Union Budget 2018 is of tremendous importance not only for India, but also for the rest of the world. This at the back of the fact that Indian economy is the fastest growing economy of the world. Years ahead are a test for the world’s largest democratic set up – can we lead the world, preserve our social and cultural way of life and still successfully grow to bring a major chunk of world’s population out of poverty? Union Budget 2018’s vision and policy ground work will go a long way to determine the way India Inc. does business in the future.
Following are the post Union Budget 2018 Quotes from India Inc. leaders,
“There is 21,000 tons of gold with the general public. Through this process
the idle asset at home will become productive, energizing the economy.”
– George Alexander Muthoot, Muthoot Finance
Archit Gupta, Founder & CEO ClearTax
Standard deduction has been reintroduced but at a cost, it takes away medical reimbursement and travel allowance. There were several demands to raise medical reimbursement from 15,000 and bring it up according to current prices (the amount has been same since more than a decade). However, now the clamour for raising this limit will die down. With this, for a salaried, the amount taxable under salary shall be reduced by Rs 5,800. While cess will go up by 1%. Senior citizens have much to rejoice and will face much lower burden of taxes, this is especially crucial in the falling interest rates from banks and deposits.
George Alexander Muthoot, MD, Muthoot Finance
The budget has adopted simple strategies to keep the enthusiasm high. It focuses on doing business with much ease and in transparent manner, continued efforts to lower fiscal deficit to achieve lower interest rate scenario and continued thrust on MSME sector by providing easy access to credit.
The government has put in unwavering efforts to reach out to the under-served and provide them with financial services. The financial inclusion is on the right path with an environment of easy financing options.
The government has focused on key social spending like education and healthcare thereby improving the quality of life of lower income group. So in all the budget aims at inclusive growth with its reforms, generate employment and support the bottom of the pyramid entrepreneurs. The plan to revamp the Gold monetization scheme is a welcome move. There is 21,000 tons of gold with the general public. Through this process the idle asset at home will become productive, energizing the economy. This will bring in the household gold into the market. Thus reducing the need for import, and saving on valuable foreign exchange.
Mitesh Shah, Head of Finance, BookMyShow
“The Union Budget 2018 is both populist as well as pragmatic. It focuses on growing the promising rural economy and extending digitalization to rural citizens which can yield great results in the form of increased household rural consumption, and thereby providing internet driven businesses with a great potential market opportunity to tap. Increasing allocation for digital India and the overall strong thrust on digitalization is a welcome step. Initiatives such as High speed connectivity and Wi-Fi access to 5 Cr rural citizens and tax disallowance on cash expenditures above Rs. 10,000 for all entities now also give digital movement a great push and will benefit internet businesses. However, some more direct incentives for promoting digital ecosystem in form of lower MDR or cashbacks would have been welcomed by online platforms as well as merchants.
The move to levy 10% LTCG is commendable in the larger interest of the Economy and Fiscal situation. Another significant change proposed in the budget is inclusion of ’Significant Economic Presence’ in the definition of ‘Business Connection’ whereby even digital presence of Non-resident enterprises in India through digital platforms shall be construed to be taxable presence irrespective of whether or not the non-resident has a place of business in India or render services in India. This provision will bring about paragon shifts in nexus rules under DTAA.
There is also positive news for startup ecosystem as the benefit of dedication u/s 80-IAC is extended to startups incorporated even after 1st Apr, 2019 but before 1st Apr, 2021. The budget also brings lot of clarity around tax administration and rationalization as well as relief from MAT for companies admitted under Insolvency Resolution Process. With 99% of corporates now being covered under the reduced corporate tax rate of 25%, the Finance Minister has substantially lived to the commitment of rationalizing corporate tax made in 2015.”
Dr. P. Sathyanarayanan, President of SRM University
“We are very happy to see the continued focus on research and development in the education sector. The fact that Rs. 1 lakh crore has been earmarked for revitalising innovation under RISE over the next 4 years augurs well for the future. We at SRM are committed to creating an innovation and R&D focused institution and we believe that we are completely in sync with the aspirations of the Government in reaping rich demographic dividend and this is possible through high quality education. The focus on creating a corpus of the best brains of the country and getting top 1,000 B.Tech students from the top institutions to work for research is a healthy way forward and we are grateful to the FM for his programmes in the segment”
Adhil Shetty CEO and Co-founder BankBazaar
On Insurance: “Rs5Lac is a great mediclaim amount and 50 Cr individuals is a great target. This will create tremendous awareness for medical insurance in the same way as Jan Dhan which ensured every Indian to have a bank account. This will push for every Indian to have medical insurance. On life insurance the PM Jeevan Jyoti Bima Yogana including Rs 2Lac Life cover is being pushed across a larger base which is a great sign. Rs 2 Lac critical cover is also being extended to a larger base.”
On Taxes: “Reduction of corporate income tax for companies with revenue up to INR 250Cr is a big announcement and will benefit more than 99% of the companies in India. The framework is still to be analyzed to qualify the benefits. Another announcement on standard deduction of INR. 40,000 for salaried class is a great step to simplify the taxation process. Though the effect would not be much as the 40k deduction in lieu of medical and travel allowance effectively only means INR 40k- (15k+9.6k existing ) which is only INR 15.4K extra non-taxable income. At 20% tax slab, it is approximately INR 3080 in hand for full year. This will further get reduced because of the increase in health and education cess of 1% on tax (existing 3%) which means only approx. INR 2000 in hand per year increase”
On Fintech : “The budget overall is positive. There is visible support for Fintech industry as the FM specifically mentioned that Fintech is playing an important role in countries growth and hence announced setting up a working group for its growth. The biggest announcement was about insurance and Rs5Lac is a great mediclaim amount and 50 Cr individuals is a great target. This will create tremendous awareness for medical insurance. Also, reduced corporate income tax for companies with revenue up to Rs250Cr is a big one. There are couple of points which will raise questions. The 3.5% fiscal deficit in FY18 and 3.3% fiscal deficit target in FY19 is slightly higher than expected which will impact the borrowing cost for Private sector. Second, introduction of tax on LTCG exceeding Rs. 1Lac after 14 years.”
On Investment: “The announcement of the LTCG on equity investments and 10% DDT saw the Sensex plunge 1% within minutes. However, the markets seem to have recovered immediately signalling that equity investors — including mutual fund investors — would absorb these blows and keep investing as per their financial objectives. After all, equity remains one of the best-performing asset classes.
“Budget has unfortunately ignored the stressed and vilified real estate sector” –
Sarjan Shah, Group Satellite
Rakesh Jariwala, Tax Partner, Media and Entertainment, EY India
“India has taken one more step towards taxation of digital economy transaction by expanding the scope of domestic tax nexus rules by introducing the concept of ‘significant economic nexus’. It is proposed to now tax a digital economy transaction exceeding a monetary threshold (to be prescribed) or systematic and continuous soliciting of business or interaction with such number of users as may be prescribed, in India through digital means. MNCs, with tax treaty protection, will not be effected by the proposed changes as the expanded definition is unfounded yet in the tax treaties.
This is a clear indication by the Government that they will continue with their stance of taxing companies in India on source rules principles and extend them to digital companies who intend to benefit from India’s vast digital economy, offering a level playing field to the Indian players, but equally, they will be mindful of their international tax treaty obligations.”
Rajan Navani, Vice Chairman and Managing Director of Jetsynthesys (Jetline Group)
“Budget 2018 demonstrated the commitment of the government on Digital India by doubling allocation, developing an increased focus on new technologies including artificial Intelligence and blockchain. The contribution of new age businesses and technologies over the next decade to GDP will be significant as will be the ability of Indian companies to be part of global supply chains through value added technologies. All of this will result in more entrepreneurs and additional jobs that will drive the future of a New India.
The incentive provided to 5G, increased Wi-Fi hotspots and smart cities will drive greater data consumption which will particularly benefit the online and mobile gaming companies in India.
ModiCare, different from ObamaCare, is something that should have been done in India long ago. The one item a common man doesn’t budget for is unexpected healthcare costs for family members and many a times it completely messes up his finances. Providing a cover of ₹5 lacs to 10Cr families is indeed the highlight of this budget 2018 and will be a game changer for India if implemented smartly and efficiently.
Further, in our land of frugal innovation in healthcare, the same can happen at a fraction of the cost in western countries.”
“The Smart Cities programme is progressing well and with continued budgetary support,
these cities will greatly benefit from a new ecosystem of infrastructure”
– Dr. Sanjay Gupta, World University of Design (WUD)
Sarjan Shah, MD, Group Satellite
“Disappointing budget from the perspective of private sector involvement in creating mass housing stock that will make homeownership a reality for all Indians. Budget has unfortunately ignored the stressed and vilified real estate sector that is in desperate need of Government support through specific targeted tax breaks that help make building affordable homes in India viable.” –
Abhishek Bansal, Executive Director of Pacific India Group
“The budget this year is a boost to ‘Make in India’ initiatives and aimed at a progressive development of the rural economy and growth of the entire country. The focus on infrastructure, social inclusion and progress, education, agriculture and healthcare are steps in the right direction. Though there is not much in terms of addressing the problems faced by the realty sector but the move towards no adjustment in case of the circle rate not exceeding 5 % of sale consideration is a welcome move. Standard deduction for transport, medical reimbursement for salaried taxpayers and incentives for Senior citizens will help increase disposable income at hand.”
“Initiative to increase loans to women self-help groups by 37% is welcome.
However, there is a lot more that remains to be done”
– Ruby Sinha, sheatwork.com
Prashant Solomon, Managing Director, Chintels India and Hon. Treasurer, CREDAI NCR and Convenor of CREDAI National (Media and PR Committee)
“The budget has several incentives for the rural sector, women etc but I would have liked the benefits of tax reduction to be wide spread with more income tax rebates for middle and salaried classes in order to increase disposable income and boost spending power that will help the economy and our sector grow in the long run. Though there are no major incentives for the growth of real estate industry the re-introduction of LTCG will help in growth of other investment avenues. Concessions in the budget towards the affordable housing sector and the setting up of an Affordable Housing Fund under the Pradhan Mantri Aawas Yojna, will help the realty sector ancillaries grow. Though most of the recommendations that we had made on behalf of the real estate industry have not been addressed, the move towards no adjustment to be made in a case where the circle rate value does not exceed 5% of the consideration is a welcome move”.
Sudhir Pai, CEO, Magicbricks.com
Much on expected lines, the government in Budget 2018 has continued with its thrust for Affordable Housing and ‘Housing for All’ scheme. The government has been consistent with its efforts in addressing affordable housing in 2017. Now, Budget 2018 has further given impetus to affordable housing by creating a dedicated fund under the National Housing Bank (NHB). This fund will be provided for from priority sector lending and fully serviced bonds authorised by the Government of India. Now that the government has created significant enablers to increase demand and to create favourable conditions, we should hopefully see a significant spike in new launches/supply in the coming days in the affordable housing segment.
It is also encouraging to see the government address the issues of housing in urban areas. While providing assistance to construct 37 lakh houses in urban areas will take care of the urban housing woes, financial assistance (Rs.2.04 lakh crore) to 99 Smart Cities will ease the pressure on the existing urban centres. Further, the finance minister also proposed that no adjustment shall be made in respect of transactions in immovable property, where the circle rate value does not exceed 5% of the consideration – this would affect only those localities where circle rates are higher than prevailing market rates.
While the budget is now done and dusted, there are some matters which would help drive the industry ahead more vigorously. We hope that going ahead the government will (a) address the issue of GST on new homes which is currently inflationary (b) examine the issue of lowering the cost of transactions, particularly stamp duty and registration fees (c) create enablers for the sector such as digitisation of property registries; guaranteeing or insuring land/property titles; enhancing liquidity in real estate markets through REITs and other means and (d) strengthen RERA to resolve disputes speedily and help drive confidence amongst consumers.
Dr. Sanjay Gupta, Director General, World University of Design (WUD)
“The overall measures have a strong impetus towards social inclusion and economic growth. The budgetary allocation of 1 lakh crore towards higher education and research is a welcome move. In terms of development of cities, the budget gives an added fillip to the smart cities mission and urbanisation along with the proposal to develop 10 prominent tourist destinations as iconic tourism destinations.
This is where the proposal to open 18 new schools of planning and architecture in order to to generate skilled designers and architects will create the necessary impetus and awareness towards the importance of design in every aspect of education be it urban planning, architecture, management or engineering. The need for sustainable environment friendly urbanisation and preservation of the fabric of an old city syncing it with modern growth can be addressed aggressively with the right education and awareness. The Smart Cities programme is progressing well and with continued budgetary support, these cities will greatly benefit from a new ecosystem of infrastructure leveraged with modern digital solutions and new age technologies like Artificial Intelligence, digital manufacturing, big data intelligence, quantum communications and art of the things”.
Ranjeet S Mudholkar, Vice Chairman and CEO, Financial Planning Standards Board India (FPSB)
This Budget balances populism with pragmatism and, on a holistic basis, is good from Financial Planning perspective for long-term investing. There are slight benefits for salaried class taxpayers by way of Standard Deduction in lieu of Transport and Medical reimbursements. There are also incentives for senior citizens in exemption of interest income and exemption under Section 80D towards health insurance. The reintroduction of 10% long term capital gains on stocks exceeding Rs. 1 lakh gains might initially dampen spirits, however the provision of grandfathering of gains as of 31st January, 2018 for equity purchases up to six months prior will soothe this impact. The period of grandfathering may be extended until 31st March, 2018 to enable effective cash management and tax planning.
“Micro, small and medium enterprises (MSMEs) are the backbone of the economy and major contributors to the GDP.
The Finance minister has rightly touched upon on the MSME sector”
– Umesh Revankar, Shriram Transport Finance
Ruby Sinha, Founder, sheatwork.com- a one stop knowledge hub for women entrepreneurs
Union Budget 2018 perfectly blends reforms and populism with a keen eye on fiscal discipline. FM Arun Jaitley makes a strong push for digitisation, infrastructure development and better quality of education. The move to integrate technology into education is a step in the right direction. The government’s initiative to provide 5 lakh WiFi hotspots in rural areas will allow more grassroot level internet-run businesses to come up. Measures announced for Small and Medium Enterprises will help budding enterprises and help them contribute to the growth in consumer-oriented sectors. Also, the initiative to increase loans to women self-help groups by 37% is welcome. However, there is a lot more that remains to be done to improve the state of women entrepreneurship in the country – like extended tax holidays so women are motivated to look beyond mere jobs and become entrepreneurs, leading to growth of the economy.
Sanjay Bhutani – CMO, Rivali Park, CCI Projects.
“Union budget 2018-2019 is offering a major boost to the ever emerging real estate industry. Government’s initiative of allocating dedicated funds for the affordable housing scheme under NHB and One Crore houses under Pradhan Mantri Awas Yojana (PMAY) will prove to be a win-win situation for the supplier and the buyer alike. The real estate industry also welcomed the announcement of The Smart Cities Mission with government’s initiative to spend about INR 2,04 lakh crores to execute smart projects will be an added advantage for the Indian Property segment. The capital gains on immovable properties has brought about a positive atmosphere in the Indian Property segment”
“Setting up a dedicated housing fund under the
National Housing Bank for priority sector lending will escalate the demand” –
Amit Shah, Managing Director, Classic Marble Company
Umesh Revankar, MD & CEO, Shriram Transport Finance
“Prime Minister Modi’s fourth budget is growth oriented and continues to strengthen the mission of rural and infrastructure development. The budget gives impetus on boosting farmer incomes and employment in rural areas.
Micro, small and medium enterprises (MSMEs) are the backbone of the economy and major contributors to the GDP. The Finance minister has rightly touched upon on the MSME sector and provided various measures to stimulate the sector. The government’s MUDRA Yojana has successfully benefitted not only the lower income groups but also encouraged women entrepreneurship. With continued thrust on the MUDRA scheme, the government is sure to achieve its objective to create much-needed employment.”
Amit Shah, Managing Director, Classic Marble Company
“The Union Budget is mainly focused on agriculture, education, healthcare sectors and upliftment of the poor section of the society. This will indeed be a huge challenge to the present Government since these sectors are poorly managed or have been neglected for many years in the past.
As far as real estate sector is concerned, although there were no direct incentives or concessions announced in the budget, the goal of housing for all by 2022 whereby the Government has targeted building one crore houses under PMAY (Pradhan Mantri Awas Yojana) is expected to develop the Tier 2 and Tier 3 cities across India. The move will give a major boost to the industry. Also setting up a dedicated housing fund under the National Housing Bank for priority sector lending will escalate the demand since home buyers will be provided with the ease of credit for aspirational or affordable homes. Major allocation of budget on Infrastructure projects will increase the connectivity across country and will help in growth of the industry.
There is disappointment on income tax part, as there were expectation on changes in Income tax slabs or extra benefit to new home buyers for the large section of salaried persons in metro cities which could have given much needed pace to the stagnating real estate sector. Specifically regarding the marble & granite industry, the impact of budget has been marginal with increase in customs duty on account of Social Welfare Cess. However with proposed investments in infra and housing sectors this marginal increase can be absorbed by the expected growth path set by the government in the budget.”
India Inc. talks Budget 2018