Deepak Parekh, Chairman, HDFC Ltd
Growth budget that now needs focus on execution
Describing the just announced Union budget as a growth budget, Deepak Parekh, chairman, HDFC Ltd, says he is happy that the finance minister has “very rightly and boldly” backed the spending on infrastructure, including logistics and urban infrastructure. However, what he now feels is important is to focus on looking at the aspects of execution of these projects. All of these, he says, need to be done in a time-bound manner and within a 12 month timeframe and the challenge at the moment is that many construction companies are in doldrums with some under NCLT for instance. Delighted that the finance minister Nirmala Sitharaman chose to stick to stick to the celebrated American adage: “if it ain’t broke, don’t fix it”, Parekh says, it is good that the finance minister did not take to tinkering with the tax rates or opting for rebates. This, he says, was crucial considering that the revenue generation was good during the year with tax collections stayed buoyant with a net higher tax revenue than last year. The corporate tax collections posted a good increase and so was the case with income tax and with GST. Add to this, exports also increased and so did the inward remittances. Today, despite crude oil prices at a high $ 90 to a barrel, he says, we have enough forex reserves to counter this. He has also hailed the allocations made to ensure more affordable housing.
Kiran Mazumdar-Shaw, executive chairperson, Biocon Ltd & Biocon Biologics Ltd
Budget could have weighed more on the side of informal sector, middle class & R&D
A balanced budget. That is how Kiran Mazumdar-Shaw, executive chairperson, Biocon Ltd & Biocon Biologics Ltd, describes the just announced Union budget. This, she says, needs to be viewed in the backdrop of the various constraints that are before the exchequer today, given the need to meet competing demands on resources. Another point that needs to be kept in mind while looking at the budget is the aspect of timing. “We are barely back to 2019 levels of GDP (Gross Domestic Product) and therefore the finance minister has played it safe,” says Kiran Mazumdar-Shaw. She also describes the budget as “fiscally prudent” with the finance minister opting to keep the fiscal deficit at 6.9 per cent. That the finance minister has chosen to focus on furthering a digital economy and in creating the digital architecture, are all welcome measures, says the founder of India’s largest biopharmaceutical company. The 35 per cent increase in outlay for capital expenditure stands out about the budget is notable given the crucial ripple effects it can have in terms of kick starting expenditures on infrastructure and in job creation. It could end up spurring an inclusive economic development model, says Kiran Mazumdar-Shaw. She was however a bit disappointed that the pharma R&D did not get a special call out in terms of incentives. She says, “I just hope that they realise that the pharma sector has to deliver non-linear growth and at the moment, this very R&D intensive sector, is pursuing low-risk innovation and needs to get to high risk innovation. But then without incentives there is very little scope to attract investments into high-risk innovation given that it also comes with a high risk of failure.” Kiran Mazumdar-Shaw also felt the budget could have done more for the informal sector, where jobs really need to get created and growth needs to pick up. Similarly, the budget, she felt, could have also done more for the middle class by providing either some tax reliefs or through measures that could have addressed the issues of income inequalities or the polarisation of wealth.
Naushad Forbes, Co-Chairman, Forbes Marshall and the former president of the Confederation of Indian Industry (CII)
Stands out for message on stability but an inward looking budget
This budget sends out a clear signal on stability with no changes in tax rates and this is a positive sign, says Naushad Forbes, co-chairman, Forbes Marshall and the former president of the Confederation of Indian Industry (CII). While he is in favour of continuity in policy, Forbes has been a bit disappointed by what he calls a continuity in the trend towards tariff increases. One of the drivers for high growth, he says, is to be much more internationally oriented and to be a bigger trading nation with a clear export orientation and for this tariffs would have to come down and ideally get to a zero tariffs regime. He therefore, while hailing the budget as solid and focussed on stability, found it a bit inward-looking. He however was happy at some of the new measures introduced in the budget especially the one to open up the defence R&D budget for Indian private sector (startups included). His concern at the moment is about sustaining the growth momentum and hopes the country would look at not just the 8.5 per cent growth next year but sustaining it in the subsequent years too.
Suneeta Reddy, managing director, Apollo Hospitals
More could have been done on healthcare
“We are really riding the growth momentum and the high outlay on capital expenditure is remarkable,” says Suneeta Reddy, managing director, Apollo Hospitals. She also sees this as a budget for the next generation with all the right focus on digital, national digital health mission, on fintech, and also for recognising digital currency as a fact of life and to also show the concern for the environment. However, on healthcare, she feels, more could have been done. The big pain point for the healthcare sector is on the GST (Goods and Services Tax) front and having no set off against input tax and this makes it all very expensive considering that GST is still at 18 per cent for many of the services that a health care corporation uses. But then, she says, this is something that the industry could take up with the GST council and make a representation there.
