Industry reaction to Union Budget 2019 : Mostly positive but some regrets as well

Here are some more reactions from the industry leaders --

Shailesh Chandra, President – Electric Mobility Business and Corporate Strategy, Tata Motors Ltd:

“The incentives announced today by the Finance Minister, in terms of, additional interventions and steps to support the EV adoption, reinforces a strong commitment by the government to steer electrification on a faster trajectory. The proposal to lower the GST rate for EVs to 5% and reduction in duties of EV components, which we are studying, is a welcome step. It will help in further narrowing down the cost of ownership gap against ICE vehicles.
Additionally, private buyers, who were earlier not considered for a subsidy through FAME 2, will now have a reason to seriously consider an EV with the tax exemption of up to Rs. 1.5 lacs."

Akshay Singhal, Founder, Log 9 materials:

"Income tax deduction on loans for EV purchase is an extremely welcome move by the new Finance Ministry. EVs are pricier than usual vehicles as initial cost, hence this will boost adoption.

Relief from angel tax is also a big thumbs up and relief for startups.

However, better structuring is required for deployment of Fund of Funds to ensure benefit to high technology intensive startups which fall in the category of high risk, high reward. This is important for development indigenous core technologies like battery manufacturing, fuel cell manufacturing, etc."

Mayur Shah, Managing Director Marathon group & Former Chairman MCHI CREDAI:

“The special emphasis that has been given for the affordable housing segment is good news for customers and it is aligned with the government’s National Mission of “Housing for All by 2022”.

Additional Rs.1.5 lakh interest deduction for purchase of residential house having value upto Rs. 45 lakh, in addition to the existing interest deduction Rs. 2 lakh is a welcome step. Redefining the affordable segment and increasing the limit of carpet area in 60 square meters in Metropolitan regions and 90 square meters in non-metropolitan regions is good step for the sector.”

Somasundaram PR, Managing Director, India, World Gold Council:

“Today’s announced import duty hike on gold from 10% to 12.5% will negatively impact India’s gold industry. It will impede efforts to make gold as an asset class particularly when gold prices are already rising globally. In addition, the grey market will thrive which will dilute efforts to reduce cash transactions.

Millions of Indians invest in gold as part of their household savings, not simply as discretionary spending for consumption. People buy gold as a long-term investment to protect their wealth and gold also has huge significance socially, emotionally and economically in India.

An increase in duty will be counterproductive to the objectives stated in the previous year’s budget and encapsulated in NITI Aayog’s recommendations for transforming the gold market. We believe that gold can play a positive role in the Indian economy, but to enable this; there needs to be a reduction in overall taxes, a stable policy environment and a transparent trading market.“

Vineet Chaturvedi, Co-Founder, Edureka:

"This union budget has given due importance to skilling and education which is a welcome move in today's skill-driven industry.

The expansion of Skill India to include AI, IoT and other futuristic technologies hits the nail on the head and the establishment of National Research Foundation is a major boost towards building India's technical competence.

Additional allocation of budget to Bharatnet will also have a deep impact on skilling rural India as it has the potential to open up online learning to students and professionals from remote villages. All in all, I am happy that Education has received 10% higher allocation in this budget which will help schools and higher education institutions in the country invest in catching up with industry requirements."

Vamsi Krishna, CEO & Co-Founder, Vedantu

“Digitization has given a major boost to the robust education system in India - the second largest market for e-learning after the US. Therefore, a National Education Policy to bring India’s higher education system on par with global standards will be a big leap towards bolstering the e-learning market.

The government’s plan to re-energize the education sector is a positive step to boost the morale of young learners. On the back of this emerging technologies such as AI & ML will help in spreading education through EdTech platform across the country. Further, the proposition to launch ‘Study in India’ that will position India as a prime destination for higher education amongst students aboard, will open doors and present opportunities for educators and e-learning sector as a whole.”

Rajeev Kapur, MD, Steelbird Helmets & President, Two Wheeler Helmet Manufacturers Association:

Kapur  welcomed the move of the Government to reduce corporate tax by 5% for companies having turn over upto 400cr and said it was a long pending reform.

He said, "I am sure this will create extra space for mid size companies to invest more into research, development & capacity creation. Besides, the focus area of E-vehicles will also help auto sector to transform rapidly and create a level playing field for new innovation in mobility.

In the budget, Government has shown it’s intent on  two another key areas that is strengthening rural roads & national highways which is a step worth applauding as it will lead to the better conditions and better network of roads significanty reduce the fatal accidents,  reduce the health care burden and improve the overall connectivity."

Mustafa Nadeem, CEO, Epic Research:

"The budget in the overall scenario seems very balanced at this point in time.

If we try it to compare with the interim budget there are only a few takeaways like firstly the increase in holding of up to 35% in listing companies. This is going to improve depth as well as make various listed companies available to retail participants. It will also attract foreign investment.

Secondly, the additional 1.5 lakh exemption for homeowners on interest paid is a welcome move. This may have long term benefits for space as well as buyers and owners. We believe another good move that is seen in the budget is to focus on spending in infra and construction space.

Opening up various routes for foreign investment and further easing the routes will bring in more long term investment in this space. The massive investment of 100 lakh crore for the next five years will boost the space and bring in more demand which has seen a slump in the last few months.

With that, the rural boost of 1.95 cr houses is certainly going to improve demand for space like steel and aluminum, cement and its allied space.

The reduction in tax for companies up to 400 cr is a welcome move but it could have been increased.

We believe the only problem is with a 3.3% fiscal deficit number. In the current scenario with GDP projection at 7% it may see some variation. The PSU space is certainly a gainer with an increase in the limit to sectoral limit and a further 70k boost for PSU bank space will make select PSU banks a lucrative play." 

Kalyan Krishnamurthy, CEO, Flipkart Group:

"It is good to see the government renew its commitment to boost ‘digital India’ in the budget presented by FM Smt Nirmala Sitharaman. The Government’s vision on bridging the rural-urban divide with internet penetration will be pivotal in transforming India into a $5 trillion economy.

It is good to see the impetus given to Start ups, MSMEs and FPOs -- which form the backbone of our economy and also to Electric Vehicles. Further, by setting up a National Research Foundation, addressing challenges faced by start-ups, and committing to transforming the education system, the budget is set to boost innovation in the country. Innovation will form the bedrock of the digital economy in India.

The proposal to invest Rs. 100 lakh crore in infrastructure bodes well for job creation and boosting demand, manufacturing and consumer income. As the Prime Minister Modi led government continues to push for Ease of Doing Business for MSMEs and industries, we at Flipkart Marketplace will be happy to continue connecting millions of MSME sellers, manufacturers and artisans with consumers efficiently & in cost effective manner.”