Union Budget 2017: After a huge amount of uncertainty in the wake of the demise of IUML MP E Ahamed after he was rushed to hospital on Thursday morning from Parliament during President Pranab Mukherjee’s address on Tuesday morning, the decision was taken to present the Budget as per schedule on Wednesday morning after paying due respect to the departed soul. The decision was taken at the highest levels of the government and Speaker Sumitra Mahajan. Expectations were for FM Jaitley to present a standout budget that would not just introduce a number of reforms, but also provide a lot of income tax exemptions to give relief to the wider public in the wake of the inconvenience caused by Centre’s demonetisation drive that led to the ban on Rs 500 an Rs 1000 currency notes.
Expectations were also rife that there would be a major announcement on indirect taxes too to take a lot of weight off the beleaguered corporate India’s shoulders and bring in measures to ease the conduct of business in India. Did FM Jaitley live up to the expectations that the public and corporate world had from him? Will populism, after all there are assembly elections around the corner, trump hard core economic realities?
Arun Jaitley started his speech by saying, “The Govt is now seen as a trusted custodian of public money, I express gratitude to people for their strong support. Our Govt was elected amidst huge expectations of people, the underlying theme of expectations being good governance. The focus will be on energizing our youth, to reap benefits of growth & employment. We have moved from a discretionary administration to a policy-based administration.” Here is what the experts and analysts are saying:
Editor’s Take: Job creation, tax relief, digital payments & rural revival…@ShereenBhan gets you the big expectation from #Budget2017 pic.twitter.com/QbdsLeCcdx
— CNBC-TV18 News (@CNBCTV18News) February 1, 2017
How analysts reacted ahead of Budget presentation:
1. Madhusudan Kela on Budget day had this to say to TV channel ET Now, “Will watch out for sops for auto, housing and textiles sector. Tinkering with STCG tax would cause volatility in the market. Worst case scenario for LTCG Tax would be for definition to be changed to 3 years holding period. Market prepared for a slight change in definition of LTCG Tax. If we exceed 3.5% fiscal deficit, cut in interest rates will be delayed.”Speaking to ET Now, Rashesh Shah said, “Government will have to push public sector capex till private sector capex revives. Hope to see cut in corporate tax rates. An increase in tax collections will give Centre room to cut corporate tax rate.”
2. Speaking to ET Now, Rashesh Shah said, “Government will have to push public sector capex till private sector capex revives. Hope to see cut in corporate tax rates. An increase in tax collections will give Centre room to cut corporate tax rate.”
3. Sandeep Tandon said, “Government needs to move toward continuous ETFs, divestment,” he further told ET Now, “Markets will not see any significant fall post Budget.”
4. Motilal Oswal’s Raamdeo told ET Now, “Mutual funds will not be impacted much from changes in LTCG Tax. Changes in LTCG taxation would have only temporary blip on investing in equities.”
5. Gautham Chhaochharai had this reaction on ET Now, “Momentum of earnings cut will not be a drag on markets. FIIs keenly watching fiscal deficit roadmap.”
6. In an exclusive chat with ET Now, Amitabh Kant, CEO,Niti Aayog,GOI, said, “Biggest challenge for Govt is to create jobs. Demonetisation may hurt India’s growth marginally. Need to ensure digital payment play a critical role going ahead. See a dramatic shift towards digital payment in India. Need huge emphasis on railways, roads. Need to get private sector players to invest in railway stations.”
7. EY India Insta-Analysis on Budget 2017: Exemption for interest payments for housing loans may go up to 2.5 Lakhs from the current 2 Lakhs. Reduction in Corporate tax rate expected. Not many changes expected on excise & service tax with proposed implementation fron July 1 2017.
8. In a conversation to ET Now, Hiren Ved said, “Believe divestment best way for Govt to raise resources. Increase in taxation on equities will spook the markets. Best Move is to keep STCG, LTCG tax rates unchanged. Most critical For markets is Fiscal deficit target & corp.”
9. Meanwhile, S Naren while chatting to ET Now said,” We need to give incentives for financial savings. Increase in holding period for capital gains taxation will not.”
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10. While chatting with ET Now Ramesh Damani said, “Minor tweaks to LTCG Tax will not move markets. STCG tax would be worrisome for markets.” HE further added, “Looking forward to Govt’s disinvestment target.”
11. CEA Arvind Subraman speak to ET NOW and says, “Fiscal deficit mark is consistent with steady consolidation path. Government not breaching any target on fisc front; still on consolidation path. Public investment allocation rising will help shortfall in pvt investment.” He further added that Income tax rate being lowered will spur private sector growth. Next year will be first year of implementation of GST. Center’s indirect tax kitty will be challenged next year. Subraman also said that Tax-GDP ratio will go up marginally on pressure from indirect taxes.
He also raised some hope of meeting disinvestment targets for FY18.
12. Meanwhile, Achin Goel, Head, Wealth Management & Financial Planning, Bonanza Portfolio Ltd said, that overall, budget was as per expectations with no major changes. Expenditure’s are well directed towards economic growth and development and increased revenues are expected to come by passage of GST and listing of more PSU’s apart from other sources. With fiscal deficit projected under 3.2% for FY 17-18 and under 3% for subsequent years, current CPI at 2.6% and planned to be under 6% in coming years and GDP projected to be 7.2% and 7.8% for FY 17-18 and FY 18-19, India for sure is shining again !!
13. In the post-budget reaction, Mr. Parth Nyati, COO, TradingBells, says that this is a very good growth oriented budget meant to benefit rural and urban population alike. IPO for public sector undertakings like IRCTC, IRFC and IRCON is a pleasant surprise and would ensure more retail participation. It is an extremely smart move for divestment. Reduction of corporate tax would benefit 96% of the Indian corporate having turnover less than 50 corers. We can see SMEs getting a positive boost from this move. Long term capital gain tax on equity markets remained unchanged which will further boost investor participation.
14. Deepak Parekh on budget was quoted by ET Now as saying, “Marginal increase in fiscal deficit acceptable till growth returns. Trade imbalance between India & China remains a concern.” Pareskh further added that trade imbalance between India & China remains a concern.
15. Economic Affairs Secretary Shaktikanta Das, in his view over budget said that the Budget is strong with regard to fiscal numbers and reforms. “Budget has around 11 major reforms like affordable housing, income tax rates. Timeline for listing of CPSEs will be fixed soon and target set for FY18 divestment very much achievable,” said Das. Further in his comment to ET Now he said that the panel has been set up for monetisation of land assets and the nation is becoming more globalised and is not in favour of protectionism. “Indian economy is resilient to withstand uncertainties around the world. Have reached a position where FIPB can be abolished. No proposal to approve all FDIs via automatic route at present,” he said. Later he raised his concern over the issue in which the Governement has not taken any view on rolling out Universal Basic Income scheme. He also said, “Decreasing corp tax & removal of exemptions should go in tandem. Corporate tax rates to remain the same for next FY.Broadly there is commonality in terms of GST rates. Nominal GDP growth assumed at 11.75 for FY18.”
16. In the latest, Founder & CEO of Paytm Vijay Shekhar Sharma reacted after the presentation and said the government has pushed the digital theme in every area of the budget and so it can be termed as a ‘digital economy budget’. Sharma said, “Every person from a small shops to consumers are pushed towards the digital economy. Tax benefits, incentives to use digital payments and extending loans based on a digital footprint will create a larger merchant ecosystem for digital payments.”
17. Finance Minister Arun Jaitley today proposed extending the time period for availing tax benefit for startups to three years in the first seven years of existence, which could be termed as a big relief to start-ups. On this note, CEO and Founder of cab aggregation company Aaveg, Ashok Vashist said that Union budget 2017 looks supportive towards startups. In his take on budgetary proposals Vashist said, “With the profit linked deductions for startups reduced to 3, it becomes a healthy scenario for investors who earlier had their investments stuck for 7 years. More funding opportunities will uplift the entire startups ecosystem.
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18. Industrialist Anand Mahindra today welcomed the Budget proposals on cleaning-up political funding and abolition of the FIPB as “big signals” of the government’s mindset illustrating its determination to shed legacy and step firmly into the future.“These steps are big signals about the government mindset. (They) show its determination to shed the skin of legacy and step firmly into the future,” the Mahindra group chairman wrote on micro-blogging site Twitter.
19. Dinesh Agarwal, Founder and CEO of IndiaMART.com praised the union Budget 2017 by saying that it has laid the foundation of an enterprise and business pro India which according to him are the important factors to boost GDP. “The budget 2017 has laid a foundation of an enterprise and business pro India. Important factors to boost GDP are thought of the Union Budget 2017, he said.” “Most important elements such as young demographic dividend, skill development, women employability, digital education, transport have been well accounted for. Also, it is reflected that the burden of taxation is more evenly split with all demographies of the society,” he added.
20. Neelesh Talathi, CFO-Pepperfry.com, says the Union Budget 2017 “Promotes Growth, Builds Digital India”. The Union Budget 2018 has set the right priorities as India takes head-on the challenging global economic environment. The emphasis is rightly on growth with a slew of initiatives including higher allocation to infrastructure, increased emphasis on affordable housing & more disposal income in the hands of middle class Indians.
21. Union Budget 2017 was presented by Finance Minister Arun Jaitley today and his budgetary proposals have elicited a number of reactions. In the latest, Founder & CEO of Paytm Vijay Shekhar Sharma reacted after the presentation and said the government has pushed the digital theme in every area of the budget and so it can be termed as a ‘digital economy budget’. Sharma said, “Every person from a small shops to consumers are pushed towards the digital economy. Tax benefits, incentives to use digital payments and extending loans based on a digital footprint will create a larger merchant ecosystem for digital payments.” Sharma also spoke in the favour of incentives that would be provided for labour intensive sectors which includes housing, farming and dairy, and said that this will help SMEs to create new jobs.