The Union Budget 2020, presented by Finance Minister Nirmala Sitharaman is a mixed bag. This second budget of Narendra Modi led NDA government’s second term, was presented in a record 160-minute speech by the FM. While it has met some expectations, it has been a disappointment on other fronts. Here is what experts in Odisha have to say:
Srinivas Rao Ravuri, CIO – Equities, PGIM India Mutual Fund
The key positives are a) tax exemptions given to sovereign funds to invest in India b) extending concessional Corporate Tax of 15% to the power sector also c) removal of Dividend Distribution Tax.
The key disappointment is on slippage of fiscal deficit, though slippage was in line with expectations, the absence of concrete measures to accelerate spend on core sectors like infrastructure is a concern.
Kumaresh Ramakrishnan, CIO- Fixed Income, PGIM India Mutual Fund
The budget for FY 2021 should help increase consumption given the widening of tax slabs and lower tax rates up to Rs 15 lakh income. The nominal GDP growth estimates of 10% appears realistic as a cyclical rebound in GDP could be expected next year and from some ongoing reversal in inflation.
The budget focuses on infra and capex with the Government likely to continue doing most of the heavy lifting. Markets and corporates are expected to benefit from better liquidity as sovereign wealth funds could have higher participation as also local issuers raising capital overseas. We see the budget as a consolidation in a phase of strong headwinds both locally and globally.
Dr Bijaya Kumar Sahoo Advisor cum Working President OAVS
The FM has announced major relief for taxpayers. On the Personal Taxation front, it will get more complicated with benefit. With DDT removed, personal tax will be higher and the Government will have a tough time assimilating the resources. Where will the Government get the resources from? Rs 40,000 crore per annum will be revenue foregone from new income tax rates for individuals. It is alarming.
The structural improvements in agriculture, agricultural produce, logistics will yield a good dividend to farmers as well as economy A little more was expected to boost the manufacturing and the tourism sector. Overall, a promising budget to look forward to.
Mahender Pala, Chief Marketing Officer, Amri Hospitals Group
We welcome the Finance Minister Nirmala Sitharaman’s emphasis on healthcare as a key element. It is good to know that the need to expand healthcare delivery to the bottom of the pyramid ( beyond the metros and cities to Tier B and C towns) has been acknowledged.
It is imperative for the Government to ensure active participation from all private healthcare players. It is important that the Finance Minister lays emphasis on the following to encourage participation from the private healthcare establishments, including the big-chain of hospitals.
Rajnish Kumar, Chairman, SBI
The Union Budget 2020 is an attempt to endow India with improved health and better access to education while unleashing a better infrastructure through better connectivity. The announcement of the new income tax scheme without exemptions is to move forward to a regime of a simplified and clutter free direct taxation. Introduction of simpler GST filing system from April 2020 is a welcome step and it will add further depth to the current GST regime. Simplified GST return for MSMEs will facilitate ease of compliance. Similarly, relaxation in the SARFAESI norms for NBFCs will lead to better recovery and borrower discipline in this sector. Overall, the budget numbers are realistic nd the staggered transition to a lower fiscal deficit is in perfect consonance with the growth objective.
Anil Aggarwal, Chairman, Vedanta
It is a pragmatic and forward looking budget. The Government has chosen fiscal prudence over a massive spending programme. Now, it’s priority should be to efficiently finance and rapidly implement the National Infrastructure Pipeline worth Rs 102 lakh crore it has previously announced. This will provide the necessary boost to demand in the economy. I am glad that the FM has recognised the wealth of the private sector and has committed to transparency and a hassle-free tax regime. That the government has decided to divest a part of LIC is a bold step and should pave the way for aggressive divestment of various other public sector enterprises.
V. Narendran, CEO & MD, Tata Steel
The Union Budget recognises the aspirations of a growing India. The aggressive focus on the rural and agriculture sector is a welcome step. Removal of the Dividend Distribution Tax is a good move as this has been a long-standing demand from Corporate India. The new regime of personal income tax, relief for MSMEs, tax exemption for sovereign wealth funds, tax sops for start-ups, etc. will further improve the sentiment and aid the growth of the economy.
Puneet Dalmia, Managing Director, Dalmia Bharat Group
The FY21 Union Budget has focused on rejuvenating economic growth with multiple nuts and bolts measures. It is evident that the government has chosen to take focused steps and provide sector specific boost, keeping the compulsions of fiscal deficit in mind. At the same time, a lot now hinges on the government’s ambitious National Infrastructure Pipeline programme that aims to attract investments of over ₹100 lakh crore in the next five years. If the 6,500 identified projects are executed well, this one single programme has the potential to significantly alter the Indian landscape, create lakhs of jobs, provide robust business to ancillary industries like steel and cement, and prime the broad economy. It is now imperative that the government gets down to immediately rolling out the fine print of this gigantic infrastructure push so that projects can take off in right earnest.
Vipin Sondhi, MD & CEO, Ashok Leyland
The budget overall covers a wide spectrum of areas such as health, skill, infrastructure, agriculture – as a boost to the economy. The allocation of Rs. 2.83 lakh crore for Agriculture, Irrigation and Rural Development will assist the rural economy and will be good for the CV industry in the long run.
Further push to infrastructure of Rs.100 lakh crore over the next 5 years, including increased allocation of funds for roads and highways and the Proposal to develop five new smart cities in collaboration with states in PPP mode, will bring positive sentiments for the commercial vehicle sector by increasing demand.
Overall economic activity and job creation will increase demand for goods and consumption and Increase freight movement on trucks.
Nirmal Jain, Founder & chairman of IIFL
Expectations were very high and therefore market is a bit disappointed but there are a lot of incentives for the foreign investors. Dividend Distribution Tax (DDT) has been abolished and therefore obviously foreign investors will benefitbut then it becomes fully taxable in the hands of shareholders which is not the right way of doing it because shareholders are also owners and as owners of the company they pay tax on profits and it gets taxed again. So, this might change the dividend culture of many companies, it will impact the private sector investment which has been very sluggish for the last 2 to 3 years at least.
