Even though the net impact of the Budget will take time to sink in, early reactions of various industrialists and executives veer from average to an above-average rating for the maiden Budget of the new government.
Here are quick takes from people cutting across sectors:
Chanda Kochhar, MD & CEO, ICICI Bank
The Budget has sought to lay out a prudent fiscal path for the country and address existing issues that have halted infrastructure investment. The Budget has announced a range of initiatives to boost investment & growth. The policy direction is clear, and as the decisions and plans announced are executed, I am sure the country will move back towards a robust growth path.
Malvinder Mohan Singh, promoter, Fortis & Religare
Pro-growth Budget looks to satisfy all sections of society and signals intent to contain expenses and keep deficit in check. The finance minister has done a good job in bringing out a Budget that goes the extra mile in spurring growth within the present constraints of the economy.
Kishore Biyani, Group CEO, Future Group
The finance minister has provided the right medicine for generating growth, domestic demand, innovation, entrepreneurship and urbanisation for India. This Budget will work as a catalyst for economic resurgence in India. From Manipur to Tumkur and from fishermen to young entrepreneurs, everyone has something to gain from this Budget.
CP Gurnani, MD & CEO, Tech Mahindra
We at Tech Mahindra feel that the only way forward for the IT industry is ‘collaborate, connect and co-create’ and this thought seems to echo by the government as the Budget proposes an allocation of Rs 7,060 crore this financial year for developing 100 'smart cities' in the country. Further, Jaitley’s Rs 500 crore National Rural Internet and Technology Mission aims at connecting the rural and urban India and thus connect the nation with technology.
Ajay S Shriram, chairman and managing director, DCM Shriram & head of CII
It is a visionary Budget keeping a two-three-year framework in mind. The finance minister has a target of 3 per cent fiscal deficit in long term. There is a high focus on job creation and sectors like agriculture and manufacturing, and for tax stability at the macro level. Specific issues on people front like sanitation, health, skills and subsidies are treated well in this Budget. Agriculture is a sector with 60 per cent population of our country and we are happy that it is treated properly.
Seshagiri Rao, joint MD & Group CFO, JSW Steel
An increase in plan expenditure by 26.9 per cent besides capital expenditure of Rs 2,47,941 crore by PSUs in current financial year is a welcome step. The targeting of plan expenditure on infrastructure development particularly rural roads, national highways infrastructure and railways network expansion supplemented by public private partnership is expected to revive the investment cycle.
Power has been recognised as another vital input for economic growth and comprehensive measures for enhancing domestic coal production and supply of adequate coal to power plants is been assured. However, in view of the current shortage of domestic coal for both steel and power sector, increase in basic customs duty for coking coal from NIL to 2.5 per cent and for steam and bituminous coal from 2 per cent to 2.5 per cent requires to be reconsidered.
The investment linked deduction to slurry pipelines for the transportation of iron ore will boost investment in this sector and help the steel companies to set up slurry pipelines to reduce their transportation costs. The investment linked tax incentive is also a positive for manufacturing sector.
Manasije Mishra, CEO, Max Bupa
From an industry standpoint, I am pleased with the Budget as it fulfils the key priorities from our Budget wish list primarily FDI hike, overall push to the health insurance segment and greater thrust to the PPP model. The hike in FDI limit to 49 per cent in insurance will boost industry growth and deepen health insurance penetration in the country. The opening up of the sector will pave way for greater innovation and better quality healthcare. Also, impetus to collaboration with banking correspondents and ample financial sector reform will further insurance penetration in the country. Government’s assurance to take up amendment to the insurance bill will also bring in greater focus on the sector.
The decision to invest in credible medical institutes and colleges along with digitisation in rural areas will enable utilisation of technologies like tele-medicine to enhance quality of healthcare and healthcare access in the country.
George Alexander Muthoot, MD, Muthoot Finance
The finance minister’s focus on expanding the purview of the banking system through both universal and differentiated bank model clearly indicates its thrust on financial inclusion by providing banking services to the country’s unbanked population. Introduction of uniform KYC norms and its inter-usability across the entire financial sector too will simplify processes further.
The proposed two bank accounts in each household under the government’s financial inclusion mission and considering them worthy for credit, the government seems on the right path to unlock the massive potential of emerging India.
Hemant Kanoria, CMD, Srei Infrastructure Finance Ltd
I feel the proposed move to provide exemptions to banks from CRR and SLR obligations by linking those to long-term infrastructure loans is a masterstroke and can prove to be a game-changer in the field of infrastructure financing. It will also help mobilising funds through issue of infrastructure bonds.
The proposed Infrastructure Investment Funds in the lines of real estate investment funds is another positive step. We have been advocating for allowing tax pass-through for such funds for quite some time. This will help mobilise more funds for infrastructure from both India and abroad. In addition, addressing the concerns of the foreign portfolio investors and bringing clarity on long-term capital gain tax issue will facilitate more fund houses, presently operating from overseas, to shift their base to India.
Tulsi Tanti, chairman and MD, Suzlon Group
The big shift in policy initiatives will revive and promote manufacturing thereby paving the way for 7 per cent growth. Key announcements on investments in physical infrastructure development, direct allowances for new investment in plant & machinery, FDI, GST implementation and long-term financing options are likely to boost manufacturing. And the budget proposal to increase clean energy cess are likely to boost investment in the wind energy sector which is likely to grow by 50 per cent in 2014-15.
Pradeep Jain, chairman, Parsvnath Developers
For the first time after the slowdown the Union Budget 2014 gives a boost to the real estate sector.
Government’s emphasis on PPP shows its commitment towards a collective growth. Allocation of Rs 7,060 crore to develop 100 smart cities is certainly going to promote the sector on global front. Funding had always been a concern for us as developers. Foreign investors were also shying away due to ambiguity in rules. With implementation of REITs and relaxation in FDI norms, the problem of fund crunch will get mitigated.
Umesh Revankar, MD, Shriram Transport Finance
The Union Budget has come on expected lines and emphasises the thrust on the revival of the growth in infrastructure and manufacturing sectors. What we are glad to see is that the government is coming forward to resolve the mining issues, including the iron ore and coal mining bottlenecks. This we see as a positive for the broader economy.
The finance minister has rightly focused on the MSME sector and provided much needed impetus to it by providing various friendly framework with focus on reviving the sector. The government first Budget seeks to draw a road map to address various issues which will not only stimulate the economy, but also will be the foundation stone for setting it on the high growth path in the coming years.
Kapil Wadhawan, chairman & managing director, DHFL
We welcome the finance minister’s recommendations towards promoting home-buying amongst India’s common man. It is helpful that the income tax deduction for interest on housing loans has been raised. The money for affordable housing and extending incentives for housing loans will help the housing industry in India in a big way. This is significant considering that India suffers a huge housing shortage of close to 63 million units.
We are happy with the announcement of the proposed differentiated banking framework. It should address the huge agenda in the housing space. India will benefit from having mortgage banks like those in the Western economies. The net impact of the Budget is positive for the HFC sector.
BD Park, president & CEO, Samsung India
Measures on tax reforms like advance rulings, tax settlement mechanisms and APA (advance pricing agreements ) etc will contribute to improving investors' confidence and removing uncertainty regarding taxation. The introduction of inter-quartile range in transfer pricing as well as the setting up of a committee to evaluate retrospective taxation are positive steps. Outlays for improving infrastructure in ports, roads, airports, smart cities as well as education related initiatives and the funding model resonate well with the country's growth plans.
MP Vijay Kumar, CFO, Sify Technologies
The government has been very practical in ensuring continuity and making some socially important schemes productive. Secondly, they acknowledge that banks need to be capitalised on priority without which, industry credit needs cannot be met. There is a huge emphasis all through the Bbudget proposals on PPP. Effective governance will result in successful PPP facilitated infrastructure growth. This might also give an impetus to the smart cities plan; because eventually these cities would require utilities and connectivity. There might be a hidden gem in the Rs 10,000 crore for venture capital fund for encouraging startups, a fantastic push for entrepreneurship. The fiscal deficit of below 3 per cent for next year is highly welcome. The discipline here is to ensure effective government expenditure.
Sumit Mazumder, chairman and managing director, TIL Ltd
The Budget is expected to bring a lot of manufacturing companies into growth mode. Another important thing about this Budget is focus on education. India is likely to have the highest number of young people by 2025 and education sector needs more higher education institutes for a better future of India.
Naushad Forbes, director, Forbes Marshall
The rhetoric and principles of this Budget were in the right direction. However, I feel the Budget should not be judged from what we heard, but how it will be implemented. The devil lies in detail.
Shishir Baijal, chairman & managing director, Knight Frank India
To begin with, REITs being awarded a pass-through status will attract significant investments into the sector which is the need of the hour. An allocation of Rs 7,060 crore indicates that equal attention has been paid to infrastructure growth which is often inter-linked with demand for real estate. Various other monetary incentives such an allocation of Rs 4,000 crore towards affordable housing backs the present government’s vision of providing housing to all by 2022. Overall, this Budget will ensure that sentiments remain upbeat for the next few years.
Anshuman Magazine, chairman and managing director, CBRE South Asia
Many pending decisions in real estate and infra sector have been taken. I would rate this as a above average to a good Budget. FDI limits are reduced which has opened doors to newer investments.
(Edited by Joby Puthuparampil Johnson)