Union Budget 2019: Industry Reactions

Finance Minister Piyush Goyal presented the Interim Budget in the parliament. He gave the highest-ever tax reduction to the middle-class salaried people. Individual taxpayers having annual income up to 5 lakhs will get a full tax rebate. Individuals with gross income up to Rs 6.5 lakh will not need to pay any tax if they make investments in provident funds and prescribed equities.

"This will provide the benefit of Rs 18,500 to 3 crore middle-class taxpayers self-employed, senior citizens," he said, adding the number of beneficiaries will go up for those who have made investments in mediclaim and pension.

No tax will be deducted on interest earned on bank and post office deposits of up to Rs 40,000 annually, up from Rs 10,000 currently.

The Budget also proposed to exempt tax on notional rent for unsold housing units for two years.

Goyal also proposed that benefit of rollover of capital tax gains be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains of up to Rs 2 crore.

However, it can be exercised once in a lifetime, he added.

 The Income Tax department will move towards faceless assessment and verification of returns, Goyal said Friday.

Standard deduction has been raised from Rs 40,000 to Rs 50,000 which will benefit three crore, salaried individuals.

Here are the industry expert views on the Union Budget 2019.

Tanvee Gupta Jain, Chief India Economist, Ubs Securities India, Mumbai
"The fiscal deficit target for this year was largely in line with market expectations but the fiscal deficit target at 3.4 percent for full year 2020 was a little disappointing."

"Populism remained the focus ahead of elections. The budget provided a consumption boost to farmers and middle-class households. However, it will further delay the much needed investment cycle recovery."

Anubhuti Sahay, Senior Economist, Standard Chartered Bank, Mumbai
"The fiscal deficit targets for FY19 as well as FY20 are far better than market expectations, though there is a slight slippage... It is likely to bring a lot of relief to the market, which was excessively worried about the massive fiscal slippage."

"Having said that, what we would like to see are its revenue projections and it is possible that the projections might be ambitious at this particular juncture. Maybe once we get the numbers going forward there can be some worries again around the fiscal deficit, whether it can be adhered to or not."

"The budget was focused on farmers and the middle class that should help consumption and probably support the domestic growth."

Shilan Shah, Senior India Economist, Capital Economics, Singapore
"Pretty much in line with what was expected. The one thing that has surprised is the extent of election-related sweeteners that have been rolled out."

"So, we thought there would be less space to announce big giveaways, but the government has actually managed to pull it off, at least on paper."

"I think ultimately, their spending plans look very unfeasible to me, so I wouldn't be surprised to see spending get cut later in the year."

"It looks pretty difficult to achieve but it seems to be based on quite ambitious revenue projections."

"The biggest stops that we have seen are the giveaways for farmers especially."

Garima Kapoor, Economist And Vice-President, Elara Capital, Mumbai
"The budget is clearly farm-focused, with elections on the mind. Farmers, age-old, unorganised sector, MSME and middle class - they're all finding favour, with the agricultural sector getting the biggest support."

"The 750 billion rupees in the Centre's budget for the farmers' scheme is a huge number, so we need to watch out for where the funding is coming from. If the scheme is implemented well, you can expect consumption to be supported next year."

"The catch here is, even if the BJP does not come back to power in May, the new government will also implement this scheme because no government will want to look anti-poor or anti-farmer. The government will have to find fresh resources to the tune of 750 billion rupees."

"Although the equity markets will be happy because of the consumption boost, the bond market may not be, as we need to see the intricacies of how much is getting funded through what route and what deficit numbers."

"If the government has provided enough consumption boost, then RBI would want to take a cautious stance and would not undertake a rate cut."

Rupa Rege Nitsure, Group Chief Economist, L&T Finance Holdings, Mumbai
"It's more of performance reporting and aspirations than any big-ticket changes. This was expected as it is an interim Budget valid for a few months. It needs to be stated in unambiguous fashion that the credit for inflation control and AQR primarily goes to the RBI."

Abheek Barua, Chief Economist, Hdfc Bank, Delhi
"This is on expected lines. There is a slight slip in fiscal deficit."

"The new income support scheme is tepid, in terms of the actual numbers. It should not lead to a blowout in the fiscal deficit if it indeed is part of the budget when it is finally announced in full form."

"The only issue here is that there is no substitution away from indirect benefits in the form of subsidies to a direct transfer. This is on top of some benefits they are receiving."

"If this is the model going forward, let's see what fiscal implications it might have."

"This is a top-up on an existing regime and that is something that worries me, but not at this stage."

Rajan Malhotra CEO & Founder Otodato 
Overall a good budget. Government’s vision 2030 of reducing Petroleum imports by promoting electric vehicles and energy storage devices is laudable and indicates a transformation in the automotive industry in on the cards. The automotive value added services would also need evolve in accordance to the emerging trends and telematics data would play the most important role in the growth of our automotive industry and its ecosystem partners .

Ashok Varma, Leader - Social sector, PwC India
"Pradhan Mantri Shramyogi Man Dhan Yojana seems to be an extension of the existing Atal Pension Yojana(APY). While APY was meant for workers in the unorganized sector, the new scheme includes marginal wage earners from organised sector as well. Another difference is the upper age limit of 60 years in the new scheme as against 40 years in APY. It is a welcome move and would further provide social security to a larger number of marginal wage earners in the country. Being contributory and designed in line with NPS(National pension scheme), this also makes economic sense.”

Anand Kumar Bajaj, Founder & CEO PayNearby

“The “Thank you note” to Taxpayers, made us feel officially proud for the first time. The focus of government on rural and startup is clearly visible and this is a long-term impact work. We are glad that we are a Startup working towards helping accomplish critical activities which are part of the vision of government. Certain modules of startup growth hack and customer retention have been applied to reward good behaviour and we stand validated by the government for our business models. 

Farmer support income through aadhaar is suggestive of the fact that the construction has begun on the Base (Aadhaar). True grass root level of marginalised beneficiaries have been identified amidst migrants, nomads, small farmers, small taxpayers, small businesses and retiring small salary earners. The budget has been well received, benefits are immense and the future is bright. The environment feels like Diwali in February.”

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 years 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.”

Suraj Malik,  Partner -Transaction Tax/ Tax & Regulatory Services, BDO in India  
"An interim budget by an interim FM still with a clear focus on long term fundamentals along with targeted proposals crucial to address the current economic, political and social situation. The interim budget focused on inclusive development and tax concessions. Policy announcements for agriculture & allied activities, rural communities and welfare of the workmen is outlining the Government’s vision statement for the next term."

Prakash Tulsiani, Executive Director & CEO – CFS & ICD, Allcargo Logistics Ltd
“Logistics will play a key role in propelling India to become a USD 5 trillion economy over the next 5 years. The interim budget has broadly outlined the government’s vision to improve the sectorial competencies of Indian logistics and empower supply chain capabilities. A 21 percent allocation for the North Eastern region of the country to Rs. 58,166 crore has the potential to uncork the untapped logistical efficiencies of the region. It will also boost connectivity-driven initiatives to bring the region within the broader national logistics framework to bolster economic growth and development within NE and create employment generation opportunities. The budget provides a wider blueprint of the government’s resolve to continue on the path of the logistics sector empowerment with pro-industry measures like Ease of Doing Business and expediting inter-state freight movement through simplified e-way bills. Emphasis on inland water development is a welcome move. The tax sops will result in more disposable income. This will lead to more discretionary spending, boosting the movement of goods and benefiting the overall logistics sector.”

Nimish Gupta, MD South Asia, RICS

"The sanctity and prudence generated in the overall economy, on the back of continuous reforms over the last three years was 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.

Sunil Gupta, Founder & Director, ExportersIndia.com

Sunil Gupta, Founder & Director, ExportersIndia.com, "With the belief that India is poised to be a 5 trillion economy, the Budget 2019 aims at building the social and physical infra to ease living. The income support for farmers, increase in MSP, 2% interest subvention for fisheries and animal husbandry, schemes for unorganized workers have brightened the rural economy and agriculture sector. In Government projects, the decision to source 25% material from SMEs, 3% from only women-owned SMEs is a case of lead by example which with other following suits would usher more opportunities to the doorstep of SMEs. Quarterly return for businesses less than 5 crore, the promise of further exemptions in GST, the GEM (Govt E-Marketplace) platform where MSMEs can showcase and sell their products are all steps that have been done with the aim is to empower the MSME sector. Interest subvention for SME for loans up to Rs 1 crore is yet another positive. The path set to tackling unemployment by becoming the manufacturing hub of the world is another promising note. These measures along with digitization and automation will help the SMEs and online businesses become a bigger force to reckon."

L C Singh, Vice Chairman, Nihilent Limited
“The impetus provided by the government in propagating the advancements in Artificial Intelligence for building nation’s assets is indeed heartening to know. The plan to set up a National Centre for AI augers well for positioning India at the centre of global innovations.”  

N Chandramouli, CEO, TRA
The 2% interest subvention for MSME is definitely a great thought along with the easing of loans through psbloansunder59minutes scheme. Together they will give a boost to the industry which contributes to 69% employment in the country. This will also boost the adjunct services industry that caters to MSME sectors like advertising, market research, training, and public relations which in turn will also have a positive cascade on the services sector.

Amit Modi, Director ABA corp and VP CREDAI Western UP
In term of real estate we believe that benefits under Sec 80(i)BA being extended for one more year, for all housing projects approved till end of 2019-2020, and benefit of rollover of capital tax gains to be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains up to Rs 2 crore; which can be exercised once in a lifetime are the biggest take away from this year’s budget, in addition for existing home buyers income tax relief on Notional Rent from unsold houses which has now been extended to 2 years, along with  increase in TDS threshold on rental income raised from Rs 1,80,000 to Rs 2,40,000. In general, we would like to congratulate the Finance Minister for a wholesome balanced budget, we believe that the move to increase the income tax slab to Rs 5,00,000 is a very positive move. This is a helpful step towards increasing disposable income for a first-time buyer planning to purchase a real estate asset. We also look forward to the outcome of the Group of Ministers examining how prospective house buyers can benefit under GST, which we believe should not only benefit them on paper but practically as well.

At the same time we would have preferred a Single Window clearance for all Real Estate Projects just like the ones extended for Movie Industry, and increase in exemption on interest on a home loan to at least Rs 5,00,000 per annum.

Sunil Gupta, MD and CEO, Avis India
"The statements given by the government in today'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, the 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."