disappointing.