As Union Finance Minister Arun Jaitley announced the Union Budget 2016-17, several reactions came in from the industry experts, captains of the industry as well as industry bodies:
Harshavardhan Neotia, President, FICCI
Overall, the budget proposals are in line with the development priorities of the nation. The Finance Minister has made a strong attempt to pump prime the rural economy and the infrastructure sector. This would yield dividends and we foresee a multiplier effect in the form of demand generation and employment creation over time. The state of the agriculture sector on account of two consecutive years of monsoon failure was precarious and it deserved the attention that was needed.
Additionally, we see a lot of emphasis on affordable housing segment which will also result in forward and backward linkages and thus propel growth. Sticking to the fiscal framework is another major plus and should offer comfort to the international community. Attempts towards tax simplification and improving the tax litigation framework are also noteworthy.
Sunil Kanoria, President, ASSOCHAM
The government has rightly realised that a sustainable and equitable growth model cannot be built as long as the rural economy is in distress.
With successive monsoon failure, the farm sector was in distress and the Finance Minister with a clear vision of the Prime Minister. Narendra Modi has tilted the balance in favour of the agriculture sector, which would certainly yield dividends for the entire economy and provide a solid foundation for a robust economy.
A huge commitment of Rs 2.18 lakh crore on the rail and road infrastructure will not only kick start the economic growth but would also result in having a multiplier effect on India’s economy.
Rajiv Nath, Forum Coordinator, AIMED
Finance Minister Shir Arun Jaitley must be applauded for bringing budget’s focus on rural community as well as senior citizens. Budget’s proposal to set up 3,000 medicine shops in rural areas and insurance scheme for senior citizens is noteworthy and noble intent of low cost access to dialysis centres .
But then, given India’s humungous population with majority of people with modest income, the biggest challenge that our country focuses is to ensure low cost quality healthcare access to majority of Indians. Government needs to realise that medicines are just one component of healthcare cost and at times not the major component of healthcare cost also. Medical devices are, equally, if not more as critical a part of overall healthcare cost as medicines and diagnostics. If the government had focused on giving a major boost to medical device manufacturing in the country and also ensured a robust MRP regime, then it would have served two purpose with one shot – i.e. (a) Lower the overall healthcare cost and better price stability and (b) Lead to sharp reduction on import dependency.
M P Vijay Kumar, CFO, Sify Technologies Limited
In order to make the Government’s social and infra spend effective, a good monitoring and audit system through independent accounting firms across the country is critical. Even if one per cent of spend towards audit is actioned, the productivity of spend will increase by three times and we will see intent matching action. Intent has to grow beyond mere announcement in the newspapers. Equity of economic growth through social spend will also curtail inflation in the long run and help economic growth.
Taxing Dividend in hands of individual is retrograde. As profit is already after tax and there is dividend tax of 20 per cent, another tax in the hands of the individual is unwarranted. It will also impact HNIs investing in start-ups/encouraging enterprise. Capital market has lot more role to play for economic growth and this could have been avoided.
Kenny Ye, MD, UCWeb India
Finance Minister Arun Jaitley has presented a well-rounded and constructive budget, focusing on most critical aspects of the economy.
Thrust on farm sector, increased spending on rural development and infrastructure planning shows that this government means business. The record digitisation plan outlined is another major positive. The new digital literacy mission scheme will cover six crore additional households and bolster employability of rural youth. There is also the much-needed thrust on entrepreneurship training, higher education and skills development that will help make India a knowledge base. While the reduction in corporate tax is welcome, it is applicable only to select companies and is a minor negative. Measures to reduce tax hassles and address disputes, on the other hand, are a positive.
Tax exemption for Start-ups, amendments to Companies Act and allocation for Stand-up India scheme will further aid cost and ease of doing of business in India.
Nigel Eastwood, Group CEO, New Call Telecom
Overall, I would view this budget to have a positive push to industries across the board. This budget focuses clearly on growth, development and job creation with particular focus on start-ups by giving them support via exemptions for three out of five years. With government initiatives like National Digital Literacy Mission for Rural Households and Stand Up India Scheme in place, these will help boost the startup scenario for the SCs, STs women entrepreneurs as it will help reach out to these under-served sectors of the population by facilitating digital technologies for consumers and markets. This is a balanced growth-oriented budget with focus on accelerating on the fundamentals.
Ajit Patel, CEO & Founder, n-gage
The devil lies in the detail, but overall the Union Budget 2016-17 sounds exciting and promising for the IT and IT-related industries. Government’s ambitious announcement to achieve 100 per cent village electrification by 1st May, 2018 and a new Digital Literacy Mission Scheme for rural India to cover around six crore additional household within the next three years is commendable.
The allocation of Rs 1,804 crore for skill development and the proposed 1500 Multi Skill Training Institutes to be set-up, will definitely boost the employable population and generate more jobs for rural youths and in turn would help release the pressure in urban cities for want of employment.
Aakash Chaudhry, Director, Aakash Educational Services Pvt. Ltd
The push in the higher education, opportunities for skill development and focus on quality education is a welcome move. It turns the spotlight on both sides of the potential growth story – job creation as well as skill up-gradation.
The budget is promising as it supports 10 public and 10 private educational institutions to be made world-class which will further add to the opportunities for aspiring students to get exposure to right kind of faculty, infrastructure, jobs and market ready curriculum.
Beas Dev Ralhan, CEO, Next Education India Pvt Ltd
To realise the full potential of the demographic dividend that India is set to enjoy, and to prevent from that becoming a demographic liability, we need to find suitable avenues for employment and self-employment, through the focus on skill-development. We strongly believe that skill and aptitude identification and development has to start in schools itself. Teachers also have to be trained accordingly, something that is missed out in this year’s budget.
The total allocation of Rs 68,968 crores will play a significant role in inclusion of entire education sector from secondary schools to higher education and research centers. However, we could have had a more active engagement with the private sector which currently contributes well over 40 per cent of K-12 education in India.
Lastly, the concern on quality education and learning outcomes will increase the focus on infrastructure development. Since the government has promised to increase the number of IITs, AIIMS and other professional institutes, maintaining the quality will be yet another challenge. However, we believe the allocation in the Budget for higher education will go a long way towards resolving this problem.
P. Venkatesh, Director – Product Division, Maveric Systems
- Fiscal consolidation: emphasis on fiscal consolidation and sticking to the fiscal deficit of 3.5 per cent of GDP are welcome; this should therefore encourage the markets.
- Reform in taxation: the proposed reform in taxation to reduce litigation, certainty of tax and also an affirmation of no retrospective legislation should help foreign investment into India.
- FDI in food sector: the emphasis on the rural economy, food sector and also the coordinated move to provide FDI at 100 per cent into the food sector clearly shows the wholesome integration of the policies.
- Improving employment: continued investments in the social sector to improve employment through skill-building and greater emphasis on higher education reinforces a promising future
- Addressing the trade gap: simplification of procedures and extension of duty drawback benefits to an extended list of sectors in order to promote export growth should aid in closing the current trade gap.
Farrokh N. Cooper, Chairman & Managing Director, Cooper Corporation Pvt. Ltd
During the earlier BJP regime, there has been roll backs on many bold decision taken by then Finance Minister on political grounds. However, with Mr. Arun Jaitley presenting a positive budget, I am sure there will be no roll backs because it is the wish of the people and the need of the hour for India to move ahead and not roll back.
We acknowledge the concessions he has given for the export sector and simplification of tax administration and litigation. The Finance Minister has gone into great details in the agriculture sector when he has acknowledged the importance of honey in the economy and it is our wish that the sweetness and flavour of honey permeates throughout the economy.
Ashwani Rathore, CEO & Co-Founder, SpiderG
Capital gains, tax exemption on investments and lowering the period from three years to two years for definition of long term capital gains in unlisted companies will pave way for new angel investors to invest in startups. With this initiative there will be growing funding support for startups in coming years.
Entrepreneurship learning through (Massive Open Online Course) MOOCS will provide access to educational resources across the country. The one day registration process for start-ups will also help the ecosystem to grow. These positive moves will spark a new energy in the startup sector which is expected to raise USD700 million and will generate around 5000 jobs in the next 12 months.