“The Budget has laid out a clear and tangible roadmap for the future. The decision to incentivise credit and debit card transactions coupled with the proposed new law on black money will bring down the social cost of unaccounted money, apart from adding to the bank bottom-line.
The move to frame a Public Contract Bill will kick start activities in the construction sector plagued by disputes. The move to bring NBFCs at par with financial institutions will help banks to clean up their balance sheets by selling stressed assets at an early stage to ARCs.
This apart, framing of Bankruptcy Law, sprucing up public investment to channelise private investment and monetisation of gold assets are positive steps.”
-- Arundhati Bhattacharya, Chairman, State Bank of India
The Finance Minister has unveiled a budget that fills in the colour within the outlines of the priorities articulated by the government over the past nine months.
A more focussed articulation of the plans with regard to urban housing and infrastructure would have been welcome. The 'smart city' initiative announced in the last budget could have been followed up with specifics.
The extension of SARFESI to NBFCs will place them on par with banks, in line with the RBI's recent regulatory efforts in that direction. The same logic suggests that SARFAESI should have been extended to Housing Finance Companies.
-- Anil Kothuri, President, Edelweiss Housing Finance Limited
"We compliment the Finance Minister for announcing the pro-India budget that would strengthen the social fabric, improve governance and tax rationalisation. Overall a positive budget for both corporates and individuals."
-- Vikram S Kirloskar, VC, Toyota Kirloskar Motor Pvt. Ltd and President of SIAM
In order to reboot the Indian growth engine, the Union Budget announced today puts huge focus on infrastructure with an additional investment of Rs 70,000 crore compared to last year. Also, the establishment of the National Investment and Infrastructure Fund with an annual inflow of Rs 20,000 crore will surely support infra growth.
A pleasant surprise is the reduction of corporate tax from 30% to 25% over next 4 years.
The dispute resolution mechanism and streamlining of the approval process will boost private sector investment. Similarly, deferment of GAAR, composite cap for foreign investment, channelisation of savings by increasing the limit in Pension schemes and creating a Sovereign gold fund will lead to higher capital flow to the capital market.
While the budget provides a holistic platform for stimulating economic growth and enhancing corporate earnings in the next couple of years, it also takes steps for inclusive growth by introducing a social safety net for everyone. Steps taken in the first Budget by the new Government are expected to act as a catalyst for double digit GDP growth in the next 2-3 years which augurs well for both equity and debt market over medium to long term.
-- Nirakar Pradhan, Chief Investment Officer, Future Generali Life Insurance
“The FM has cleared the cluttered, and at times convoluted, tax regime and has ushered in a more cogent and predictable tax environment. Good infrastructure is the foundation of meaningful and sustainable GDP growth. The thrust on infrastructure in the budget is a welcome step in this direction and signals the government’s intent and understanding of the importance of this key sector.
The finance minister underlined inflation management as another area of priority for the government. Not only will this aid robust economic growth, a low to moderate inflation environment will also ease populist pressures on the government. Availability of low cost capital is a key enabler for the real estate sector.
The sector has a high multiplier effect on the economy and affordable housing is key to realizing the social dream of Housing for all. The tax overhaul to permit the listing of REIT will provide a much needed source of capital to a sector that is hungry for efficient funding.”
-- Gagan Banga VC & MD, Indiabulls Housing Finance Limited
The government seems determined to ensure we build much stronger social security systems for ourselves evidenced by the increased focus on retirement planning. By incentivizing an additional Rs. 1 lakh per annum towards retirement investments he’s probably going to facilitate the twin objectives of channelizing people’s savings into funds available for long term projects and giving the NPS, a shot in the arm.
For the taxpayer, the benefit is clear - assuming a 7 per cent per year net return on the Rs. 1 lakh per annum savings, the FM is helping today's 40 year olds build an additional corpus of Rs. 40 lakhs when they turn 60!
Healthcare treatment costs have been inflating at double digits over the last several years. Most people’s health insurance has not kept pace with this. Including health insurance in the building up of our social security recognizes that health cover provided by the government or by employers might not be enough.
Personal health insurance is increasingly, becoming a real need. The increased Rs 10,000 tax rebate for health insurance effectively means that a family of 4, for example with it's eldest member, at 45 years of age, can increase it's total family health insurance from Rs. 10 lakhs to Rs. 20 lakhs for as little as Rs 7,000 net, more per year. This is timely and a very welcome change.
The emphasis on reducing the over dependence on the cash economy and going after black money should hopefully see some trickle down benefits in real estate which is arguably, the largest 'absorber' of black money in the country. Perhaps, it will become reasonable to expect prices to soften if this key component of real estate demand goes down.
-- Manish Shah, co-founder & CEO, BigDecisions.com