Reactions to Union Budget 2015
Chief executive officers, CMDs of major Indian companies and industry experts react to National Democratic Alliance government’s first full-year budget
Gautam S. Adani, Chairman, Adani Group:
add_main_imageThis budget is focused on ease of doing business, Make in India, infrastructure, social sectors. Introduction of GST from 1 April 2016 will definitely rejuvenate the industry and make manufacturing more competitive. This, coupled with clarity on GAAR deferment for two years and no retrospective applicability, comprehensive bankruptcy code, abolishing wealth tax act, merger of FMC with SEBI, rationalization of corporate tax from 30% to 25% coupled with review of deductions, etc. supports the Make in India campaign.
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Arundhati Bhattacharya, Chairman, State Bank of India:
The budget has laid out a clear and tangible roadmap for the future. The decision to incentivise credit and debit card transactions coupled with the proposed new law on black money will bring down the social cost of unaccounted money, apart from adding to the bank bottom-line. The move to frame a Public Contract Bill will kick start activities in the construction sector plagued by disputes. The move to bring NBFCs at par with financial institutions will help banks to clean up their balance sheets by selling stressed assets at an early stage to ARCs. This apart, framing of Bankruptcy Law, sprucing up public investment to channelize private investment and monetisation of gold assets are positive steps.
Sanjiv Goenka, Chairman, RP-Sanjiv Goenka Group:
This budget restores confidence in India and India Inc. The approach of the Finance Minister is one of “quantum jump” rather than tinkering, which would accelerate the development process and put the Indian economy on a sustainable growth trajectory, while further expediting the “Make in India” programme.
The budget this year has many far-reaching features. For instance, the corporate tax rate cut and abolition of wealth tax, as also monetization of gold. Another highly encouraging feature is the corporate tax rate cut to be down to 25% over a period of four years—this is the rate that prevails in most Asian countries, including China. sixthMAds
Shri Jaitley’s focus on roads, airports and power is going to be highly beneficial. Directionally, the Budget has ushered in a fiscally-predictable tax regime. No Budget in recent times has so courageously tackled so many burning issues—Indian business could not have asked for better.
Thomas John Muthoot, CMD, Muthoot Fincorp:
Extension of provisions of the Sarfaesi Act to registered NBFCs (to enable investor protection), was something that was in our wish list. This has happened now.
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Sarfaesi Act) was enacted to enable banks and FIs to realise long-term assets, manage problem of liquidity, asset-liability mismatches and improve recovery by exercising powers to take possession of securities, sell them and reduce NPAs by adopting measures for recovery or construction.
All three gold related announcements made by FM in today’s budget are towards bringing out the locker gold into the formal system and facilitate transparency in the recycling sector and also reduce the dependency on imports. It is a very welcome move.
We will have to wait for the details to come out in regards to these announcements and the proposed guidelines issued for implementation of the same.
We at Muthoot Pappachan Group have already started to act in this direction with the Muthoot Gold Point initiative at the ground level in a transparent and professional manner that is beneficial to end consumers which in turn also has an impact at the macro level (recycling activities that will over a period of time reduce dependency on imports).
Rajiv Lall, Vice-chairman, IDFC Ltd:
It’s a development oriented budget and not a populist budget. A welcome shift in direction.
Anup Bagchi, MD & CEO, ICICI Securities:
Resources freed from lower commodity and oil prices has been judiciously deployed in a well thought out way. In addition, concrete timeline of implementation of GST ( April 2016), realignment of DTC by lowering the corporate tax rates to 25% over last four years, urgency to lift infrastructure requirements, focus on health, education and security of individuals amid limited populism and fiscal discipline, clearly indicates the progressive nature of the Union Budget 2015-16.
Deepak Kapoor, chairman PwC India:
Budget’s proposals are reflective of the Government’s intent to move towards double digit growth with its emphasis on ‘Make in India’, infrastructure development, ease of doing business and continued focus on social priorities and overall development needs of the country. Noteworthy measures include reduction in tax rates, stringent provisions to tackle black money, removal of ambiguity on taxation of indirect transfer, eliminating MAT on FIIs, providing pass through status to AIFs and REIT, deferral of GAAR, new bankruptcy framework and steps to develop startup ecosystem.
Mukesh Butani, Chairman, BMR Advisors:
From a policy standpoint, the FM has engineered the Budget around the Prime Minister’s initiatives such as ‘Make in India’, ‘Swaccha Bharat’, and ‘Skill in India’. The focus on black money and curing the economy off this menace seems to have taken centre stage.The impetus to Infrastructure, Agriculture and Education sectors is laudable though the much expected big bang reforms are yet in the waiting.”
Ashishkumar Chauhan, MD & CEO, BSE:
The International Finance Centre in Gift city is a welcome move. Setting up of IFC in Gift city was a part of the vision of Hon’ble PM which was supported by BSE wholeheartedly. This would help establishing an International Finance Centre which can compete on rules, regulations and ease of business with other International Finance Centres such as Hong Kong, Singapore, Dubai and London. Creation of a Public debt management agency is part of the FSLRC implementation. We welcome the move to merge FMC with SEBI, which has been a part of the FLSRC recommendation. We welcome the Government’s thrust on deepening the bond market, BSE will work with the Government to implement Government and Corporate Debt market reforms for primary as well as secondary market.
Anuj Puri, Chairman & Country Head, JLL India:
In this year’s budget, the Finance Minister has conveyed a message wherein the benefits lie only in the fine print. For the common man, though the cumulative savings implied by various provisions are stated to be to the tune of ₹ 4.44 lakh, this is assuming a certain magnitude of personal investments into pension funds and health insurance.
The budget has not provided any additional relief via increased income tax deduction limit or on repayment of housing loans. The regime on these fronts which was announced during the previous budget from eight months ago remains unchanged. This is a disappointment, since there was expectation that the Finance Minister would further increase either or both of these limits and thereby address the reality of high property prices in India.
The budget is low on big bang reforms and real estate is only an indirect beneficiary at best.
Dilip Chenoy, MD & CEO, National Skill Development Corporation (NSDC):
“This is a momentous budget, particularly from the skill development point of view. The headline for us is the government’s plans to launch a National Skills Mission. We welcome this move with great enthusiasm and look forward to working with the Ministry of Skill Development and Entrepreneurship (MSDE) that will lead this mission.
The intention of the government to coordinate efforts under the Make in India mission and the planned Skill Mission is a great idea since we will need very large number of highly qualified skilled manpower to realise the PM’s vision for make India a manufacturing powerhouse.
The idea of providing at least one job for every family is also a noble one and again we think “at least one skilled person per family” will be a desirable and essential starting point for this dream to be realised.
The ₹ 1,500 crore allocated under the Deen Dayal Upadhyay Gramin Kaushal Yojana for skilling rural youth is also a welcome move that will help skill development penetrate deeper into the country’s landscape. Finally the ₹ 1,350 crore allocated for National Skill Certification and Monetary Reward Scheme (STAR Scheme) will go a long way in helping those who wish to acquire a skill but need financial support.
A further ₹ 150 crore allocated under Kaushal Vikas Yojana will also provide essential fillip to the Skill Development initiatives in the country.”
Padma Priya J., Director, Grant Thornton India LLP:
“The highlight of the Union Budget 2015 is the boost given to the infrastructure sector, keeping in line with its development agenda. The most needed push in the infrastructure sector is expected to come from the host of measures announced. Amongst the key ones is revisiting the Public Private Partnership (PPP) framework wherein the sovereign will be bearing the major part of the project risks. In a country where majority of the PPP projects were not perceived as ‘successful’, this measure is expected to boost private investor confidence to a large extent. Similarly, the introduction of the proposed Regulatory Reform Law across various infrastructure sectors and introduction of Public Contracts and Resolution of Disputes Bill and institutional arrangements of resolution of disputes will provide the much needed boost to the sector. Announcement of measures for investment promotion through regulatory interventions like according permissions through an integrated portal and reducing the approval time will also go a long way in increasing private sector confidence. The wait for the Expert committee to prepare the draft legislations on permissions will now begin.
R. Mukundan, Managing Director, Tata Chemicals:
“The Finance Minister has set the direction for a balanced and inclusive growth emphasising on increasing agricultural productivity, farm income, increasing investment in infrastructure, manufacturing maintaining fiscal discipline as well as raising social spend. There is nothing specific announced for any particular industry including Chemicals & fertilizer Industry, however, rationalizing subsidies is a welcome step and we look forward to its implementation. Reduction in customs duty on certain raw materials will help the manufacturers going forward. The proposal to reduce corporate tax from 30% to 25% over the next four years is a welcome step for the industry and is expected to boost investment as the tax structures simplify. Proposals underlined by Shri Jaitley under ease of doing business and the focus to support the startups will also go a long way in encouraging domestic manufacturing. Further, we also look forward to the implementation of GST, further simplification of tax structures and clarity on PPP opportunities in various sectors which will give a boost to the ‘Make in India’ campaign.”
Chandrajit Banerjee, Director General, CII:
The Budget 2015-16 meets the present requirements of the Indian economy and outlines a comprehensive vision for citizens with strong focus on growth, investment, job creation and social security. A forward-looking, counter-cyclical, and pragmatic document, the Budget reassures investors and builds consumer confidence. CII is encouraged by the GDP growth target of 8-8.5 per cent for 2015-16, and fiscal consolidation at 3.9 per cent of GDP. The Budget would strengthen the investment cycle and build the savings pipeline while also channelising funds into much-needed infrastructure.
The Finance Minister has placed strong emphasis on public sector role to enhance capital investments through a slew of measures, including extending fiscal deficit targets for a year, adding resources from public sector enterprises and creation of a National Investment and Infrastructure Fund. CII had recommended tweaking of Real Estate Investment Trusts and Infrastructure Investment Trusts, revamping of Public Private Partnership modalities, and placing large projects for bidding after obtaining all clearances. These are mentioned in the Budget and would help ‘crowd in’ private sector investments along with high priority accorded to ease of doing business.
The steps to add money in the hands of consumers and build their future would add a lot of comfort to consumers and help expand the demand for goods and services. Industry looks forward to attaining the double-digit growth trajectory which is eminently attainable through the prudent navigation of Budget 2015-16.
V.P. Mahendru, Chairman and CMD , EON Electric:
“This is an excellent growth budget for raising internal financial resources without burden on the lower income group citizens of the country, and for creating jobs for young educated people of India and thus creating millions of jobs for the lower income groups too. It can be termed as a visionary budget which lays the road map for achieving long-term goals of raising funds for Infrastructure and Industrial growth. The exception from SAD and reduction in the excise duty of LED drivers and MCPCB for LED lights, fixtures and LED lamps is a clarion call to boost domestic LED Lighting and Electronics Industry. We are also enthused by the reduction in corporate tax and MAT as it will encourage corporate operations. Clarity and re-assurance in effective implementation of GST by the beginning of 2016 is indeed very encouraging and reassuring step. “
Bhaskar Ramamurthi, Director—IIT Madras:
The impetus given to R&D, incubation and entrepreneurship in this Budget is very heartening. So is the support for innovation through the Atal Innovation Mission. If administered well, these steps can act as a force multiplier for both “Make in India” and for employment generation.
The strong commitment for Housing for All and for the increased use of renewable energy are also welcome. Indian R&D, such as the work done at IIT Madras in these directions, can contribute significantly to meeting these challenging goals.
Richard Rekhy, CEO, KPMG in India:
“The Finance Minister has come out with a pragmatic Budget which is directionally focused at achieving growth and keeping the fiscal prudence in mind. The Focus is on Ease of Doing Business in India and increased infrastructure spend. Measures like New Bankruptcy legislation, startup entrepreneur’s funds, GST rollout by FY 2016, deferral of GAAR will definitely support the cause of Ease of Doing Business in India. “
Arvind Mahajan, Head of Infrastructure and Government services, KPMG in India:
Arun Jaitley’s first full Budget, was presented in a favourable context with India’s growth beginning to accelerate and fiscal deficit and inflation coming down.
Jaitley’s growth-oriented budget sets the Agenda for government to achieve 8% growth in FY16 and poised for over 10% p.a. over next 5 years.
Key emphasis of budget was on increasing investment in infrastructure sector, providing roadmap for transforming the indirect and direct tax regime, more effective direct transfer of subsidies, emphasis on making it easy to Make in India& Skilling India and special focus to key social initiatives of government such as Swach Bharat ( preventive health), Jan Dhan Yogana ( financial inclusion) and Digital India ( bridging digital divide)
He has stepped up public infrastructure spending by $12 bn in FY16, especially in railways & highways to kick start investment in the sector. While there is no immediate relief for stalled infrastructure projects the plan to create a Bankruptcy code, re-booting of PPP model, public contracts (resolution of disputes) bill are steps in the right direction
Finally he has laid ground for a competitive and predictable tax regime which is less adversarial. He has set stage for introducing GST by April 2016, thereby transforming Indirect Tax regime which will help create a common Indian market. Also provided a roadmap for direct tax regime including reduction of corporate tax over next 4 years, deferral of GAAR by 2 years and abolition of wealth tax
Overall a budget which tried to balance economics with politics. While this was not Big Bang reform budget but has attempted to create an institutional & regulatory framework for the future.
Suneeta Reddy, Managing Director, Apollo Hospitals Enterprise Limited:
“Overall this has been a forward-looking and stable budget. By linking financial inclusion (Jan Dhan Yojna), social security and health insurance agendas, the Finance Minister has provided a holistic road map for greater access for all in the future. Specifically, the health exemptions provided for all and, in particular, for the elderly are a major positive. The government has announced 5 new AIIMS, which will both increase access to health facilities in those stated and also provide a training ground for medical professionals. The visa on arrival for 150 additional countries is also a progressive move. This will go a long way in facilitating medical tourism, which is a growth industry that showcases India’s world class health facilities while contributing foreign exchange to the exchequer. A lot more, however, needs to be done in terms of providing physical and educational infrastructure that supports the healthcare sector. This has to be done in partnership with and by giving incentives to the private sector that has been providing nearly 70% of the additional beds in India. We also welcome the road map for reduced corporate taxes starting in 2016 and the roll out of the GST, which is on track.”
R. Mukundan, Managing Director, Tata Chemicals Ltd:
“The Finance Minister has set the direction for a balanced and inclusive growth emphasising on increasing agricultural productivity, farm income, increasing investment in infrastructure, manufacturing maintaining fiscal discipline as well as raising social spend. There is nothing specific announced for any particular industry including Chemicals & fertilizer Industry, however, rationalizing subsidies is a welcome step and we look forward to its implementation. Reduction in customs duty on certain raw materials will help the manufacturers going forward. The proposal to reduce corporate tax from 30% to 25% over the next four years is a welcome step for the industry and is expected to boost investment as the tax structures simplify. Proposals underlined by Shri Jaitley under ease of doing business and the focus to support the startups will also go a long way in encouraging domestic manufacturing. Further, we also look forward to the implementation of GST, further simplification of tax structures and clarity on PPP opportunities in various sectors which will give a boost to the ‘Make in India’ campaign.”
Tulsi Tanti, Chairman, Suzlon Group:
We welcome this budget as it is positive, growth oriented and puts forth realistic roadmap to attain sustainable economic growth.
The government’s thrust on renewable energy is clearly visible in the target of achieving 175 GW by 2022. India in the last 25 years India has done 34 GW and in the next 7 years we now have a target of 175 GW, comprising of 60GW wind energy which is an ambitious target for the industry and we welcome the move since it is in the right direction. The budget reiterates mission and vision of the government to achieve the following:
Y.C. Deveshwar, Chairman, ITC Ltd:
The FM has taken comprehensive steps in the budget to address the core issues of fostering growth with equity, boosting investments and creating jobs over the medium to long term. The focus on agriculture, infrastructure, health and education will enhance the social fabric and contribute to equitable growth. Targetted subsidies will meet the twin objectives of benefiting the poor as well as arresting the systemic leakages. Steps taken to improve the ease of doing business, particularly for the MSME sector, will give a fillip to job-creating investments. The strong measures to eliminate black money and to impose exemplary punishment is a bold step to curb the parallel economy and mainstream resources for productive growth.
Rahul Bajaj, former president, CII and chairman, Bajaj Auto Ltd:
This has been one of the best budgets in the recent past. Keeping in mind fiscal and other constraints it has done whatever a budget can do to promote savings, investment, and hence growth. Fiscal deficit for 2014-15 have been maintained at 4.1 % of GDP and for even 2015-2016, it has been kept at 3.9% only slightly higher than the 3.6% of the GDP which had been thought of. The finance minister has promised to bring down the deficit to 3% in three years’ time. Current account deficit for the current year is expected to be below 1.3 % of the GDP, but for this the FM has to thank reduced oil and other commodity prices.
Rana Kapoor, chief executive officer and managing director, Yes Bank, and president, Assocham
The government has announced an exceptional FY16 budget. Looking back, the truncated FY15 budget had set the tone for this year’s budget. While delivering on the need to take forward structural reforms and maintaining fiscal wisdom, FY16 budget has upped the ante in propelling growth in sectors with strong multipliers. The multi-pronged focus of the budget on core, industrial and social sectors will allow a synchronized easing of supply side bottlenecks, job creation with specific focus on entrepreneurship & MSMEs, readying a highly employable work-force along with improved standards of living. The gradual reduction in corporate tax rates from 30% to 25% over four years will provide impetus to corporate organizations and help in economic growth. This sets the stage for India’s growth recovery to become more balanced, sustainable and inclusive over the medium run.
Satish Reddy, chairman, Dr Reddy’s Laboratories Ltd:
The budget is a clear one, with a focused growth trajectory for the next three-four years, broadly in line with the expectations of India Inc.
The significant outlays on infrastructure of ₹ 70,000 crores and power projects that will provide a much needed additional 4k MW, are steps in the right direction towards revitalising the investment climate in the economy.
The announcement to implement the GST regime from April 2016 is a good step, which is long overdue. The reduction in the inverted customs duty structure of 22 items will help the Make in India initiative of PM Modi and is another positive step in the right direction.
One of the disappointing aspects of an otherwise good budget is the grossly inadequate outlay of just ₹ 150 crores for a fund that was announced to fuel innovation.
GVK Reddy, chairman and managing director, GVK group:
A very positive and a growth oriented budget with a strong focus on infrastructure development. Investments of ₹ 70,000 crore along with the risk sharing mechanism for PPP projects; setting up of a national investment and infrastructure fund; deepening of the bond markets etc. will help revive infrastructure investment.
Other ideas like abolition of wealth tax, creation of social security for all, focus on ease of doing business and a more predictable tax regime are all steps in the right direction to take the economy to a double digit growth over the next few years.
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First Published:3 Mar 2015, 01:10 PM IST
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