The interim budget was an attempt to please all sections of the society. While many initiatives were announced in line with the Government’s 10-point dynamic vision to build India of future, execution will be the key. Also, the true picture will be clear only when the full budget is presented later this year.

 

The interim budget, announced by Piyush Goyal on February 1, 2019, can be termed as good with a mix of populist and pragmatic statement. It gave people from mostly all sectors something to cheer about.

 

"It is a directional budget with a clear intent of doing good to all the sections of the economy and the society, be it farmers, the industry and the common man. I am surprised to see how the Finance Minister has brought a slew of measures without ushering into an additional tax regime or caps. Indeed, he has presented ambitious programmes without widening the fiscal deficit," said Dr Niranjan Hiranandani, senior Vice President, ASSOCHAM.

 

He added, "It’s encouraging to note the Government's 10-point dynamic vision to build India of future. Initiatives to diffuse farmers' distress, labour reforms, boost to SMEs and MSMEs, push to  'Housing for All' by giving extension by another year under section 80 IBA, boost to the infrastructure sector and relaxations to individuals through tax reliefs will empower each element of the economy. Liquidity is an issue in the economy and in the real estate sector too. We expect the Government to address the concern to make all these reforms effective to ensure ease-of-doing the business and ease-of-living."

 

Sriram Ramakrishnan, MD & CEO, Consul Neowatt Power Solutions Pvt Ltd, lauded the government's annoucemnet to give impetus to Digital India and extending it to the villages in the country. "This will help in employment and revenue generation and let consumers have access to the world of Digital Infrastructure. We also appreciate that the government's commitment for setting up of International Solar Alliance, as it will help in promoting the use of renewable resources of energy and spread awareness across the country. A distress free healthcare and comprehensive wellness system is going to a big boost to the healthcare segment and will allow the organisations to come together and contribute to build a robust and a world-class healthcare infrastructure in India. The thrust that is given to promote various sectors which includes, Digital India, infrastructure sector and real estate sector will have a positive impact on increase in demand for uninterrupted power supply. We look forward to the implementation of the budget soon," he stated.

 

The government has laid a lot of emphases on the farm sector and has announced 2 percent interest subvention to promote animal husbandry and fisheries sector.

 

B K Goenka, President, ASSOCHAM explained, "India is an agrarian economy and has the largest number of people depending on it. The PM Kisan Samman Nidhi where Rs 6000 assured income benefit would be provided to all farmers with land holding of less than 2 hectares would encourage small farmers to continue in the field. An additional 3 percent interest subvention to farmers repay loans on time would also encourage timely repayment of bank loans."

 

According to Suramya Nevatia, CEO, Hind Rectifiers Ltd, this is a comprehensive budget with an emphasis on farmers, tax payers and infrastructure development. He added, “The allocation of Rs. 64,970 crores will boost the Indian Railways. Apart from that faster trains and other passenger-friendly amenities have been the focus areas. Vande Bharat Express an indigenous technology leap that will ensure speed, service and safety in rail travel. Being a ‘Make in India’ initiative Vande Bharat Express will help to create more jobs as more such train sets are manufactured for service across the Indian Railways network. Overall, it is an optimistic budget and will contribute to the all-inclusive growth of the economy.”

 

Growth oriented 

 

Nikunj Turakhia, President, Steel Users Federation of India, termed the budget as growth oriented and populist. He explained, “It has taken into consideration in grieved farmers, lower and middle class. This is the first time that any government has worked with such a broad vision. The speech of Finance Minister Piyush Goyal highlighted achievements of the present government and the journey it has set forth in the last four and a half years. The vision of this government, no doubt is superlative and it will be interesting to know how this will be implemented. The interim budget was rhetoric in nature and sounded as the manifesto to the upcoming election. The ten dimensions it has conceived are laudable.”

 

This budget has many positive provisions such as PM Kisan Samman Nidhi Yojana a project worth Rs 75 thousand crore that guarantees direct income support to poor farmers of upto Rs 6,000/year. Also, PM Shram Yogi Mandhan Yojana provides pension to unorganised sector workers after the retirement age of 60 years. The defence of the country is very important and the budget increased the allocation to three lakh crores. A relief to three crore middle class individuals is that tax rebate is increased to five lakh rupees. Also, no income tax will be levied on notional rent for people having second self-occupied home.

 

Turakhia said, “This Budget is definitely a welcome note for every citizen of the country. For the first time it feels that management of economy is solid and all macro-economic parameters are in order. With this the nation will gain further impetus and grow in the right direction by increasing expenditure and giving more buying power to middle class. However, the government should have proposed this budget last year or earlier. Yet, I hope it is still not too late and in order to continue India’s growth, we cannot afford to be complacent.”

 

Green energy

 

Emphasising on the importance of making India a pollution free nation, Finance Minister stated that a green and clean India is the third Dimension of the Government’s vision. He mentioned that India will drive on electric vehicles (EVs) with renewables becoming a major source of energy supply. Power experts like Black & Veatch have applauded the importance laid on renewable energy and energy storage devices through EVs. This vision will reduce import-dependence and ensure energy security for Indians.

"The government’s efforts to increase installed solar generation capacity is commendable, with the growth rate increasing 10 times in the last five years. The setting up of the International Solar Alliance is a great step to address the problem of climate change. We are happy to participate in the government’s endeavor to solve the problem of climate change," opined Rajiv Menon, Managing Director, Black & Veatch India.

 

He added, "We are happy to hear that the Government is in the process of implementing the various recommendations made by the Inter- Ministerial Committee towards reducing the import dependence on crude oil and natural gas. Urgent attention has to be directed towards transforming the system of bidding for exploration and changing from revenue sharing to the exploration programme for Category II and III basins. The steps taken by the Government are in positive light and will be important for the natural gas sector."

 

Sunil Rathi, Director, Waaree Energies, is elated at renewable energy being a key dimension in the Government’s vision for the coming decade, as proposed in the interim budget, with specific focus on electric vehicles and energy storage solutions. “With the focus on supporting domestic trade and services, and public sector undertakings now sourcing from local entities, we foresee an impetus towards growth for domestic manufacturers in the sector, while achieving economies of scale and supporting job creation,” he added.

 

Rathi said, “Moreover, we see solar energy being an integral support pillar to The Pradhan Mantri Saubhagya Yojna, which aims at making electricity accessible to all. We applaud the Government's 2030 vision of reduced dependencies on foreign entities for fossil fuel and believe that given a sustainable ecosystem for domestic solar manufacturers, solar energy will be a prime source of energy. This, in-turn, will reduce imports, thus strengthening the Rupee denomination and contributing to the nation's GDP.”

 

Furthermore, the proposed investment in the Railways and Roadways segment will enhance the scope for interstate commercial transportation, thus providing the solar industry with an opportunity to solarise commercial vehicles and other modes of public transport like buses and trains. “With technological evolution leading the sustainable efforts of the country, we are confident that, if implemented, the proposed vision will help attain energy security and generate employment,” said Rathi.

 

According to Rahul Walawalkar, President, India Energy Storage Alliance (IESA), In line with the vision to make India pollution free, the Government of India has once again shown its commitment to encourage and implement electric vehicles and clean fuel energy. 

 

“Announcements of tax rebates on the import of EV technology, including batteries and motors ranging from 10 to 25 percent, and incentives for local battery manufacturing will speed up the EV revolution.  We are happy to see the continuing support of the GoI in realising India’s EV dream. We urge the Government to take swift action in launching the National Energy Storage Mission in order to support the development of an R&D and manufacturing ecosystem for energy storage and EVs,” he said.

 

Thrust on modern technology

 

The Government has continued to focus on its flagship programs, Digital India and Make in India, as key drivers to the nation’s economic growth, with a greater focus on digitisation in the rural economy. "In line with this agenda, the announcements to set up a national centre for Artificial Intelligence (AI) and development of an AI portal through identification of nine priority areas in the segment will be critical to promote the adoption of these emerging technologies in the country and to position India as a front runner in this space across the globe," opined Vartul Jain, VP – Finance, GreyOrange.   

 

The extension of the GeM platform, with a focus on supporting domestic trade and services, retail trading and welfare of traders augur well for the development of these sectors. Jain added, "The continued impetus to boost MSMEs and empower traders will contribute towards the growth of small businesses, fostering innovation and employment. On the whole, we believe the Government’s thrust on technology along with the emphasis on internal trade in this year’s budget is defining steps, the results of which will be crucial in realising the vision of the $10-trillion economy in the long run.”

 

The thrust on the manufacturing sector will go a long way in boosting the growth as well as the employment creation by the sector. Munira Loliwala, Business Head – Engineering, Manufacturing and Process Pharma, TeamLease Services Limited, said, “Incorporation of renewable energy as a critical element of the growth agenda is a great move. It will encourage corporates to stay invested in the industry.  Further, the focus on technology driven development is also good. However, one area that needs intervention is up-skilling of the talent. Technologies are fast changing and hence ear marking more funds as well as increasing the incentives given to employees who take up up-skilling programmes will encourage talent to continue to learn and thereby stay relevant.”

 

According to Samir Lambay, Co-Founder & CEO, FreightCrate Technologies, the initiative to allow duty free inputs of capital goods for manufacturing sector and simplified customs approvals will increase the global price competitiveness of our manufacturing companies and consequently boost exports. Moreover, the improvement in RFID technologies if implemented properly will reduce indirect logistics costs which as per industry bodies have been historically as much as 38% of logistics costs for Indian companies, he added.

 

As announced in the interim budget, India has emerged as the fastest highway developer in the entire world, by building 27 km of highway each day. This has served as a huge boost to the logistics sector, especially the express delivery segment. Chander Agarwal, MD, TCIEXPRESS, informed, “We further expect the government to continue with the aspirational work of developing India’s infrastructure. In addition, we believe that the export logistics will also improve, as the government has abolished customs duties on 36 capital goods, while also introducing full and comprehensive digitalisation of export and import transactions and leveraging RFID technology.”

 

Boost to consumption economy

 

Offering a plethora of positive announcements the Interim Budget 2019 has undoubtedly turned out to be a morale booster for all the stakeholders of the industry. Now both the consumers as well as the industry experts are looking forward to the positive effects of the budget provisions percolating down to the grassroots level.

 

While the middle class income group, which is the most influential and largest consumer segment, is happy with the huge tax planning incentive provided to them in this budget, the industry captains on the other hand are upbeat about benefiting from enhanced disposable income of households.

 

Anil Gupta, Managing Director, Okaya Power Group, said, “With its provisions of incentivising the potential consumers, the interim Budget 2019 looks quite encouraging for the industry. We expect now there will be an immediate revival of demand in the market and the footfall of the consumers is here to increase significantly. With a growth-oriented budget this, the Indian manufacturing sector is here to realise commendable growth ahead. With the tax benefits passed on to the middle class which constitutes the biggest chunk of consumer for majority of the products, will provide impetus to the market buoyancy.”