Ashok Varma, Leader – Social sector, PwC India.
“Pradhan Mantri Shramyogi Man Dhan Yojana seems to be an extension of the existing Atal Pension Yojana(APY). While APY was meant for workers in the unorganized sector, the new scheme includes marginal wage earners from the organized sector as well. Another difference is the upper age limit of 60 years in the new scheme as against 40 years in APY. It is a welcome move and would further provide social security to a larger number of marginal wage earners in the country. Being contributory and designed in line with NPS(National pension scheme), this also makes economic sense.”
“The outlay on rural employment generation scheme at Rs 60,000 cr is marginally lower than the revised estimate for the current year. This allocation may need an upward revision during the year as has happened in the current year. The rising minimum wages in states would also add pressure for upward revision.”
Mr. Kamal Nandi, President – CEAMA and Business Head & Executive Vice President – Godrej Appliances on Interim Budget 2019.
The interim budget for 2019-20 has focused on farmers and the middle class and should boost consumption.
Full tax rebate for income up to 6.5 lacs (including investment under 80 C) will boost sentiments and we foresee a rise in demand for the mass segment of consumer durable goods.
Rural electrification which aims to touch every household by March 2019 coupled with infrastructural push via Gram Sadak Yojana and the rural support schemes will serve as a catalyst in improving the demand for consumer electronics and appliances. Category penetration levels should, therefore, improve faster.
Also, governments continued attention towards skilling will help improve the quality and quantity of skilled labor – critical to industrial growth.
We also welcome governments attention towards climate change and clean energy. We are committed towards the success of the energy efficiency regime and will continue to support the government in this area.
The FM also talked about the vision of making India a 5 trillion dollar economy in the next 5 years and a 10 trillion dollar economy in next 8 years thereafter. We welcome this ambition and would like to affirm that electronics, appliances and AI industry will serve as major growth drivers in the achievement of this objective.
The interim budget though did not provide much further impetus to the indirect tax reforms which are crucial for manufacturing and Make in India. We hope to hear some major announcements in the full budget which may provide the desired support to the ACE Industry and electronic manufacturing.
Mr. Ashishkumar Chauhan, MD & CEO, BSE on Budget 2019:
“I congratulate the Finance Minister for delivering a growth-oriented budget benefitting various sections of the society and stating out the vision to make India a US$ 10 trillion economy, a daring and laudable move. Adherence to fiscal prudence despite providing benefits to the middle-class, farmers, and the unorganized sector will boost consumption, improve social security and ultimately revitalize the Indian economy, which bodes well for the capital markets as well.”
Mr. Anand Shah – Deputy CEO and Head Investments, BNP Paribas Asset Management India
“Budget is extremely positive for the consumption sector. More money is given in the hands of marginal farmers and the middle class. While doing the same, fiscal discipline is not significantly compromised”
Mr. Bhargav Dasgupta, MD & CEO – ICICI Lombard General Insurance:
“The Finance Minister has announced a progressive budget that aims at uplifting India’s populace, both in the cities as well as the villages. Schemes aimed to boost farmer income, reduce tax outgo for the middle-class taxpayers should encourage consumption among India’s aspiring and diverse population. Further, steps such as developing 1 lakh digital villages is a significant move forward for the Digital India movement. For the insurance industry, these measures aimed at additional savings and boosting digital infrastructure. Thus acting as catalysts for distribution expansion and increasing penetration of segments such as the motor, health insurance, crop insurance etc.”
Mr. Shailendra Kumar, Director & CIO, Narnolia Financial Advisors Ltd.
“Budget announced today was an exercise by the government to improve the fortunes in the forthcoming general election. In the short term, the stimulus of ninety-three thousand crores to salaried employees and farmers means a boost to consumption but much-needed infra and CapEx spending continue on the backseat. Budget estimate on the revenue front appears unconvincing. Though one should not take a full financial year view on the basis of this budget as policies of the new government post general election in May would finally decide how government finances look when we end the coming financial year FY19-20.
Raising the income tax exemption limit to rupees five lakhs will help three crore taxpayers and would cost about rupees eighteen thousand crores to the exchequer. This surely is a strong positive measure for lower income group and urban youth population in their early career. Also, PM Kisaan Samman Nidhi package where rupees six thousand would be given to small and marginal farmers owning less than two hectares in three installments every year will impact about twelve crore farmers across the country. Post-Telangana state election where incumbent government re-election has been attributed to the success of a similar scheme, it was widely expected that something similar would be announced by the Centre as well. This would cost about rupees seventy-five thousand crores including rupees twenty thousand crores in the current financial year. This is about 0.35% of the GDP and in that sense much lower than feared farmer loan waiver that would have coasted 2.5% of the GDP and would also have worsened credit environment. These two populist added together will have an incremental impact of close to 0.5% of the GDP on fiscal deficit and is in line with our base assumption.
The problem here is that on revenue front numbers are not credible. GST collection has remained well below the budget target for FY19. Not only GST but to some degree even other sources of government revenue like a direct tax as well as others like disinvestment and telecom auction have remained below the budget estimate. These make fiscal deficit target of 3.4% appear unconvincing.
Post the budget, 10-year bond yield spiked to 7.6% as the immediate implication of the budget on the economic front is- higher market borrowings by the government. Post state election results in December, there were uncertainties on how populist the government would become and how damaging that would be for the economy is settled now and surely it is not as bad as it was feared.”
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2014 The Global Indian New Network (TGINN)