Budget 2020 Highlights: Budget to unlock potential of health, education and infra sectors, says SBI Chairman

Vetri Subramaniam, Group President and Head-Equity, UTI AMC:

The slowdown in India has been evident since the end of 2018. The government has taken several measures to address this slowdown in recent months. Monetary policy has also turned accommodative and over time we expect growth to respond. For India growth is as much an element of macro-economic stability as is the fiscal deficit, current account deficit or inflation. In this context the budget as a policy tool provided an opportunity to deliver a counter cyclical fiscal impulse. This strategy is not without risk given the size of the government’s borrowing program and our historically weak track record of fiscal consolidation. The government has made the decision in today’s budget to stay on the path of fiscal consolidation. This choice, while prudent, raises downside risks to growth. On the positive side the government’s fiscal resolve creates headroom for the monetary authorities to remain supportive of growth.

Altaf Jiwani, CFO, Welspun India Ltd:

The FM enumerated 16 initiatives to double income of the farmers which should have an impact on agri output. Ofcourse a few of these initiatives falls under states’ purview but these are a good starting point. Over a few years, we could see increase in the output of agri products including cotton which will help India retain its position as the world’s largest cotton producer. The initiatives on organic farming, allocation for national technical textile mission and skill India are a few other initiatives which should help the textile industry. The interdependence between agriculture and textile industry will see rub off effect on each other. Reduction in tax rates on income upto Rs15 lakhs should induce consumption particularly by millennials.

Umesh Revankar, MD and CEO, Shriram Transport Finance:

The budget presented by Ms. Nirmala Sitharaman is a pro-consumption budget. It strikes a balancing act between the urban and rural requirements. Government’s thrust on creating better infrastructure, building strategic highways like Chennai – Bangalore, Delhi - Mumbai will boost the sector and further create more demand and employment. Creating National logistics policy will be beneficial as it will bring in efficiency and reduce the turnaround time of the vehicle. Under the SARFAESI Act, the debt recovery has reduced from Rs.1 crore to Rs.50 lakh is one step ahead. We would still expect it to be on par with banks which currently stand at Rs.1 lakh. All in all, through this budget, the government is trying to simplify the existing complicated processes like GST, Income tax filing and bring in efficiency and growth.

Gautam Hari Singhania, Chairman and Managing Director, Raymond Ltd:

In this budget, Government has provided stimulus to the economy in form of liquidity and consumption related interventions in the backdrop of visibly slowing global economic growth, including India.

It is very encouraging to note that the budget clearly laid out the government’s roadmap to position the economy for future sustainable growth—which will resonate well with both domestic and international stakeholders.

We welcome setting up of the National Technical Textiles Mission with an estimated outlay of Rs 1480 crore.While the overall outlay and incentives for Textile and Garmenting sector, which is one of the highest formal employment generation industry, could have been significantly more - it is a well balanced budget addressing many challenges and opportunities across sectors to give fillip to economic revival.

Navneet Munot, ED and CIO, SBI Mutual Fund: 

Overall, the government appears to have chosen to consolidate on the reforms of the past few years. The budget continued with the thrust on infrastructure, social welfare, improvement in ease of living, simplification on taxes and leveraging technology for better governance. Full tax exemption to Sovereign Wealth Funds for investments in Infrastructure and other notified sectors is a significant positive. It was also heartening to see the focus on sustainability through measures on environment and climate change. Similarly, the continued focus on cooperative federalism is positive.

After the initial reaction, expect investor focus to shift back on earnings and global cues. In our view, significant easing in financial conditions, both locally and globally, improving prospects for the rural economy given increase in food prices and better acreage, and the various measures taken by the government to stimulate the economy so far should bring about an improvement in both economic activity and corporate earnings going forward. However, in the absence of a significant growth boost in the budget and given the cautious global environment owing to the spread of Coronavirus, market should stay volatile in the near-term.

Pawan Goenka, MD at M&M:

While we don't see any fiscal room for GST cuts in the auto sector, we hope that the price increase of that will happen with GST on BSVI If somehow would be neutralised, that would be beneficial to the industry.This whole business of being part of the global supply chain will have a huge impact to India. On electronics, I hope that the 12 percent tax on the import of electronic goods would also seek more initiatives to boost the manufacture of electronic good in India.

George Alexander Muthoot, MD, Muthoot Finance:

Budget 2020 plays the balancing act very well. The enhancement of partial credit guarantee scheme for NBFCs is very encouraging for the sector as it addresses the liquidity issues.

The thrust to create huge employment opportunities can be seen in the budget. Increased focus on MSME sector through favorable policies, allocation of Rs30,757 crore for J&K and Rs5,958 crore for Ladakh will benefit small businesses. The extended tax benefit for affordable housing will benefit the lower and middle income groups in the country thereby providing much needed booster for affordable housing projects.

Satish Reddy, Chairman, Dr. Reddy’s Laboratories Ltd and President, Indian Pharmaceutical Alliance:

The industry had high expectations of this budget as it was seen to be an opportunity to announce big, bold reforms given the state of the economy. On that count, there is a degree of disappointment in some quarters as expectations have not been met. However, I am happy to see that healthcare continues to be an integral part of the Government’s key priorities. The announcement on the expansion of the Ayushman Bharat program by setting up additional hospitals in tier 2 and 3 cities is a welcome move. Other measures in improving the healthcare infrastructure and capacity building in the sector are also commendable.

I would however have liked to see a significant financial incentive to boost exports and improve the competitiveness of the Pharma sector. I hope this will take shape with a new export incentive scheme. The overall thrust on ease of doing business, regulatory simplicity and policy stability should help the pharma industry scale new heights.

Nilesh Shah, MD and CEO, Kotak Mahindra Asset Management Company:

The budget is good on intent. However, the key is efficient execution in a time-bound manner. There are many positives to simplify things and encourage entrepreneurs but again, key will be execution in a time-bound manner. Intent needs to be converted into implementation.

Zarin Daruwala, CEO, India, Standard Chartered Bank:

The Budget finely balances the objective of supporting growth while adhering to fiscal prudence in the medium term. The personal income tax cuts for the middle class would help address the urgency to revive consumer demand. The focus on physical infrastructure along with social sector (health, education, rural, water) would boost the medium-term growth potential. In my view, the Budget rightly attempts to boost spending by enhancing non-tax revenues via higher disinvestments including stake sale in LIC and IDBI Bank. Other announcements like enhancement in deposit insurance coverage, further liberalisation of the foreign investment regime, abolition of Dividend Distribution tax, are steps in the right direction.

Rajnish Kumar, Chairman, State Bank of India:

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. The rural sector is the beneficiary of a larger outlay. The new export credit scheme, is aimed at improving the credit flow for exporting units, mainly the MSME ones, as it will substantially reduce the collateral requirement as well as the overall interest burden of the ECGC regime. The increase in deposit insurance limit from existing Rs 1 lakh to Rs 5 lakh was necessary. 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 and the staggered transition to a lower fiscal deficit is in perfect consonance with the growth objective.

Abheek Barua, Chief Economist, HDFC Bank:

The Budget provides credible numbers in terms of the fiscal math, recognising the revenue shortfall faced this year. It uses up the 50 bps point leeway that the FRBM act provides for both this and the next year which is a welcome step.

Those who are disappointed with the absence of more overtures to the financial sector either in the form of more recapitalization resources for stressed public sector banks or a fiscal commitment to buy out the pile of toxic assets that continue to impede fund flow might draw some comfort from a measure that government will offer support by guaranteeing securities floated. While need to await the fine-print on how this will work and how quickly this will be implemented, this move might be helping in easing the logjam in the financial to some degree. Government guarantees could help cash-strapped NBFC borrow at lower rates. It could also enable the central bank to offer cash in exchange for these securities if it were to plump for some out of the box measures to attenuate risk aversion in the markets.

On a different note, the tax breaks offered to foreign investors and specifically those like sovereign wealth funds who are willing to place a long term bet on the economy acknowledge the fact that there is a fundamental mismatch between the supply of domestic savings and capital needs for accelerated growth. This along with the abolishment of DDT is likely to help attract foreign fund flows. For the bond market, the borrowing numbers seem to be broadly in line with market expectations and are unlikely to put significant pressure on yields in the short-term.

Harshil Mathur, CEO and Co-founder, Razorpay:

The budget does meet some of the expectations from the FinTech industry and startups. The introduction of some sort of a tax relief on ESOPs was one of the biggest asks from the startup industry - this deferment of tax payment by five years, to me, is one of the biggest welcome moves by the government in this budget. This is a good start and I hope we see more focus on this going forward. Secondly, the reduction on corporate tax to 22 percent is an encouraging step. This is the lowest in the world and will be encouraging for Indian businesses. Lastly, the changed income tax slabs and rates is not only a huge income tax relief for individuals but will also lead to an increase in disposable income, thereby giving a boost to consumer spending.

Budget 2020 saw the Housing and Urban Affairs Ministry outlay touch Rs 50,039.90crore, a nearly 18.39 percent increase from the revised estimate of Rs 42,266.72 crorefor 2019-2020. In 2020, the outlay forthe flagship scheme of the government – the Pradhan Mantri Awas Yojana– has been granted Rs 27,500 crore as against the revised estimates of Rs 25,328 crore in 2019-2020, nearlyan 8.5 percent increase.
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Automobile dealers body FADA on February 1 said the government's focus on agriculture, irrigation and rural development in the Union Budget will have a rub-off effect on rural demand in the next 3-4 months if all the measures are implemented immediately.It will also give a fillip to rural auto demand, especially two-wheelers, tractors and small commercial vehicles, Federation of Automobile Dealers Association (FADA) President Ashish Harsharaj Kale said in a statement.
Though it is an inclusive budget, it lacks immediate demand boosters, he said, adding, it is "disappointing" that as part of auto ecosystem, no direct benefits for the automobile industry have been announced in the FY2021 budget. "On the other hand, liquidity support for NBFCs will act as a confidence booster for them to lend, helping the auto sector," he added.A budget allocation for an attractive incentive-based scrappage policy would have been a demand booster for commercial vehicles and also a positive for a cleaner environment and road safety, he said. (PTI)

The government on February 1proposed a price stabilization fund (PSF) to control prices of food items like onion and tomato -- kitchen staples that pushed retail inflation to a five-year high in December."Government has taken various measures from time to time to stabilize prices of essential food items..Government is also implementing PSF to help moderate volatility in prices of agri-horticultural commodities like pulses, onion, and potato," said the Union Budget 2020-21 presented by Finance Minister Nirmala Sitharaman in Parliament. Onion prices started to flare up from August 2019 onwards peaking to about Rs 150-200 a kg due to unseasonal rains which disrupted supplies from key producing regions such as Maharahstra and Karnataka. Prices of tomato too hovered in the range of Rs 60-80 a kg while potato sold for Rs 30 per kg towards the end of 2019. (PTI)

Jayant Sinha: 

Whether it is the upper-middle class, the people from the agriculture sector and women, the Budget was comprehensive.

Aiming to boost the affordable housing demand, Finance Minister Nirmala Sitharaman on February 1proposed to extend the date of availing an additional Rs 1.5 lakh tax deduction on home loan interest by one more year till March 2021. The additional deduction of Rs 1.5 lakh over and above Rs 2 lakh was introduced in the last year's budget. This was allowed for those buying homes for the first time and of up to Rs 45 lakh and made applicable for home loans sanctioned till March this year. The finance minister also announced that builders will get tax holiday on affordable housing projects approved till March 2021. (PTI)

Agriculture Minister Narendra Singh Tomar on February 1hailed the Budget 2020 saying adequate fund to the tune of Rs 1.60 lakh crore has been allocated for agriculture and its allied sector including irrigation for the next fiscal.A 16-point action plan has been chalked out for realising the target of doubling farmers' income by 2022, he said, adding that several schemes like PM-Kisan are being implemented are benefitting the farming community. "The government's focus has been 'Gaon, gareeb and kisan' and the focus in the Budget on providing better facilities to this section reinforces the government's commitment of 'Sabka Sath, Sabka Vikas," Tomar said in a statement. (PTI)

CBDT Chairman:

NRI tax should be seen in context of citizens of this country. In an interview with CNBC-TV18, phasing out exemptions and deductions should be seen along with other policies. People who are just starting their careers will find it more attractive.

Former Economic Affairs Secretary Subhash Chandra Garg:

There was a much higher revenue budgeted from the AGR dues, which could be up to Rs 90,000 crore. Analyzing the Budget on CNBC-TV18, he also noted that there was a big thrust in the budget on filling the budgetary gap through revenue mobilization.

Budget 2020:

Former Economic Affairs Secretary Subhash Chandra Garg said that overall, the Budget left the economy where it currently stand. In an interview with CNBC-TV18, Garg also said that the expectation of stimulus for growth was unreasonable. He also noted that there is a realism in the assessment of the tax receipts.

Budget 2020:

The Union Budget presented on February 1estimated that more than 2.62 lakh jobs are likely to be created between March 2019 and March 2021 in various organisations. The strength of government establishments was 32,62,908 as on March 1, 2019, which will increase to 35,25,388 by the same date in 2021, an increase of 2,62,480. As many as 22,046 new jobs are likely to be created in the Defence Ministry (civil). Its strength was 70,978 in March 2019 and it will increase to 93,024 by the same month in 2021. The workforce of Home Ministry (excluding cabinet, police forces, union territories) is likely to be increased by 8,200 to take its strength to 26,564 by March 2021. As many as 3,886 jobs are estimated to be created in the Culture Ministry, 3,903 in Department of Space, 3,243 in the Department of Revenue, 2,581 in Ministry of Earth Sciences, 2,167 in External Affairs Ministry, 2,136 in Ministry of Environment, Forests and Climate Change and 1,347 in the Ministry of Electronics and Information Technology by that time. (PTI)

FM Sitharaman: 

Indian manufacturers and small traders are getting hurt by the deep discounts offered the e-commerce companies.

FM Sitharaman: 

Air India, SCI, CONCOR and other divestments should happen this year. Will look to carry out divestments worth Rs 2.10 lakh crore next year.

FM Sitharaman:

CAA protests will not impact the foreign investment. It will not hurt India's image. Implementing the act was the mandate we recieved from the people, and we have implemented it.

FM Sitharaman:

We are hopeful to see large tax collection by end of FY20.

FM Sitharaman: 

People are fed up of litigation. But what we are providing is not amnesty, but are willing to forgo the interest and penalties over tax litigations.

FM Sitharaman:

Some exemptions will continue even for the new tax slabs. The aim for the current reforms is to make sure that the money reaches to the hands of the taxpayer and he is free to use it as he sees fit.

FM Sitharaman:

Speaking on the market's reaction to the Budget, Sitharaman said the stock market was not in full force. "I am very confident that the market will understand all that has been announced in this Budget, especially over the deepening of the Bond market," said Sitharaman.

FM Sitharaman:

Nearly Rs 3 lakh crore has been allocated for agriculture and rural initiatives.

FM Sitharaman: 

The negativity that was expressed since the July Budget have all gone away, atleast I haven't heard of it.

FM Sitharaman:

The Prime Minister set a target for Rs 100 lakh crore investment in infrastructure. We did not wait for these projects to come, but put money to create these projects.

FM Sitharaman:

It was the desire of the government to address every section that was expecting something. Our expectation was to put boost consumption, and increase money for investment. We had no desire to reduce the investment, in an interview with Network 18 MD and Group Editor-in-Chief Rahul Joshi Rahul Joshi.

Budget 2020: 

Finance Secretary Rajeev Kumar said that everything is on course as far as the merger announcements of the PSBs are concerned. Speaking to CNBC-TV18, with regard to no bank recapitalization being allotted to Public Sector Banks (PSBs), Kumar said that banks must stand up on their feet and that they are doing so. Kumar also said that the Capital Ratios of banks are already high, and recoveries are at an all-time high.

Budget 2020:

Commerce Secretary Piyush Goyal said that the time period of claiming income tax benefits has been extended. Speaking to CNBC-TV18, Goyal said that in the emerging new age world, startups will be a focus area for the government. Goyal also said that startup ESOPs will be charged at point of sale.

Budget 2020:

Revenue Secretary Ajay Bhushan Pandey said that the tax rates under GST are far lower today than they were in the pre-GST situation. In an interview with CNBC-TV18, Pandey said that the average rate reduction under GST was 10 percent.

Budget 2020: 

Revenue Secretary Ajay Bhushan Pandey said that optional tax regime provides a level playing field to taxpayers. In an interview with CNBC-TV18, Pandey said the increase in expenditure for next year is pretty significant and that a large cross-section of people will benefit from the new tax regime. He estimated that very few people would taking large deductions.

Pradeep Udhas, Office Managing Partner, KPMG in India

This year the focus is on enhancing agricultural/rural income, education/skilling, wellness, water/sanitation. There are a number of schemes announced or enhanced such as Sagar Mitra, Kisan Rail, Krishi Udaan, Solar pumps, agri-credit and Jal Jivan Yojana. Job-creation is also in focus with internships in Urban Local Bodies, investment clearance cell for start-ups and National Textile Mission for smart textiles. There has also been a focus on exports and new economy. Significant changes in the tax regime were de-criminalization of civil offences (Tax Payer Charter), and substantial reduction personal income tax in addition to the reduction in Corporate Tax announced earlier. Abolition of Dividend Distribution Tax is a significant step. "Disinvestment in certain public sector undertakings is noticeable". says.

Budget 2020: 

The Ayushman Bharat scheme has given a new expansion to the country’s health sector. Under blue economy, the youth will get new chances in the field of fishery, saysPM Modi.

Budget 2020:

An integrated approach to agriculture was adopted in the Budget. To get a fair price for their produce, and to ensure its timely delivery, the Kisan Rail initiative has been launched, says PM Modi.

Budget 2020:

I congratulate Finance Minister Nirmala Sitharaman and all the citizens for a successful Budget,says PM Modi.

Budget 2020:

Now in the system of Income Tax, wehave gone from dispute to trust, and the taxpayers' rights will be clarified by the Taxpayer Charter,says PM Modi.

Budget 2020:

These decisions are geared towards minimum governance and maximum governance,says PM Modi.

Budget 2020:

To improve the trust of the citizens it has on banks, the insurance on bank deposits has been raised to Rs 5 lakh,says PM Modi.

Budget 2020:

New reforms announced in the Budget will financially empower every citizen,says PM Modi.

Budget 2020:

Investment is needed to generate employment. The abolishment of Dividend Distribution Tax DDT will help in investment to the tune of Rs 25,000 crore, says PM Modi.

Budget 2020:

The Budget has also taken up measures for the country to become a export hub and support the MSMEs, says PM Modi.