Budget Live Reactions: Arun Jaitley delivered a bold, far sighted budget, says TCS’ Chandrasekaran

Finance Minister Arun Jaitley has presented the first full year Budget of the NDA government…

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Finance Minister Arun Jaitley presented the first full year Budget of the PM Narendra Modi-led NDA government today in Parliament.

Here are top reactions:

N CHANDRASEKARAN, CEO & MD, TCS
“The FM has delivered a bold, far sighted budget that will help raise the country’s profile as an investment destination. It aims to make structural changes that will help drive higher corporate investment on a sustainable basis. These include the commitment to simplification and rationalization of the taxation structure and setting a clear roadmap of reform for the next four years. However, the short term impact arising out of increase in surcharge and service tax are matter of concern.

The move to encourage use of financial products and services among a larger proportion of the population as well as the efforts towards monetization of gold are great building block to build a vibrant and deep financial services sector. The government’s moves to encourage fund managers to relocate to India will also drive greater integration of the India into the global financial services economy.”

BHASKAR PRAMANIK, CHAIRMAN, MICROSOFT INDIA
“The Finance Minister has presented a broad-based Budget focused on accelerating India’s inclusive growth. The Budget reiterates the major programs and initiatives that have been previously announced – Jan Dhan Yojana, Skill India, Swach Bharat, Make in India and Digital India.

The Budget retains the focus on financial inclusion, education, health and agriculture. It has increased focused on infrastructure development, housing and manufacturing in India. Overall, Budget 2015 is wide in its scope and takes into account the interests of diverse sections of society – middle class, farmers, youth, aged and the disabled. It endorses a vision of India where there is a house for every family with24 hour power, potable water, and all accessible by road, and where at least one member of the family is employed. And all by 2023, when India celebrates its 75th year of Independence. The FM also talked about building a better social security system for its citizens to provide financial security.
The budget talked about financial discipline, a monetary policy framework with RBI that will keep inflation at less than 6%, but look at possible double digit growth. The FM is looking at reducing the fiscal deficit to 3% but in three years’ time to release additional investments.

The focus on infrastructure and housing investments is good, as it will kick-start the economy and have a ripple effect across all Industries. The FM understands the need to kick start infrastructure projects through increased investments, the need to revitalize PPP with the GOI taking additional risk.”

SANJAY KAPOOR, CHAIRMAN, MICROMAX INFORMATICS
The Union Budget 2015-16 was very critical as it outlines new government’s commitment to reinvigorate the economy, kick-start investment cycle and also maintain fiscal prudence. They have the advantage of a stable political regime & lower inflation, courtesy oil prices! In the light of these two things that I expected from the budget were growth & infrastructure enhancement, including Digital infrastructure like access, backhaul & storage. My first reaction after hearing the budget speech of Finance Minister is that government is making a concerted effort to ‘listen’ to the stakeholders. It’s a sincere approach to problem solving with growth, competitiveness, inclusiveness, realism & long term transformation at the core.

SOON KWON, MD, LG INDIA
“Overall, the budget is forward looking, progressive and practical, with a very clear direction for future. It reflects Government’s focus on increased investment in infrastructure growth and generating skill based employment. We welcome the changes in taxation policy, with the reduction in corporate tax over four years and rationalization of custom duty. The determination towards GST and the proposed implementation will boost the industry through the state of art indirect tax system. Efforts being made by the current government towards achieving its vision of ‘Make in India’ policy is evident in this budget and hopefully it will turn manufacturing in India into a more profitable and business-friendly proposition. Measures to curb black money, job creation through revival of growth and investment will benefit middle class tax payers.”

RAKESH DESHMUKH, CEO AND CO-FOUNDER, FIRSTTOUCH
I would like to thank Finance Minister Shri Arun Jaitley for the special attention on domestic manufacturing. It’s a great budget for mobile phone manufacturing.  The reduction in corporate tax from 30% to 25% over a four years period is very appreciable The move to reduce the burden on younger companies by reduction in the rate on income tax on royalty and fees for technical services to 10% from 25% is very positive. Rs 1,000 crore for promotion of startups particularly in the technology sector brings great hope and encouragement for startups like us to develop more patent technology innovations to help promote “Make in India” & “Made in India” initiative. This time budget is for betterment of the entire economy.

R MUKUNDAN, MD, 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.”

GAGAN BANGA, VC & MD, INDIABULLS HOUSING FINANCE
“The FM has cleared the cluttered, and at times convoluted, tax regime and has ushered in a more cogent and predictable tax environment. Good infrastructure is the foundation of meaningful and sustainable GDP growth. The thrust on infrastructure in the budget is a welcome step in this direction and signals the government’s intent and understanding of the importance of this key sector. The finance minister underlined inflation management as another area of priority for the government. Not only will this aid robust economic growth, a low to moderate inflation environment will also ease populist pressures on the government. Availability of low cost capital is a key enabler for the real estate sector. The sector has a high multiplier effect on the economy and affordable housing is key to realizing the social dream of Housing for all. The tax overhaul to permit the listing of REIT will provide a much needed source of capital to a sector that is hungry for efficient funding.”

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:

·         Affordable sustainable energy for all
·         Low carbon economy
·         Achieve energy security
·         Long term sustainable economy & sustainable jobs
The government’s commitment to green India manifests in some of the additional measures such as increasing the coal cess from Rs. 100 to Rs 200 thereby providing impetus to clean energy.

We appreciate the focus on providing impetus to the Make in India vision by giving clarity on taxes, definitive measures to ease of doing business in India and encouraging domestic and foreign direct investment. However, in our view to provide further stimulus for investment in captive renewable power by the manufacturing units, interest rebate should be given, which will also ensure success of Make In India.    Further, innovative financing measures such as infrastructure bond, creation of mudra bank for MSME sector also augurs well for Make in India. So overall we see the budget has provided several initiatives to boost manufacturing in India.

We are confident that the renewable energy in India will take off from here and witness exponential growth in the next few years and will power a greener tomorrow.

HIMANSHU RATH, FOUNDER CHAIRMAN, AGEWELL FOUNDATION
“So far as older persons are concerned, for the first time Government of India has really done something remarkable in the budget. Every section of older persons, particularly underprivileged and destitute will certainly get much more from this budget. With the provisions like Atal Pension Yojna financial security will be ensured for millions of old people and their family members. In view of ever-increasing population of older persons, government’s focus on welfare and empowerment of older persons is laudable.”

PROF. THILLAI RAJAN A, ASSOCIATE PROF DEPT OF MANAGAMENT STUDIES, IIT, MADRAS
“The effort to promote technology-based entrepreneurship is laudable in this Budget – this would be a big boost to the graduates of the engineering and technology institutions of the country. The initiative to make technology as an integral element of entrepreneurship is also consistent with the “Make in India” policy focus of the Government.

I am glad that there is additional thrust on the infrastructure sector in the Budget 2015. With several projects experiencing delays and muted interest among private investors in recent years to invest in infrastructure projects, the focus of the Government to create new vehicles to attract private sector investment is in the right direction. I hope this is followed by appropriate changes in enabling the environment to make investment flow a reality.”

VAIBHAV SINGHAL, MD & CEO, SAVEMAX
“It’s a progressive and well balanced budget that will lay the foundation of major structural changes in the Indian economy in the coming years. The hike in individual tax exemption is a welcome step that will give more money in hands of the people.”

ROHIT GADADIA, FOUNDER & CEO, CAPITALVIA GLOBAL RESEARCH
“Overall it was a dream budget Corporate taxes down, GAAR postponed, crackdown on illegal money, wealth tax abolished. The major crux of the budget is that it brings an ideological shift. Ease of doing business, social security net for weaker sections Major takeaways from the unionbudget2015 were high stress on Make in India, rural development this will surly bring a surge in job creations. Health insurance premium rebate is going to help out the AAM JANTA. Tax free infrastructure bonds for projects in Railways and roads will boost up investments in Infra and railways and this will be reflected on the stocks.
Markets were up by a percent while the budget was on and later on slipped to the lows and remained volatile. It’s expected to remain volatile as the budget announced was at par with the expectations of D-street and thus market has already discounted the noise going on in the market.”

VINAY GUPTA, FOUNDER AND CEO, TRIPFACTORY
“Overall the budget is growth oriented and the announcement of schemes like Mudra Bank and Cashless transactions through RuPay card will help push the e-commerce sector towards that growth trajectory. Further increasing the purview of the TVoA scheme to 150 countries under different stages, point towards more tourists’ inflow in India in the times to come.”

RAHUL BAJAJ, CHAIRMAN, BAJAJ GROUP
“Although no budget can be perfect, this is a very positive one. The reduction in corporate tax from 30% to 25% over a four years period is very appreaciable. Prima facie I can say, in this budget whatever is done is very good.”

JAGDISH KHATTAR, EX-MD MARUTI SUZUKI
“This year the entire perception towards general budget has changed. Earlier, everyone used think mostly about what they will get directly out of budget. But now we think like if the budget is for betterment of the entire economy, it will be automatically become beneficial for my sector too.”

PROF. 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.”

DEBOPAM CHAUDHURI, VP RESEARCH & CHIEF ECONOMIST, ZYFIN RESEARCH
“A fair budget in our view. Indian governments have always been criticized of cutting down expenditure during the recovery phase, thereby prolonging the path to growth. Mr Jaitley however, did not try to stifle public spending and acknowledged a breach in fiscal deficit targets. However he has ensured through various policies to limit leakages and spend on sectors with high multiplier effects on the economy. We need to first build an exchequer before seeking personal benefits in order to prevent future austerities.”

SHUBHADA RAO, CHIEF ECONOMIST, YES BANK, MUMBAI
“We are positive on the market borrowing program, the net borrowing is in alignment with market expectations. The government is looking to raise revenue through additional resources, which could be gold bonds.
“I think, overall, there are significant amount of growth multipliers embedded in the budget announcements through a sharper focus on expenditure.
“(On fiscal deficit) I think this is more tenable particularly when the government is wanting to reinvigorate public investments. I think this is more in alignment with government re-igniting investment led by its own programs. We believe to the extent that the government implements its investment program, it will be a positive.
“I think institutional strengths are getting more clarity here, with the announcement of the debt management office, the monetary policy framework, and GST.”

ABHEEK BARUA, CHIEF ECONOMIST, HDFC BANK, NEW DELHI
“I think this (higher fiscal deficit) was on the cards because the government had been making a case for public investment.
“I think this is a very sensible policy, given the fact that a lot of things are crimping the fiscal space available to the centre. And I hope and wish the rating agencies and the investor community in general, understand the rationale behind this.
“I think trying to stick to a 3.6 percent (fiscal deficit) target would be far riskier, in terms of ultimately ending up with low growth and having to slash expenditure further and getting into this vicious downward cycle that we have been in for the last couple of years, partly because of this fetishisation of a particular number of the fiscal deficit.

RADHIKA RAO, ECONOMIST, DBS, SINGAPORE:
“Today’s budget was pragmatic, wide-ranging and inclusive given the emphasis on social safety nets. On the fiscal math, the deficit target has been set at -3.9 percent of GDP, deviating modestly from the roadmap’s target of -3.6 percent.
“But the government reiterated its commitment to medium-term consolidation by maintaining the -3 percent target, but delayed the timeline.
“We had flagged risks of a higher deficit target to accommodate realistic economic assumptions, higher public expenditure and increased devolution to states. The higher target is unlikely to attract the immediate ire of rating agencies and the markets, but will need the higher-frequency fiscal performance to back that faith.
“Rightfully, public investments have been given precedence to kick start the capex cycle, picking (up) the slack from the stressed private/corporate and banking sectors.
“Overall, the budget was positive, but we are uncertain if there will be any imminent rate reaction from the central bank.”

A PRASANNA, ECONOMIST, ICICI SECURITIES PRIMARY DEALERSHIP LTD, MUMBAI
“This budget will be a good test case whether fiscal stimulus works or not.
“If growth picks up more than what is being anticipated by the government, then we can conclude that investment-led growth helps growth. But it is disappointing that fiscal deficit targets have been reworked, and it remains to be seen how successful the government will be in implementing that.”

UPSTAND BHARDWAJ, ECONOMIST, ING VYSYA BANK, MUMBAI
“The Budget seems to be more credible, with a higher fiscal deficit target and higher allocation for infrastructure.
“Clarity in taxation structure will provide more stability ahead. The expenditure switching towards more productive areas is a big boost for growth.”

NILAYA VAR, HEAD OF GOVERNMENT SERVICES, KPMG INDIA
“Although possibly controversial and against economist expectations, the pushing out of meeting the fiscal deficit target by a year shows pragmatism in bringing in additional public investments for infrastructure development, compensating (for) lack of private investment and showing seriousness on improving overall infrastructure.”

ANANTH NARAYAN, REGIONAL HEAD OF GLOBAL MARKETS – SOUTH ASIA, STANDARD CHARTERED, MUMBAI
“Markets were expecting a fiscal deficit target of 3.6 percent to be met in 2015/16, so the 3.9 percent number will be negative for the markets as an initial reaction on Monday.
“Also markets were not expecting the government to extend the fiscal consolidation roadmap by one year, and we were expecting fiscal deficit target of 3 percent of GDP to be met in 2016/17. But we have to see how this additional money coming out of the higher fiscal deficit will be spent.”

NITIN JAIN, CEO OF RETAIL CAPITAL MARKETS AND GLOBAL ASSET MANAGEMENT, EDELWEISS, MUMBAI
“I would rate the budget a 7 and a half on a scale of 10! Though it is a fairly well balance budget, the market expectations were really sky rocketing before this day. So I would not be surprised to see a market correction of maybe 5-6 percent.
“It is not close to the ‘Visionary document’ that people have been talking about. Overall, I would still say it is well balanced one.
“The levy on corporate taxation, rationalization of wealth tax, incentives by more expenditure towards infrastructure are all positives. But nowhere close to what markets were expecting.
“For NBFCs (non-banking financial companies) the SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act) law is a huge positive.
“For some infrastructure companies, especially in roads, the EPC (engineering, procurement and construction) companies should do very well.
“But that is where I would stop. There were much more expectations on infrastructure spending. And more than all of this, the expectation on announcements for banks, as banks are in massive need for recapitalization. The budget fell short on those expectations, but maybe those may follow soon.”

SACHIN MENON, COO – TAX & HEAD OF INDIRECT TAX, KPMG INDIA, MUMBAI
“The announcement that the much awaited GST will be introduced on 1st April 2016, will definitely rejuvenate the industry.
“The GST will make manufacturing more competitive and thereby support the ‘Make in India’ Campaign. How fast the Finance Minister will move the wheels of change to usher in GST will be keenly watched in the coming days”

ABHEEK BARUA, CHIEF ECONOMIST, HDFC BANK, NEW DELHI
“I think there’s been endless controversy for corporates over the absence of a consolidated FII (foreign institutional investor) limit.
“I think it’s just making the process of investing in India and Indian companies that much easier. It is still very much a part of the larger scheme of making India an attractive destination and introducing transparency.
“The gold monetisation scheme has helped other countries like Turkey. I think it will work. It certainly will help foster one step to a more active gold market in India.

ENMESH SRIVASTAVA, CHIEF INVESTMENT OFFICER IDBI FEDERAL LIFE INSURANCE, MUMBAI
“GAAR postponement is a big positive and will bring fresh inflows.
“More importantly, they have clarified that when GAAR comes into force, it will not be applicable retroactively, and that clears a big uncertainty for investors.”

U.R. BHAT, MANAGING DIRECTOR, DALTON CAPITAL, MUMBAI
“GAAR deferral is a positive relief. Government wants to be sure that foreign investors don’t run away from India. There should be no confusion prevailing on this now.
“It should provide some stability on perception of India’s tax policies. I think there would be a comprehensive review of everything before government actually plans to move to GAAR.”

NIRAKAR PRADHAN, CHIEF INVESTMENT OFFICER, FUTURE GENERALI INDIA LIFE INSURANCE, MUMBAI
“Having no distinction between foreign direct investments and foreign portfolio investments would provide more confidence to portfolio investors.
“Both investments would be treated same in the eyes of government and regulators. This should attract more portfolio flows in near to medium term in debt as well as equities.”

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