June 27, 2019

Budget 2019, Leaders Speak

Mr. Prashant Gupta, Executive Director, Sharda University

“Reflecting our Government’s great commitment to harness the potential of our students/youth and empower their future, the investment of Rs 38, 572 Cr under the National Education Mission, is indeed a welcome move. The initiative of deduction in the interest on education loans will make education accessible to all. Additionally, the government’s push towards new-age technologies like Artificial Intelligence will impart necessary skills and knowledge to the younger generation and will help in preparing the workforce of future.”

Mr. Peter Kerkar, Group CEO, Cox & Kings.

“The move by the government to increase the tax exemptions will lead to additional savings thereby leading to more discretionary spends and travel and tourism can be one of the beneficiaries The overall emphasis on improving rural connectivity with an outlay of Rs 190 billion will lead to easier access to key tourism destinations which are located in rural and semi-rural areas. Furthermore, the government’s continued emphasis on the North East by allocating additional resources to the region will dramatically improve the connectivity and give a boost to tourism.”

Mr B K Goenka, President, ASSOCHAM

The finance minister, Piyush Goyal in his interim vote of account budget presented today announced sops that would benefit people from several walks of the society. Right from the farmer, to the worker from the unorganised sector to the middle class tax payer, everyone would have something to cheer upon.

The farm sector which has the largest number of people dependent on it is the biggest beneficiary. The finance minster announced the launch of the The PM Kisan Samman Nidhi where Rs 6,000 assured income benefit would be provided to all farmers with a land holding of less than 2 hectares. The amount would be provided in three equal installments within effect from December 2018. He also announced interest subvention of 2 percent to farmers hit by natural calamities. An additional 3 percent interest subvention would be further provided if they repay the loan on time, thus taking the subvention to 5 percent, said Mr. Goenka .

For the worker in the unorganized sector, the finance ministry has announced the creation of a Mega pension scheme- Pradhan Mantri Shram Yogi Mandhan, which would give an assured pension of Rs 3000 per month to a worker from an unorganised sector on his completion of 60 years. The worker needs to contribute Rs 100 per month.

The tax payer who has been bearing the burden of all schemes run by the government has also got something to cheer from the interim budget. People with income upto Rs 5 lakhs would be exempted from paying taxes. The salary earners with income upto Rs 6,50,000 and making investments would be exempted from paying taxes. The standard deduction amount reintroduced last year has also witnessed a 25 percent increase. The amount has gone up from the earlier Rs 40,000 to Rs 50,000 now. People owning second homes and were paying tax on the notional rent would also be exempted from paying taxes now, added President Chief.

Steps have also been taken to simplify the tax payment system. Income tax return refund would be processed in the record span of 24 hours and the refund amount would be issued simultaneously.

Ms. Sonica aron, Founder & Managing Partner, Marching Sheep, An HR Advisory Firm Specializing In Diversity and Inclusion Interventions

“With the change in tax slabs and the positive impact on an estimated 3 crore middle class. Indians we see an increase in consumer demand and organisations doing well thereby creative a positive cascade on employment.
Sectors catering to rural and bottom of pyramid will get an exceptional push with the announcement of the schemes for small farmers and unorganised sectors.
We welcome the mandated change in policy on gratuity. It reflects a recognition of the change in living costs and positively addresses long serving employees.
What I missed includes investment in schemes for the education and vocational training for girls, as this will have a far reaching effect on the economy. Also missed the addressal of unpaid work by women. I was hoping for some thing in that direction”.

Mr. Mitesh Shah, Head of Finance, BookMyShow

‘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’.

Vartul Jain, VP – Finance, GreyOrange on the budget announcement today.

Request you to please to carry this quote in case you’re planning a budget story, would really appreciate.

“It is heartening to see the Government’s continued focus on its flagship programs, Digital India and Make in India, as key drivers to the nation’s economic growth, with a greater focus on digitisation in the rural economy. In line with this agenda, the announcements to set up a national centre for Artificial Intelligence and development of an AI portal through identification of nine priority areas in the segment will be critical to promote the adoption of these emerging technologies in the country and to position India as a front runner in this space across the globe.

The extension of the GeM platform, with a focus on supporting domestic trade and services, retail trading and welfare of traders augur well for the development of these sectors. The continued impetus to boost MSMEs and empower traders will contribute towards the growth of small businesses, fostering innovation and employment.

On the whole, we believe the Government’s thrust on technology along with the emphasis on internal trade in this year’s budget are defining steps, the results of which will be crucial in realising the vision of the $10-trillion economy in the long run.”

J.B Singh, President and CEO, InterGlobe Hotels Private Limited

“The union budget has a positive ring to it and lays down the roadmap for robust growth. 100th airport opening in India, number of flyers which has doubled in the last 5 years and 27 km of roadways being built everyday (the fastest in the world) have all meant that more and more people are traveling than ever before and thus the demand for quality accommodation which is on the rise.“

InterGlobe Hotels recently launched ibis in Kolkata and commenced construction of its property in Thane, Mumbai. The launch of Ibis Kolkata has taken InterGlobe Hotels’ portfolio to 17 hotels across 14 cities with more than 3,000 rooms. At the same time, there are another 6 hotels under various stages of development and planning.

Mr. 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.” Akshay Chaturvedi, CEO & Co-Founder, LeverageEdu

Mr. Sumeer Chandra, Managing Director, HP Inc. India.

“The focus on leveraging emerging technologies like Artificial Intelligence to enable a positive impact on the lives of people is an encouraging step. Further, the expansion of rural industrialization using digital technologies, development of clusters encompassing the MSMEs, village industries and start-ups, will boost rural manufacturing, job creation and strengthen the overall economy.

We appreciate the government’s budget focus on empowering the middle class and the rural population. Initiatives such as monetary support for farmers and higher exemption limit in personal income tax slab would provide higher disposable income, thereby, leading to higher spending. I believe, this will lead to consumption growth, giving impetus to overall economy.”

Mr. Shishir Baijal, Chairman and Managing Director , Knight Frank India

The interim budget for FY 2019 – 20 presented today by Railway and Coal Minister of India Piyush Goyal is very positive. We are pleased to see that the government has taken note of the issues faced by the real estate sector and has addressed them systematically. It has addressed both the demand and the supply side of the sector.

For the demand side, the budget has ensured better liquidity and lower tax burdens on the purchase of homes. The benefit of rollover of capital gains has been increased from one house to two houses, upto INR 2 Crores (once in lifetime), is a tremendous step by the government that will boost sales in both primary and secondary markets. On a broader canvas, the changed direct tax implications including exemption of taxes till INR 500,000 p.a. automatically increases the disposable income, especially for the middle-income groups. We believe this step along with the increased standard deduction limit will in some way translate to an improved affordability for house purchase, thus aiding demand for the sector. A back of the envelope calculation on the new standard deduction rates and other direct tax sops give us a figure of an annual taxation exemption of almost INR 7- 9 Lakhs per annum. We believe that a fair part of the savings from this could be channelised towards real estate. Additionally, the provision of increasing the number of self-occupied properties from one house earlier to two houses now will augment the house purchase decision for people supporting families in another city/towns.

For the supply side, the government has taken into consideration the challenge of unsold inventory and has therefore increased the period of exemption for notional tax on unoccupied units from the prevalent 1 year to 2 years. This will give developers a big relief allowing them to concentrate on sales strategies. To further boost the affordable housing, the government has extended the benefits Under Section 80 (IBA) till 31st March 2020. The government’s commitment towards affordable housing continues and we expect to see more such projects coming into the market. The demand for housing is strongest in the affordable segment.

The Finance Minister has also reiterated the government’s commitment to consider a revision on GST implications on the real estate sector by mentioning that a special committee is reviewing the same. This assures us that positive steps are being taken in this direction.

With all the sops announced by the FM today, the fiscal deficit being at predicted 3.4 % further spells reassurance of financial discipline. We consider this budget to be one of the best in many years for the real estate sector.

Pankaj Jain, MD at Realistic Realtors

Income Tax rebate upto 5 lac per annum is a clear indicator of bringing more people under tax payers category happily and comfortably. Money circulation through bank and economy will have major positive impact due to this tax rebate. Housing under PMAY and increase of Infrastructure development budget is a also very positive step towards real estate affordability and accessibility because these two initiatives would enable more people buying their homes in city as well as outskirts. GST rate on real estate is still a pending but a very critical issue to be addressed. This is another very important matter for easing the real estate sector and encouraging the completion of under construction projects, we look forward to Govt immediate and positive decision on this. Demonetisation as expected is showing its positive effect for Indian economy and with this new Income Tax ruling, a huge number of population will be encouraged towards banking transactions.

Ankur Dhawan- Chief Investment Officer- PropTiger.com.

“Government has given sufficient reasons for real estate to rejoice in this budget. Though there were many direct announcements for sector such as extension of Section 80IBA for 1 year, no interest on notional rent till 2 year of completion of project, reinvestment of capital gain in 2 houses rather than one and no tax on notional rent for 2 self-occupied houses, yet announcement of doubling of NIL income tax slab from 2.5 Lakh to 5 Lakhs will have much stronger impact on real estate sales especially for affordable housing buyers. Not only government is giving credit link subsidy scheme for these buyers but also leaving more money in hand to pay EMIs through increased tax savings.”

Mr. 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.”

Mr. Gautam Kaushik, CEO, PAYBACK India

“The Interim Budget has been a balancing act with primary focus on addressing the concerns of the farming community, ease of doing business for the unorganised sectors and giving out relief to tax payers across sections while maintaining the aspirations towards continued economic growth. This should help shore up confidence in the future prospects of the economy which should then manifest in strong consumer growth helping our business.”

Madhavi Arora, Economist, FX & Rates- Edelweiss Securities Ltd.

Fiscal fragilities have been weighing both on the currency and debt market space. While markets were largely expecting a populist budget from the current regime ahead of the general elections and amid recent loss in state elections, all eyes have been on the credibility of headline numbers and revenue assumptions for next financial year, and the extent of populism.

With the government pegging FD/GDP at 3.4% for both FY19 and FY20 (Edelweiss: 3.5% for FY19 and 3.3% FY20), the fiscal consolidation path has been stalled for the moment, with government pressing for need to support the farm sector. This makes the medium term path of 3% FD/GDP by FY21 more tedious and far-fetched. Besides, the expenditure focus was more skewed towards consumption than on investments, keeping in mind the upcoming elections, making the fiscal impulse relatively inflationary in medium run.

The budget was largely populist, farm sector and middle class focused, thus helping consumption segment of the economy. The focus on farm sector has been targeted for only marginal farmers (land holdings of up to 2 hac) with direct cash transfer of Rs 6000 annually, costing the exchequer Rs 750bn (0.36% of GDP) in FY20 and additional Rs 200bn in FY19 (0.1% of GDP). Apart from that, 5% interest subvention has also been given on timely repayment of loans. For middle class, various rebates and exemption will lead to the effective tax benefits of Rs185 bn (0.1%GDP).

The details of the budget however, are mixed. The tax revenue assumptions looks manageable, with gross tax revenue growth pegged at 14% against 11.5% GDP growth, however we need to watch out for improvement in GST collections for the government to achieve 18% budgeted growth amid still-patchy collections seen in FY19. The expenditure shift has been skewed towards revenue bit, with revenue expenditure hitting close to 14.4% of total expenditure, as against capex at mere 6.2% of total expenditure in FY20. FY20 Capex/GDP has also moderated to 1.6x form 1.7x in FY19RE.

Amid sticky fiscal stance, the gross market borrowing is pegged at Rs7.1tn (Edelweiss: Rs 6.6 tn) in FY20 versus Rs5.71 tn in FY19; and net market borrowing at Rs 4.73 tn (Edelweiss: Rs 4.6 tn) vs Rs 4.23 tn (not adjusted for buybacks). Both prints are higher than expected, pressuring bond yields. The buybacks have been kept higher at Rs500 bn for FY20 after having seen none in FY19. We think some leeway is there with the government to reduce the gross borrowing in FY20, if they reduce their budgeted buyback later.

The MPC will view these numbers cautiously amid skewed fiscal impulse towards consumption, which could be inflationary. However, we note that the current inflation dynamics are extremely comfortable, with near-term inflation on its way to again undershoot RBI’s forecast. Consistently benign inflation prints have put downward pressure on near-term inflation trajectory. We see headline inflation in 2HFY19 averaging ~2.6% and 1HFY20 at ~3.7% — much lower than recently-downwardly revised estimate midpoint of the RBI. Besides, the calm in global markets with dovish Fed gives further leeway to EM central banks, including RBI to ease their stance. We retain our view that MPC will change its stance to neutral by February and sustained lower inflation would open up space for 25-50bps easing in 1HCY19.

Prashanth G J, CEO at TechnoBind

“The one thing that stood out in the Budget is the putting up of the Vision 2030. While there are no details available as yet in terms of the implementation of this vision the fact that the government is thinking long term is well appreciated.

The focus on the Digitisation will go a long way in improving the social and economic fabric of the country – be it creation of jobs, uplifting the lower end of the society reducing the income gap and many more. The announcing of the 5 Lakh Digital Villages is really welcome. It will go a long way to leverage the benefits of technology right up to the grass root level. Especially in a country like India which has always been challenged from a penetration of technology this will be a big boost.

Also, another good thing that we got from today’s budget is Income Tax returns being processed within 24 hours. While one needs to wait and watch in terms of the practicality of this but it’s a welcome move in the right direction.

Overall a pretty good budget!!”

Krishna Raj Sharma, Director & CEO at iValue InfoSolutions

“Despite being an election year, it’s good to see Government allocating money where its required – farmers, middle class families, pension scheme for unorganized sector, more allocation to health, education and defense.

Despite missing out on Fiscal deficit target for current as well as next fiscal, the FM took rating agency and investors in to confidence by explaining the need for supporting farmers which was well received as seen by the market reaction.

With GDP growth being upgraded, 0.1% to 0.2% slip of Fiscal deficit should be manageable. Good to see FM recognizing and rewarding honest tax paying middle class citizens with tax exemption up to 5L salary along with higher TDS.

Overall good interim budget sending the right signals.”

Rajendra Chitale, CFO at Crayon Software Experts India Private Limited

“It’s a budget with many sections of the society being the beneficiaries. It is specially a poor and middle class centric budget as it increases the money in these households. This can trigger consumption and lead to further growth. Phasing out human intervention in tax returns, verification and scrutiny is a good initiative which can help reduce corruption. Overall, it is a good budget.”

Mr. Praveen Khandelwal, CAIT Secretary General

The Union Budget though seems to be overall good has utterly neglected the trading community and it has highly disappointed 7 crore traders of the Country who were hoping very high from the budget-said the Confederation of All India Traders (CAIT).

CAIT National President Mr. B.C.Bhartia & Secretary General Mr. Praveen Khandelwal said that every other section of the economy has been given relief in the budget except the trading community which is the backbone of the economy. The budget makes us to feel that trading community is like an unwanted community in the Country.

After renaming DIPP as Department for Promotion of Industry and Internal Trade and giving no extension to FDI policy in e commerce, the traders were hopeful that they will get due attention in the Budget but with totally left out from the Budget, the traders feel aggrieved.

However, the CAIT has said that it will send a fresh memorandum to Prime Minister and Finance Minister urging them to take care of the trading community.

Mr. Parag Agarwal, Founder & CMD, Janajal

“As expected, this is a positive Budget with several announcements for the social and economic welfare of the country in the long term, much in line with the Government’s intention of a “New India” by 2022. It is heartening to see safe drinking water to all Indians as part of the Government’s plan by 2030. Water ATMs have a big role to play and can help achieve this vision much sooner. Safe water made accessible to people in a decentralised format such as water ATMs can have a force multiplier effect on the Government’s intentions through good health and wellness besides job creation and social entrepreneurship.”

Harhil Mathur, Co-founder & CEO, Razorpay

“We are glad to see the Government’s focus on digital inclusion for the rural economy. 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 specially beneficial for companies which are focused on MSMEs and individuals.

One of the key highlights in this budget was the tax rebate for individuals. 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.”

Mr. Siddharth Angrish, Founder, Jiyyo.com,an Artificial Intelligence Based Patient Care Coordination Platform.

The Government’s focus on Ayushman Bharat is giving results. However, a lot more can be achieved. Local players in online healthcare can be roped in for increasing outreach and awareness about such govt initiatives. For example, it should be really easy for any patient to find out the hospitals & services covered under the scheme. Being able to show pricing details to patients will also increase their confidence. Such data can be shared with startups so they have apply their creativity and create more value added services

Harshavardhan Neotia, Chairman of Ambuja Neotia Group

The budget presentation by the Finance Minister Piyush Goyal has been a significant budget. Though it’s an interim budget, it presents a roadmap for future India which is poised to become a $5 trillion economy in 5 years and aspires to become a $10 trillion economy in the next 8 years thereafter.

The government took the opportunity of its last budget to not only present a synopsis of its many achievements of the last five years but also put out a ten point inspirational vision for the forthcoming decade.

They have by and large kept close to the fiscal deficit target and only allowed a slippage of 0.1% primarily to provide the much required support to small and marginal farmers facing distress.

The presentation indicated that the government had managed to keep inflation in check and perhaps their record on this parameter was the best ever for a five year period.

The tax breaks for the salaried, middle class, pensioners is being welcomed and is far more than expectations. This is definitely a budget for the middle class and poor.

From poor farmers getting ₹6,000 per year under PM Kisan scheme to unorganised labour getting ₹3,000 per month after age of 60 under mega pension scheme to no income tax for income up to ₹5,00,000 as also standard deduction raising from₹40,000 to ₹50,000 aim towards bettering livelihoods of a large section of people.

From real estate’s point of view several noteworthy announcements have been made which includes: No tax on notional rent if you own second house, No TDS on rental income up to ₹2, 40,000 per year, Capital gains tax exemption added to new house under Section 54 within limit of ₹2 crore. That apart an effort has been made to boost affordable housing by extending income tax benefit by a year under section 80IB till March, 2020.

The government has recommended to the GST council for rationalization of rates to address the concerns of home buyers which is likely to propel prospective home buyers to accelerate their purchase decisions, thereby leading the residential market to pick up pace.

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